You can still back out of the deal but you will typically forfeit your deposit or earnest money (sometimes in the $10’s of thousands). But I hear you with the seller’s market - we just purchased a couple homes in the Austin area, bid significantly over asking price, waived all contingencies, and offered free 2-month rent back.
I discussed this with our realtor: forfeiting your full 3% earnest deposit is apparently rare. It’s not automatic, and when somebody backs out due to a non-contingent reason, it’s usually for a fraction of the full earnest deposit. (At least, that’s for the SF Bay Area.)
Yeah, I can imagine if it’s for a legit reason (especially in a hot market like the other poster pointed out), the seller would probably try to work something out. I would feel like a jerk if I took someone’s $10K and then turned around and sold my house the next day.
in really hot markets the seller often does BETTER if someone backs out and they move on to the next set of buyers. It's not worth the trouble to try and collect, which is not a gimme. The deposit is not a formula but more convention and an amount that demonstrates good faith. You want to get back on the market and not mess around to maybe capture 5 grand gross.
