get initial deposit back when the buyer backs out due to personal reasons

What is the name of your state? california

We were less than two weeks from closing on the sale of our home, when last week our agent informed us that due to the husband on the sellers side, having an affair, he wants out of the relationship and buying the house. Now, my question is, because they are not going through with the purchase, are we entitled to the initial deposit? Their agent says since they are breaking up, they would not be approved for the loan, so that is why they should get their money back. We say, that all was well with the loan process according to our agent, who informed us of this the day before the (blank) hit the fan! They are backing out of the deal because of personal reasons, not the loan reason, and that is why we feel we are due this money. We lost out on a month of selling, money paid to repair extra stuff around the house they requested but did not have to be done, and we lost out on our backup buyer. Now the holidays are upon us, and we are nervous that we won't sell our house in time to get our money for our new home. Any advice? Thanks, K

[BelizeBreeze]

Now, my question is, because they are not going through with the purchase, are we entitled to the initial deposit?

Yes.

Their agent says since they are breaking up, they would not be approved for the loan, so that is why they should get their money back.

He has it backwards. They won't be approved for the loan based on their own actions, i.e., breaking up.

Any advice?

Sure, tell the buyer's agent to have a HAP HAP HAPPY Christmas then the buyer's can sue for the deposit.

Hi Donald, thanks for the quick reply. I just got off the phone with my agent, and she said the other agents says the loan people need something in writing right away stating that they are divorcing, so no loan approval. Just because they see it as a divorce, it is still due to the buyer's personal situation, correct?

[BelizeBreeze]

Originally Posted by radrav98

Hi Donald, thanks for the quick reply. I just got off the phone with my agent, and she said the other agents says the loan people need something in writing right away stating that they are divorcing, so no loan approval. Just because they see it as a divorce, it is still due to the buyer's personal situation, correct?

It's breezy and that's my take on it. However, you can expect a lawsuit. So take your buyer's agreement to a real estate attorney and get a local opinion.

[HomeGuru]

My take is that the Buyer will be able to get the mortgage loan denial letter, therefore the financing contingency will not be met. The transaction would be terminated and the Buyer would get their earnest money back.