Buyer is moving out of town can I keep the earnest money

**tlcthompson** · 09-25-2010, 12:53 PM

Here is the my current scenario: Accepted an offer from a buyer with contingency on them getting financing and selling there house (contract already on their house). Buyer is now relocating and moving out of town and backing out of the deal. They claim that since they are moving they won't qualify for financing. They were already pre approved at signing of contract. They are moving due to work and it is voluntary relocation. I feel like their qualification on financing depends on earnings not location. Can anyone advise if I should be able to keep the earnest money?

Thanks

**Greg** · 09-25-2010, 01:59 PM

Real estate laws are different everywhere but typically, a financing contingency typically has a clause that states the buyer has to try to obtain the loan with 'good faith' or something similar.

Our contract has this clause, ' Pursue qualification for and approval of the Loan diligently and in good faith;'

If you were my seller with this clause in the contract I would be advising you to keep the money because these buyers are not acting in good faith. Read your contract and see what the financing contingency says.

**agentsranking** · 09-25-2010, 01:59 PM

I think you might have a case however you should take a good look at their prequalification letter for financing. Most mortgage prequalification letters state that the buyer is prequalified based on their current financial and job scenario. It the buyers job has changed it may be a way for them to back out of purchasing your house.