Seller Refuses To Release Earnest Money
Location: Texas
I was supposed to close on a condo yesterday, but last week, my Loan Officer notified me that because the HOA is underfunded, I would have to put twice as much money in down payment than what we were originally planning.
I learned about this down payment requirement on a Thursday and we were supposed to close the following Monday (yesterday).
The contract I signed, says that “ this contract is subject to the buyer, obtaining financing as described in the attached third-party financing addendum”.
The financing addendum says that I have 21 days to get loan approval or terminate.
When I received the information about the required down payment, we were outside of those 21 days already.
I told my Loan Officer that I can’t do the down payment required, and he issued a denial letter.
My realtor told me that I should be able to get my earnest money back because of the loan denial. Now she’s changing her tune, and saying that we should terminate based on dissatisfaction of repairs. This is true. The seller did a really shitty job fixing the fence and they did not fix the roof at all before closing, and during a last-minute plumbing inspection (authorized by the seller and paid for by me), we discovered $55K in sewer line repairs. This plumbing inspection happened at the same time that I got the information about the down payment requirement.
Since I didn’t have the information about the required down payment until after the 21 days noted in the financing addendum, is it possible to still get my earnest money back?
Should I be arguing that due to the loan denial, I should get my earnest money back or should I argue that the repairs are too much (what the realtor is wanting to do). Or both?
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