Revert to signed purchase agreement and escrow instruction. Have contingencies been removed or outstanding. What is reason for cancelling escrow at final walk-thru? I do not have enough information review contract with your Realtor.
Gail Mercedes Cole
EXP Realty Marina del Rey
Your agent should be taking care of you in this situation.. I pray you have a buyer agent. If you don't I also would highly recommend a Real Estate Lawyer at this point.
As others note, it depends on whether you've waived the contingencies (assuming there were some). But if certain work was supposed to be done (such as the termite damage repair) and it wasn't, you've got some ammunition to support you.
Remember, too, that money can be put into escrow at closing to cover the needed repairs. Or there are a couple of other ways to handle it so that the seller--in essence--pays for the work not done.
A lawyer (or your Realtor, if you have one) can better advise you on your options.
Hope that helps.
If the contract states they do repairs and they did not, then they have not held up their end of the contract.
What is the worst thing that can happen if we walk away. What is the cost of walking away?