Can a Buyer Back Out After the Final Walkthrough?

Selling a house can be a sprint or a marathon, but no matter how the experience plays out, it all comes down to the final walkthrough. The final walkthrough gives buyers one last chance to inspect a home before completing the purchase. It’s not an official inspection—it’s an opportunity to confirm the house is in good condition, ensure that the previous homeowners made agreed-upon repairs, and verify there are no new issues since the last viewing.

In most cases, only the buyer and buyer’s agent attend the final walkthrough, so the buyer can inspect the property at their leisure and get a sense of what it will be like to live in the home. When the final walkthrough occurs depends on your real estate purchase and sale contract and is the last major hurdle to clear in a real estate sale. 

Walkthroughs usually go off without a hitch. According to the National Association of Realtors, only 5% of contracts are terminated after the final walkthrough.

Termination after the walkthrough is not common, but it happens, and it causes headaches for both the seller and buyer. While a buyer can back out of a sale, that doesn’t necessarily kill the deal altogether. Backing out of a sale may have legal and financial consequences for the buyer, while the seller could have difficulty finding another buyer, especially if the home has been on the market for a long time.

In this guide, we’ll explore the typical reasons why buyers back out after a final walkthrough, your potential recourse as a seller, and what you can do to ensure a successful final walkthrough in the first place.

Why do buyers typically back out?

As mentioned before, buyers rarely back out after a purchase agreement. If they do, it's often because of something that came up during a professional home inspection or the final walkthrough. It could be any number of things, from the previous owner leaving a huge mess behind to a misunderstanding of repairs that were supposed to get done.

Other reasons may include a buyer being unable to secure financing or the results of a title survey or appraisal showing the land or home is more or less valuable than expected. If the purchase contract states that the buyer may cancel the sale due to financing issues or failure of professional inspections or final walkthrough, buyers can cancel the sale.

Backing out of a sale, however, is not always without consequence.

What financial or legal options do sellers have if a buyer backs out?

Real estate deals involve a lot of money and stress for both the buyer and seller. As such, a buyer backing out of a deal after the final walkthrough is frustrating. Sellers do have some recourse, however, provided they’ve protected themselves in the original purchase contract.

When signing a home purchase contract, most buyers put down a deposit known as “earnest money.” It’s typically between 1% and 10% of the total purchase price and is held in escrow until the official closing. Depending on the sales contract, a buyer may have to forfeit this earnest money to the seller if they back out. Some contracts can make the penalties even more severe, making buyers responsible for covering fees like home inspections and appraisals, even if the sale is canceled before closing. 

Sellers may also have legal recourse against buyers. It’s expensive to take someone to court, but if you feel that a buyer violated the purchase contract and backed out of the deal unlawfully, you can pursue damages in court. If successful, sellers can reclaim earnest money not received prior or force the buyer to compensate them for storage and living expenses brought on by expecting to move out.

While you do have some legal and financial recourse against a buyer who backs out after the final walkthrough, it depends on the purchase contract you both signed. The best way to avoid any additional stress and frustration, however, is to ensure a successful final walkthrough in the first place.

7 steps to ensure a successful final walkthrough

The final walkthrough is the home stretch of the home selling process, and it isn’t that hard to get over the finish line. 

As a seller, the best way to prepare for your final walkthrough is to review your purchase agreement with your real estate agent. The terms will lay out what you need to do regarding the house’s condition, repairs, and items to leave on the property. Each deal is unique and you should have some memory of negotiating these things, but review the written agreement to make sure you know what you have to do.

Generally, these are the most important steps to take to ensure a successful final walkthrough.

1. Make the house spotless

Nobody wants to move into a dirty home. It’s your responsibility as the seller to make sure the house has been cleaned, swept, vacuumed, and cleared of rubbish and clutter. The buyer might do a deep clean after moving in regardless, but that doesn’t mean you shouldn’t get the house in good shape for them.

Dispose of the trash, recycling, compost, and lawn debris completely — don’t just leave them sitting on the lawn waiting to be picked up.

2. Don’t remove anything attached to the house

Most purchase agreements state that anything attached to the home must remain there. That includes window treatments, light fixtures, water heater, HVAC system, large appliances, or anything else bolted, nailed down, or mounted. You may have bolted, nailed down, or mounted some sconces that you love, but you’ll have to negotiate bringing them with you as a condition of the sale and include it in writing in the contract. 

If something attached to the house is missing when the buyer arrives for their final walkthrough, they may have legitimate recourse to back out of the sale. Again, review the purchase agreement to make sure you haven’t taken anything you weren’t supposed to.

3. Don’t leave anything the buyer hasn’t agreed to keep

You can’t take certain items, and you shouldn’t leave ones the buyer doesn’t want either. The home should be empty of anything the purchase agreement doesn’t state should be there. If you didn’t want that box of old Christmas ornaments, the buyer doesn’t either.

Can’t remember how you got a couch in and can’t seem to get it out? Don’t expect the buyer to miss something like that. If you really can’t solve a problem, explain to the buyer that you will pay for someone to do so.

4. Take care of agreed-upon repairs

After a home inspection, a buyer might negotiate some repairs that they don’t want to take on. If you agree to those repairs, they’ll be in the purchase agreement. It’s your responsibility to get them done on time — preferably before the final walkthrough. If there are delays or problems with certain repairs, explain them upfront to the buyer and how you plan to fix them.

Also, keep receipts detailing each project. Not only are receipts proof that you’ve made the agreed-upon repairs, but if you negotiated a repair budget and it went over, you might be able to get the buyer to offset some of the cost.

5. Don’t shut off the utilities

One of the most common mistakes sellers make before the final walkthrough is turning off the utilities. A home with no electricity and gas raises red flags. Since you won’t be there, the buyer won’t know if you turned off the power or if the house has a fundamental problem that an inspection missed.

Utility issues might delay your closing. You are responsible for maintaining the house until you officially hand over the keys. Don’t cancel the utilities until you’ve closed on the home and the next family is ready to move in. Only then does it become their problem.

6. Make sure the appliances work

Buyers treat the final walkthrough as one last chance to confirm the house is move-in ready. That means they will test everything to ensure all of the appliances and switches are in working order. Here’s the appliance checklist for sellers:

• Test all light switches to ensure lights and ceiling fans are working
• Run all sink and bath faucets and check for any leaks
• Test all of the kitchen appliances and garbage disposal
• Test all of the electrical outlets
• Test the heater and air conditioner
• Open, close, and test the locks on all windows and doors
• Flush all toilets to check for leaks or problems
• Run exhaust fans in the bathrooms and kitchen
• Inspect the walls, flooring, and ceilings for cracks or damage
• Check the home exterior for damage or new cosmetic issues

7. Be careful when moving out

In most cases, a buyer decided to buy a home while a seller was still living in it. That means they don’t want to pay for the scuffs or holes you put in the walls while moving. 

Causing new damage to the home while moving out can cause delays in closing because you’ll have to negotiate over fixing new damage. Most moving damage is easy to fix, and you can do it before the final walkthrough by doing your own examination after moving. If you used a moving company that damaged your property, file a complaint and make them pay for any required repairs. A buyer shouldn’t inherit new damage, and a seller shouldn’t be on the hook for someone else’s mistakes.