Usually not without cost. Ontario has no cooling-off period on a resale home — once your offer is accepted, the agreement of purchase and sale is a binding contract. Your legitimate way out is a condition written into the agreement, and only while that condition period is still open. Once the conditions are waived or satisfied, the deal is firm, and walking away is a breach. The deposit is the floor of what you can lose, not the ceiling.
There is no cooling-off period — with one exception
People expect a few days to change their mind, the way you can with some consumer contracts. Ontario real estate does not work that way.
The one real exception is a new pre-construction condominium bought from the builder. That comes with a statutory ten-day rescission period, during which you can cancel and get your deposit back.
That right does not extend to resale condos, and it does not extend to new freehold homes. If you bought a resale house, there is no cooling-off period at all.
Conditions are the exit, and they expire
Most offers include conditions — financing, home inspection, sale of your existing home, review of the status certificate on a condo.
A condition is your escape hatch. If it is not satisfied within the time stated, you can walk away and get your deposit back. That is the entire purpose of it.
Two things matter enormously here:
- The deadline is exact. A financing condition expiring at 6:00 p.m. on Friday expires at 6:00 p.m. on Friday. There is no grace period.
- You have to do it in writing, in the way the agreement requires. Telling your agent you have changed your mind is not notice. A signed notice delivered as the agreement specifies is.
In a competitive market many buyers submit firm offers with no conditions at all. If that is what you signed, you never had an exit.
What waiving a condition actually does
When you waive a condition, you are giving up your right to rely on it — permanently. You cannot un-waive it later because your financing fell through afterwards.
This is why waiving a financing condition on a verbal “you’re approved” from a broker is genuinely dangerous. Pre-approval is not approval. The lender’s real decision comes after they appraise the property, and if the appraisal comes in below the purchase price, the shortfall is yours to cover.
What happens if you walk anyway
The seller can terminate the agreement, keep the deposit, and sue you for what the failed deal cost them.
Those costs typically include:
- The difference between your purchase price and what the property eventually sells for
- Carrying costs while it sits — mortgage interest, property tax, utilities, insurance
- A second round of real estate commission
- Their legal costs
The deposit is not a cap
This is the most common and most expensive misunderstanding. Buyers assume that walking away costs them the deposit and nothing more.
It does not. The deposit is credited against the seller’s losses — it is not a fee for cancelling. If the property later sells for eighty thousand dollars less than you agreed to pay, the deposit comes off that figure and you can be pursued for the rest.
Ontario saw a large number of these claims after prices fell, and buyers who assumed the matter was closed when they forfeited the deposit found out otherwise. A seller generally has two years to start a claim.
The seller has to try to resell
There is a limit on this. The seller has a duty to mitigate — they must make reasonable efforts to resell the property rather than leave it empty and run up a bill.
If they turned down a reasonable offer, priced it badly, or sat on it, that is relevant to what they can actually recover. It is one of the main defences in these cases and it is a reason not to assume the number you are being quoted is the number you owe.
You also cannot just take the deposit back
Deposits are held in the listing brokerage’s trust account. The brokerage cannot release it to either side on request.
It comes out either by a mutual release signed by both buyer and seller, or by a court order. This means a deposit can sit frozen for a long time while the parties argue — another reason a negotiated exit usually beats a unilateral one.
Better options than simply not closing
If you genuinely cannot complete, there is almost always something better than going silent:
- Negotiate a mutual release. Sellers often prefer a certain, immediate resolution over a lawsuit. Sometimes that costs you part of the deposit rather than all of it plus damages.
- Ask to extend the closing while you sort out financing. Most sellers want to close.
- Look at other financing — a B lender or private lender at a higher rate for a short term can be far cheaper than the damages from a failed closing.
- Assign the agreement, if the agreement permits it, so someone else completes the purchase.
If the problem is that closing day has arrived and the money is not there, that is a slightly different situation — we cover it in what happens if your closing is delayed in Ontario.
If the seller is the one backing out
Your position mirrors theirs. You can recover your deposit and sue for your losses — the extra you had to pay for a comparable property, your accommodation and storage, your costs.
In some cases a buyer can ask the court to order the seller to complete the sale rather than pay damages, though that is not automatic and it is not available in every case.
When you need a lawyer
Every purchase and sale in Ontario needs a lawyer to complete, so you will have one. The question is when you involve them.
Involve them before you waive a condition, not after. That is the moment your options close, and a five-minute conversation beforehand is worth more than months of argument afterwards.
Involve them immediately if you are thinking about not closing, if the other side has told you they will not close, or if a demand letter has arrived. What you say and put in writing in the first few days affects what happens later.
If you are buying or selling in Brampton or across the GTA and something has changed, our real estate team can tell you where you stand. You’ll receive a response the same business day.