Can I withdraw from a real estate contract and receive my earnest money back if the house will not finance?

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Can I withdraw from a real estate contract and receive my earnest money back if the house will not finance?

We made an offer almost 3 months ago which was accepted. We expected to close about 3 weeks ago. However,while the inspection came back OK the appraisal revealed a bad septic system. It has been almost 4 weeks since the extension and no permits have been filed. We are done waiting.

Asked on April 16, 2012 under Real Estate Law, Oregon

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Your contract will govern your rights here, along with state law of course.  Was th contract "subject to" the report or any other caveats?  Is the septic system considered the responsibility of the seller (I am failry certain it is) and did you give them a definite time to correct the problem or give you an out?  Please take your contract to an attorney.  A formal letter may be needed here. Good luck.


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