Dear Mike;
Best to you and I hope that you attain another Buyers very quickly. In my experience if a buyer wants out of a transaction, they will find a way to do it. Just be thankful that only 4 days were lost and that he really did not get out, due to an inspection and find problems with he property. If the problems were know to you because of the inspection, you would have to then disclose the findings in your form # 17. ( You really never want to see the full inspection ) Consider it a blessing in disguise, and this just means that a better Buyer is out there for your Condo.
Regards,
Natalee Thurston

Good luck to you with your home...have your Realtor reach out to the other buyer's agent and see if you can get the other buyer to come forward with an offer. It is apparent that your current buyers wanted out of the transaction, be glad that it happended early in the process so you aren't losing much time off the market.

In regards to your earnest deposit; I cannot comment because I am not licensed in your state and am unfamiliar with your contract. Through personal experience, it is difficult for sellers to retain the deposit monies when there are inspection/financing contingencies in the contract. When there is a disagreement with regard to the disbursement of deposit monies one needs to consider what they will be paying in legal fees to resolve the situation. Often times it makes more sense to return the monies and move on. It sounds as though you have a handle on your situation, if there are any questions, consult an attorney.
Best Wishes.....

Jennifer Tome
Keller Williams Princeton Real Estate
Licensed in NJ and PA

Thanks to everyone for your thoughts and advice. I think it's pretty clear from your answers that the money should be returned. Moving on to find another buyer!

An opinion can't be rendered till entire executed sales offer reviewed .

If option period IF buyer determines not purchase a home they have right forward an amendment request full refund of earnest money. However undetermined how your executed contract reads, number of days, and etc.

Both parties must sign amendment cancel. HOWEVER IF BUYER is under "rights " of sales agreement they are entitled full amount. IF buyer has passed option period then depends on sales contract.

Confer with listing agent , or attorney.

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Mark,

The answers below are great - you should obviously include your attorney to get a formal opinion.

The condo docs you ordered - I assume the resale certificate - are good for 90 days, so if your agent is any good, they may be able to resurrect the other offer & you can use those documents with that buyer.

I think the practical advice is the best: move on and get the condo sold to someone else.

I hope that helps!

If it is a standard form 35 from the MLS it is the buyers "subjective approval" . The inspection contingency is wide open.
When negotiating a deal it is important to tighten up the inspection contingencies and do your best to qualify the buyer before excepting the offer.

Buyers are not required to hire an inspector to inspect the property. They can do it themselves. This may be why you think it's not right because you know an inspector did not come to the condo. They are not required to show an inspection report anymore either, that shows what they are objecting to.

I concur with the rest. I think contacting an attorney on this would be a waste of time. I would contact the missed "potential offer" to let them know you're back on the market.

Best of luck.

As with any legal question, the answer is you should obtain your own legal counsel.

That said, assuming you're dealing with the standard NWMLS forms, Mack's interpretation of the documents is consistent with the standard thinking. We once had a buyer walk where all they did, at most, was drive their family by the property. By reading the keybox, we knew they had not gone inside.

If it was within the inspection contingency timeline, they have an out and the,
" Buyer’s inspection of the property is disapproved and the Agreement is terminated.” If there is any doubt, your Realtor® can call the Attorney Hotline and pose the question to them. Legal Advise is always advised. Though, the way it sounds, the Earnest Money would be returned to them. Consider it good you were only 4 days into the transaction and they did not waste anymore of your market time.

No.
Form 35 states right there at the top, right underneath the address of the property, "This agreement is conditioned upon the Buyer's subjective satisfaction with inspections of the Property and the improvements on the Property."
You want to try and argue that?
Release the EM and find another buyer.