You can pull out if you don't approve of the inspection reports or can't agree on what repairs need to be done, and who should pay for them. Usually you will find that a reasonable contingency will be allowed. Don't delay obtaining a signed purchase contract on a home that you really want. Negotiate the price, if the seller agrees he will sign. If you spend too much time before hand on dickering, the seller could very well get tired and sell the home to someone else.
Negotiation is an on-going process.
Once a price has been agreed on the rest can be negotiated through the contingencies already built into the contract. Counter offers Counter offers allow both buyer and seller to change some or all of the terms of the initial offer. If the seller agrees to some but not all of the conditions in the first offer he can have a counter offer drawn up to express the changes he would like to make. Likewise the buyer can come back with a counter-counteroffer to make changes. Hopefully a middle ground will be reached and agreed upon and the counter offer is signed and ratified.