What to know about backing out of a home purchase contract

If you’re a prospective homebuyer who is having second thoughts, you’re not alone.

About 15% of all home contracts fell through in June, marking the highest share of cancellations since March 2020 — the start of the pandemic — when it was 17.6%, according to real estate brokerage Redfin. A year ago, the share was 11.2%.

Yet before you join the ranks of buyers who walk away from a deal in progress, it’s important to consider if it will cost you to do so. Or, if you have yet to sign an initial contract but are nearing that point, it’s worth knowing whether you can cancel at some point in a way that wouldn’t result in forfeiting your deposit.