Can I get out of a new-construction purchase agreement by negotiating a mutual release?

In some circumstances, buyers and builders negotiate a mutual release — a formal agreement under which both parties agree to cancel the purchase agreement and set out what happens to the deposits. Mutual releases are not guaranteed and depend entirely on the builder's willingness to negotiate.

Builders may be more open to a mutual release if the project is early enough that reselling the unit is straightforward, if there is demand for the specific unit type, or if they have commercial reasons for wanting to re-enter the market with updated pricing. During market downturns, when resale values are lower, builders may be less willing to release you since reselling the unit at the current market price may produce a loss.

From the buyer's perspective, the terms of the mutual release — particularly how much of the deposit is returned — are entirely negotiable and vary widely. You should not expect to recover your full deposit in a mutual release, as the builder may have incurred costs or may seek compensation for any lost profit on a re-sale at a lower price.

Never sign a mutual release without having a lawyer review it first. The document will typically include releases of all claims on both sides, and once signed, your rights are extinguished. Ensure you understand exactly what you are giving up before signing.