Cold feet. Hot mess.
Thinking of walking away from a commercial real estate loan mid-process?

Here’s what actually happens when you back out — and why it can cost you more than you think.

 1. You May Lose Your Deposit!
Most deposits are **non-refundable** after third-party reports start.
• $4,000 environmental report? Gone.
• $3,500 appraisal? Already ordered.

 2. Lenders Keep a “Walk-Away File”
They don’t blacklist you, but notes go in your file. Too many exits = reputation hit and possibly difficulty in getting approved for funding in the future.

 3. Time Wasted
You may not see it or even believe it, but lenders have already invested hours in underwriting and credit review and making calls for due diligence. Not to mention the time that you have exhausted puling together documents.

4. Contract Penalties
Backing out can cost you the earnest money deposit (EMD) or even trigger legal issues with the seller.

So When Is It Okay to Walk?
✔ When the seller backs out because of something beyond their control
✔ If you have been transparent with your lender and broker from Day 1 about any variables they should be aware of.
✔ If you have offered to cover any costs already incurred

Finally, start serious and committed or don’t start at all.
Commercial real estate loans take time and money—don’t enter if you’re not fully ready.

Want to know if your prepared for the funding process so you don’t end up in a mid-deal disaster?
📌 Take our Funding Scorecard Quiz and get deal-ready.

DISCLAIMER: This is not real estate, legal, or financial advice. Please contact your preferred attorney or financial adviser for help specific to your needs or issue.