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What is the difference between termination and release?

Termination may end the contract, but it does not release the parties from liability (i.e. they still may sue each other). On the other hand, a release not only terminates the contract, but releases each party from any and all liability.

Do I lose earnest money if I back out?

Due diligence money is non-refundable, whereas earnest money can be refunded. If youre buying it ``as-is it doesnt make sense to offer $50k in due diligence money, as youre not going to sway the seller with inspections that may otherwise favor your buying process.

Can I get my earnest money back if I change my mind?

You would get your earnest money back if the agreement is terminated based on any clause included in the contract. Could be inspection, could be appraisal, could be you dont secure financing. Whatever contingencies are written into the contract allow you to recoup your earnest money- its not just on the sellers end.

What happens to earnest money if a contract is cancelled?

After both parties mutually cancel the agreement, escrow is instructed to refund the earnest money deposit to the buyers. If the seller refuses to release the money from escrow, the parties should lawyer up as soon as possible.

Do you get earnest money back if you change your mind?

Earnest money is returned to the buyer at closing. The buyer can choose whether to apply the funds toward a down payment, closing costs or other settlement costs. But in some cases, if certain provisions of the purchase contract are broken, the buyer will have to forfeit the earnest money and the seller will keep it.

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