Earnest money dispute during due diligence

UPDATED: Oct 1, 2022

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Earnest money dispute during due diligence

I was buying a house and during due diligence found that there were issues that needed to be repaired. Seller refused, so we terminated the contract during due diligence period. Now, the seller will not sign the termination unless we provide him a copy of the appraisal we purchased on the house. I do not want to provide this to him. What recourse do I have from him holding our earnest money hostage?

Asked on September 21, 2018 under Real Estate Law, Georgia


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

Your only option would be to sue him for its return and prove in court that under the terms of the contract, you were legally justified in terminating the contract and recovering your earnest money given the issues found. Of course, in that lawsuit, they will have the right to get and see a copy of that appraisal (in litigation, either party may get relevant information or documents from the other), so you may wish to provide it now, voluntarily, to see if you can work the matter out without a lawsuit.

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