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Roger, Lawyer
Category: Real Estate Law
Satisfied Customers: 30898
Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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I am the owner of home that is for sale. We accepted an offer on our home, and earnest mo

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I am the owner of home that is for sale. We accepted an offer on our home, and earnest money was put down by the seller. The buyer scheduled the home inspection, and then decided to declare it to be an "unsatisfactory" home inspection, and they wanted out of the agreement. I contacted the home inspector, and he was shocked that the buyers backed out of the agreement, and said there were no material findings or deficiencies noted. As the seller, do I have any legal right to their earnest money?
Hi - my name is XXXXX XXXXX I'm a Real Estate litigation attorney. Thanks for your question.

USUALLY, the sales contract says that the buyer can cancel IF the property fails inspection - - but not because they just want out. IF the buyer cannot point to some specific reason why the inspection has caused them concern, you should be entitled to keep the earnest money if a cancellation occurs because they have no basis to get out.

It's likely that you would have to sue in order to keep the earnest money, however.
Customer: replied 3 years ago.
Thank you for your input. The buyers told me that if I wanted to pay them half the cost of the home inspection, then they would tell me specifically what was wrong; otherwise, they are exercising what they believe is their right to simply walk away. I have absolutely no idea what is wrong, and they will not afford me an answer, nor an opportunity to remedy their concerns. Their realtor is bothered with her client, and appears to not be in agreement with their decision. I'm tempted to simply let this go to small claims court and let it be handled in that fashion.
IF the contract says what most sales contracts do, they can't do that! That's the dumbest thing I've ever heard. If they want to cancel a contract, they better have a legitimate reason/basis to claim that some problem gives them the right to cancel.

You need to look at what the contract says, BUT most say that if the home fails inspection the seller can demand repairs OR cancel; or that the contract is based on a successful inspection. As long as there's not some crazy language that just gives the the right to walk away even with a successful inspection, you should be in the driver's seat as the non-breaching party.
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