I am in escrow on a home that I planned to buy with another person. I planned to pay 3/4 of the price in cash and he got a loan for 1/4 the price of the home. Since entering escrow we no longer are a couple and don’t want to buy the house. Can we still cancel the purchase?

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    Isn't the whole point of escrow that you can't back out without forfeiting the escrow money? Also, did you both sign up to purchase the house together? Nov 18 at 4:10

2 Answers 2


Since in the other question you mentioned the IRS, I'm assuming you're in the US.

In the US home purchase usually includes earnest deposit which is forfeited if the purchaser doesn't perform. You need to read the purchase agreement you signed that details how much is forfeited and how much you can recover.

Since in the other question you mentioned a divorce - you also need to talk to your attorney about who's responsible for non-performance and how to split the forfeited amounts.

You should also explain the situation to the seller, nany times they'll be able to relist and sell at a comparable price. If they sustain no damage you can ask for your deposit back.


You have multiple issues.

  • The two of you have signed documents and have put money down as a good faith deposit.
  • The two of you, if you were using a real estate agent, have signed documents regarding their services.
  • The two of you have signed documents relating to the transaction. These could be for a home inspection, title search, credit check, loan application...

Each of these documents should specify your financial obligations if the deal never completes. In some cases like the home inspection, they will still want their money and they don't care if the deal collapses. Some of them may have already been paid, in other cases they were waiting for settlement day.

The two complex ones are your agent and the home seller. Their contract could discuss damages beyond the deposit you made at the start of the transaction. Because you are buying the courts probably won't force you to complete the transaction, though I am not a lawyer.

Even though you feel that the deal should be cancelled you shouldn't count on the sellers saying here is your money back. This could delay their transaction by months. This could mean that they can't buy their dream house house which will cost them their deposit, or they have to get a bridge loan to afford both properties, or they have to turn the empty house into a rental.

Determining how to split the expenses is another discussion you need to have with your former partner.

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