Your agent would be best able to advise you? If your agent is not accessible, talk to your agent's broker.
Your real estate agent can advise you on this. Without knowing what type of contract you wrote and what type of sale it is (regular, short, REO, HUD, etc.), there is no one way to say.
Our new NEFAR contract has a sole discretion clause where the Buyer can conduct an inspection and cancel the contract based on the findings, as long as they provide a copy of the report to the Seller. There is also a finance contingency and if you do not qualify for your loan, you may back out.
If it's a short sale, there is a time period where you agree to wait in the Short Sale Addendum. If it goes past that, you can walk.
These are some of the scenarios -hope this helps!
Coldwell Banker Vanguard
If you signed the standard As-Is contract with an inspection contingency that has not lapsed and there are no special clauses added to the contract it is probably as easy as putting the cancellation request in writing to the seller. Make sure you send in a Release and Cancellation so whoever is holding escrow can release your earnest money.
The As-Is contract was hardly ever used pre-bubble but since banks require it on any short sale or foreclosure it is now used most of the time. As a buyers agent I love it as it really is nothing more than a free option on the property through the inspection period.
Hope this helps and if I can be of service in any way please feel free to contact me.