Red Pear Realty said:
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Terminating under 2B for appraisal purpose isn't rare. Attempting to terminate under 2B with your fact situation and you holding the earnest money is rare.
Agreed.
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In response to Diggity, the Buyer can't just terminate at any time before closing,
Sure they can. There are just consequences for doing so, which is Diggity's point--the buyer probably had ~21 days or so to terminate per 2A, didn't meet that deadline ~80 days in, so they had an attorney friend write up a scary letter with the justification being 2B in hopes that EnronAg would blink first.
What Agilaw13 may mean is there is a time is of the essence clause in 2C. Buyers are supposed to secure financing and time is of the essence and in this case after 80 days, I think you could argue the buyers were not exhibiting that.
Sure buyers can terminate at any time before closing, but it's a matter of whether defaulted or not. It all depends on why the lender is pulling the financing which is what I would have made very clear ASAP.
Since there is no buyer contingency for selling their house first and IF the lender pulled financing because their house fell through (2 loans), then you might could argue that they defaulted.
This is not legal advice, definitely consult with an attorney.