Should I try to get my earnest $ back??

[Account Closed]

I was in escrow on a house out of state. They required a $1000 earnest $ deposit. The escrow papers gave me 2 weeks to inspect property for defects. I asked for a 30 day escrow, but as I recall my realtor made it a 45 day. I had an inspection report done but the pictures weren’t very good. I sent the inspector back out to just text me photos from his phone so I could see them better. He said he couldn’t walk on the roof or go in the attic because it wasn’t safe. So I was laying in bed looking over the photos in detail a week or more before closing the deal and noticed when I zoomed in, the floor joists weren’t just discolored, they were rotted really bad. So bad they would have to be replaced completely to pass an inspection for financing (all of them). Bottom line, I pulled out of the deal and requested my emd back because they marketed a house that needed to be torn down completely and was not able to be saved. Do I have no right to my $1000 emd or am I justified in concluding the house isn’t able to be rehabbed? My realtor put my emd money with her broker and it still sits in their account. However they said they can’t give me the funds back, and since the seller wants my $, it will have to go through arbitration. The broker said I wouldn’t end up getting any money after arbitration anyways. He suggested I split funds with seller and move on. What do you think, should I move on, or get the $ back? One last note: this house was sitting on market for a good while, has water coming through roof, holes in ceilings, and a lot of mold.