There is a financing contingency(appraisal and loan), and an inspection contingency(which includes pest inspections).
A buyer has many protections in the California Purchase Agreement and must release the contingencies.
Up until all contingencies are released, the buyer can cancel and have their Deposit returned to them.
After a buyer has removed all the contingencies( in writing) in the contract, the buyer is then obligated to move forward with the purchase. If they cancel the contract, (after signing a release of contingencies), the seller has the right to the buyer's good faith deposit , Being aware of a situation is not the same as releasing contingencies.
Best of luck,
3 Leaf Realty
A pest report showing no current infestations would probably not be too relevant.
You and your agent should have asked for contingencies to be removed on the appropriate dates. If they refused, then you give the buyer a Notice to Perform.
Based on your comments and assuming you and the seller used a recent CAR RPA, it sounds like the buyer has the protection of the contingency clauses.
What is your agent (and his/her broker) telling you about this?
The three primary contingencies of the CAR Residential Purchase Agreement [ Loan / Appraisal / Inspection(s) ] require "active" removal by the Buyer in writing; as opposed to a "passive" removal where a date simply passes and automatically removes the contingency.
Therefore, given what you have shared, and assuming there were no other addendums that modified any of the RPA's standard language regarding the three contingencies, I would be of the opinion the Buyer should keep the entire deposit amount. Para 14C may provide some additional clarity regarding your situation.
Theoretically if the Buyer has contingencies left it would behoove you to release them and not tie your property up in lengthy litigation. Contingencies should be removed in writing, known as actively removed to be clean. If they are expired but not actively removed and the Buyer cancels they are potentially leaving their deposit in a vulnerable position. In order for escrow to release the deposit funds or any money for that matter, both sides will need to sign a release to distribute same. It seems like a negotiation should take place between the two sides to settle the dispute and not hold up you from selling your property to someone else. When in doubt a consultation with a real estate attorney will help clear it up for you. Find out from the attorney what your options are and seek the least costly option to you both in time and money.
Good luck and hope things work out for you.
During this period he does inspections and can also terminate the contract without any reason.
Ask your agent and he needs to explain you in depth.
Better Homes & Gardens Gary Greene, Realtor Katy/Houston
Fax: 281-646 1841
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