Legal Question in Real Estate Law in California
Had an offer for home (we are seller), signed the offer exactly as it was given so no counter offer. Next day, buyer wants to back out as they didn't do their research re: HOA assessments are we (seller) entitled to their earnest money of $2500
2 Answers from Attorneys
The parties must both agree to cancellation of escrow, but if you haven't opened escrow, then you can decide among yourselves how to handle it. If you can't agree, the buyer could file suit for refund, but has no assurance of success. Realistically, negotiate a small payment to you and refund of the rest.
What does the contract say? Sellers are entitled to contract for liquidated damages in the event of a buyer's breach, generally up to 3% of the agreed price. If $2,500 is less than 3% and the contract calls for forfeiture of the deposit, keep it.
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