Question: The buyer qualified for financing based on
the buyer’s income and other financial information. The lender
refuses to make the loan, however, based on the physical condition
of the home, specifically, the home needs a new roof. The seller
refuses to pay for a new roof. The seller is demanding the buyer’s
earnest money because the buyer personally qualified for financing.
Is the seller entitled to the buyer’s earnest money?
Answer: No. Although the buyer may have personally qualified
for financing, the buyer did not qualify for the financing to
purchase the home because of the physical condition of the home.
Therefore, the buyer is entitled to the return of the earnest
money.
