Buyer cancels contract after all contingency dates are satisfied, wants earnest $ returned. How would you handle this?


First time MHP seller here, would like some opinion from more experienced sellers. How would you handle this?

  • DD period expired 8 days prior
  • Fin contingency expired 8 days prior- buyer sent notice of approval 11 days ago
  • Additional deposit was due at that time, buyer said it was sent, but later canceled transfer. Contracts calls for default regarding this.

Buyer had an additional inspection done after the fact, cancels contract without any questions, conversation or negotiation and wants the earnest monies returned.

Although this is not a huge amount of money, the original earnest money was $10,000, additional earnest (never received) was for $5000. I like to think of myself as a fair and reasonable person, but I am having a difficult time why I should consider his request.

Please share your thoughts on how you would handle this?


Without having read the actual contract and assuming the situation is presented accurately and fairly it sounds like you are owed the earnest money deposit at this point.

I would be willing to waive the extra $5,000 if the buyer signs a release for the escrow company to send the deposited funds to the seller, and if he doesn’t I’d use it as extra leverage and threaten to sue for release of the escrow funds and the additional $5,000.


Why did they cancel the contract and how long was the feasibility period? Is there no way to remedy the concern and get the deal to close?


Noel_S- Thank you. It is a standardized contract, well defined terms.


jhutson, The feasibility period was 45 days. In my opinion, yes there could have been a remedy, but the buyer canceled the deal rather then explore or discuss options. Obviously that is his right, as such, the deal is done, with the earnest money being the last remaining point.

The MHP will sell, it is a small 28 units, 100% occupied community with 3 straight years grossing 140K. I likely was selling it too low, so now I have an opportunity to find out! Or… reconsider if I shouldn’t just keep it, as it has been essentially problem free for 5+ years.