Are we entitled to 100% refund of our earnest money if the reason for cancellation of the purchase contract is due to evidence of termite formation from a home inspection?

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Are we entitled to 100% refund of our earnest money if the reason for cancellation of the purchase contract is due to evidence of termite formation from a home inspection?

The seller is subtracting $400 from our $2800 earnest money because we cancelled the purchase due to a home inspection paid by us revealing an evidence of termite formation. The $400 is subtracted because it was

Asked on October 21, 2016 under Real Estate Law, Kansas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Refunds in cases like this are governed completely by the contract of sale. If there was an "inspection contingency" or similar clause stating that you could cancel the sale and get your money back in the event of certain problems found at inspection, you should get *all* your money back unless the contract itself said that the seller could withhold $400. If contract does not let him withhold the money, he should return it; and if he doesn't, then he could be in breach of the contract and you could sue him (e.g. in small claims court, as your own attorney or "pro se" to save on legal fees) for the money.


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