Earnest Money - Would I Get it Back in This Case?

[Kathryn Bowden]

We have a house we are selling with a realtor. We entered into a contract with a buyer for $151,000 with $1,000 credit back on closing costs with a VA loan. Our appraisal came in at $140,000, which was very disappointing, especially considering we were in a multiple offer situation. :-( At first we agreed to split the difference with the buyer coming up with the cash. He had a chance to talk with his friends over the weekend, and decided he changed his mind and wouldn't pay a penny over the appraised price. We ended up offering him the $140,000 price, but without his $1,000 credit (the realtor also gave back 2% to us, and we really felt we just need to move on with this sale). He is dragging his feet on agreeing to this, which should be a no-brainer in my opinion if he wants the house - so us and realtor believe he must have cooled on the house. Our realtor says we would not get the earnest money in this case if he backs out because we are changing the contract with removing the $1,000 credit. She is probably correct, but do other professionals out there agree with this assessment?