In Ontario, a seller generally cannot back out of an accepted offer. Once both sides have signed the Agreement of Purchase and Sale, the contract is legally binding, and a seller who refuses to close can be sued for damages or ordered by a court to complete the sale.
The confusion usually comes from the word "accepted." Accepting an offer is not a handshake or a verbal understanding. It means signing a written contract. Ontario courts treat that signature seriously. Seller's remorse, a higher offer arriving the next day, or a change in family plans do not release a seller from the agreement.
There are three legitimate exits. The first is a seller's condition written into the agreement itself, such as a clause making the sale conditional on the seller buying another home or on their lawyer reviewing the contract. These are less common than buyer conditions but they do exist. The second is a failed buyer condition. If the buyer signed a conditional offer and cannot satisfy financing or inspection terms, the deal ends without either party being at fault. The third is a mutual release, where buyer and seller both agree in writing to cancel the transaction and direct where the deposit goes.
A seller who refuses to close a firm deal is in breach of contract. The buyer can sue for damages, which often means the difference between the agreed price and what the buyer eventually pays for a comparable property, plus costs like legal fees and temporary housing. In some cases a court will order specific performance instead, forcing the seller to hand over the property because that particular home cannot be replaced by money alone.
The deposit belongs to the buyer in this scenario and is returned in full. The seller may also face complications relisting, since the original buyer can register an interest against title while the dispute is active.
Anyone thinking about selling in Toronto should treat offer acceptance as the point of no return. Read every clause before signing, because after that moment the agreement runs the show.
Related reading: What Is a Firm Offer in Ontario Real Estate?, What Is a Mutual Release in Ontario Real Estate?, and What If You Can't Close on Your Ontario Home Purchase?.