There are so many unanswered details in your question that any simple answer is really irrelevant. Making an offer does not bind you to anything if it is not accepted. An offer can only become a contract when all terms are accepted and both parties have signed the contract. Once you are under contract, you have several conditions to meet, such as obtaining financing or proving you have funds available to close the deal. These must all be met by deadlines spelled out in the offer.

However, the contract will also provide you with several conditions under which you can legally cancel the contract. These include things like your inability to get approved by a lender, you find the property unacceptable when you have it inspected or the appraisal does not determine that the home is worth the contract price. There may be other reasons under which you could cancel, but you should have a conversation with your agent about all of these BEFORE you submit the offer.

If you do not close because you cancelled the contract under one of your conditions, you should get your earnest money back and you have no further liability. If, however, the contract was not cancelled by either you or the seller prior to closing, and you simply refuse to close, you could face one or both of two losses. In Colorado (and I believe in all other States), there are two boxes that can be checked that impose penalties if you should simply fail (refuse) to close.

The first is Liquidated Damages. It is the most generally checked option. It means that you would be liable ONLY for the amount of earnest money you deposited when you went under contract. That money would go to the Seller as compensation. In Colorado, under this provision, the Seller would then have no right to sue you for additional compensation.

The second option is called Specific Performance. Under this, the Seller would have the right to sue you and force you to either go forward with the purchase or to pay any costs or penalties determined by the court.

There is enough legality in any purchase or property that it is ALWAYS in your best interest to work with an experienced agent, and that the agent represent you as a BUYER’s Agent.

I hope this helps.