How can I get my earnest money back

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How can I get my earnest money back

After I sign the contract I thought about it that night
and realized I couldn’t afford the mortgage amount so I
need to back out of the deal

Asked on August 27, 2017 under Real Estate Law, Colorado

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

You *can't* just change your mind and back out of a deal and get your earnest money back, and not being able to afford the mortgage is *not* valid grounds to get out of the contract.
You can only get of the contract while getting your money back if one of the following exists or occurs:
1) The contract has some cancellation or termination clause that lets you terminate the agreement and get your money back, and you *precisely* comply with its requirements.
2) The seller provably lied to you about something material, or important, to get you to sign the contract; that would be fraud, and fraud provides a basis for voiding a contract.
3) The seller breaches or violates some material term of the agreement. 
Otherwise, you are obligated and the seller can keep your earnest money.


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