Should the earnest money be returned?

**helpwanted** · 08-05-2009, 09:30 AM

I live in Denver, Colorado. I have a specific question regarding the earnest money. On 07/24/09, we signed a contact to sell our house to a buyer. The contract says that the inspection deadline is 08/01/09. Without ordering any inspection, the buyer faxed us a notice to terminate on 08/01/09, and it says the contract is terminated because the physical condition of the property is unsatisfactory to buyer. Our agent says that "in Colorado per the wording in the contract they can back out and use the inspection notice as a reason without conducting a formal inspection". Is this really true? Our agent told us that the buyer's husband doesn't like the tile/carpet condition and that's why they wanted to terminate the contract. If somebody could provide some expert opinion on this, I would really appreciate it. Should we fight to keep at least some of the earnest money or should we just return it in full?

**cptjroberts** · 08-05-2009, 12:09 PM

The language in the Inspection Clause of the Colorado Real Estate contract is "subjective discretion". Up until the deadline date of the Inspection Objection Clause, the buyer may terminate for ANY reason. My old real estate partner used to call the clause the "Becuase the Sky is Blue Clause". It is not worth pursuing legally and you should return the entire Earnest Money Deposit. If you don't, the buyers may legally pursue you. Good luck on your sale!

**tucsonhomes** · 08-05-2009, 04:09 PM

Why waste your time, energy, effort, and probably money chasing someone who doesn't want your house?

Get it back on the market as quickly as possible and find the "right" buyer.