And, if you do file an lawsuit against the seller, you would risk having to pay for the seller's legal fees if you lose the case. In that case, we're probably looking at a bill for $50-100K.
Here's a great resource for you.
Michelle Leu Zaccone
330 Primrose Road, Suite 504
Burlingame, CA 94010
There is no upside to suing. If they won't sign, go through mediation. The mediators are very good at getting those in the wrong to see the error of their ways and it will cost you a lot less.
You state that you never removed your loan contingency because you did not get loan approval. Based on your statement, you have a very strong case to have your deposit released back to you.
The seller would be wise to sign the documents to direct the title company to release your deposit back to you. The seller can be forced to pay penalties if the seller unreasonably refuses to sign the necessary papers to release your deposit back to you.
Mediation and if necessary, arbitration is much quicker and lower cost than a lawsuit. The legal fees from a lawsuit would probably be more than the amount of the deposit.
I recommend that you start with mediation first, and if that is unsuccessful, then go to Arbitration. You will probably win.
Charles Butterfield MBA
Real Estate Broker/REALTOR
Cell Phone: (408)509-6218
Email Address: firstname.lastname@example.org