The short answer is of course a person (you do not say if it is you or the seller) can back out of a real estate transaction for any reason, or no reason at all. The more complicated answer concerns the legal consequenses for such action. The Agreement of Sale (if any) will give you some of the answers, but you should review it with an experienced Real Estate Attorney and not count on the advice of a real estate agent. If the buyer (you) is backing out, the default provisions tell you what the consequenses might be. If the seller is backing out, it becomes very tricky; if you really, really still want the house, you may need to file an action in Specific Performance, and a Lis Pendens to keep the seller fromselling to someone else. Or you can just try to reach an amicable agreement with this person and move along with the transaction. Good luck.