It happens all the time, regardless of what your agent says. Curious, your agent is suppose to be your advocate, not arguing for the other side.
Most often, if you can explain your situation and do so with sincerity, you'll just end up losing your earnest money. But the seller could sue you for loss of value (damages), and potentially more. Your best shot may be to write a letter, with all the sincerity you can, and a reasonable, well thought out explanation of why you don't feel comfortable with the purchase. Ask for the seller's forgiveness and that you understand you will give up your earnest money.
To seal the deal, you need get an agreement in place that says you and the seller are both agreeing to terminate the contract and that the seller is accepting your earnest money deposit as full damages and will not pursue further action.
That said, the above is not a legal opinion, and you really, really need to get an attorney to make sure you don't lose more than your earnest money.
Best of luck,
The reality is your agent may not have experienced this situation previously and may be unsure of the legal implications. It's basic 101 real estate to understand that backing out of a contract will result, in most cases, with the buyer losing their ernest money. However, anything beyond this falls within the arena of an attorney.
Since you could be held liable for attitional damages, it would be letf to the seller and his/her attorney to determine this direction. I'm sure you can imagine how creative this could be......
Seeking legal counsel at this point should be a real consideration.
The "Eckler Team"
ask your realtor to explain exactly what your contract states in a case like yours. You are probably correct in assuming that your deposit(s) will be lost. Depending on your contract, your seller may also ask for specific performance and/or damages.
We realtors are not allowed to give legal advice, so if your realtor can not provide all the answers (plus, s/he just lost a deal, so there is probably a bit of unhappiness hovering), or if it's get complicated, it's time to get a real estate attorney aboard.
All the best,
Tobias Kaiser, MS, CIPS
Greater Fort Lauderdale Real Estate Broker + Consultant
Certified International Property Specialist