URGENT, possible loophole to save my earnest money

[Robert Alexis]

I placed an offer on a bank owned foreclosure that was accepted 9 days ago and am currently under a fully executed contract. We discovered a leak in the roof that will significantly increase rehab cost, making my HM Loan monthly payment too high to proceed. 

 I found wording in the contract that may allow me to walk away from the deal while keeping my 25k earnest money, but my attorney isn’t confident.

The inspection contingency states the “purchaser may inspect OR secure an inspection report of the property 5 days from the seller acceptance date”. Then the purchaser has 10 days from the acceptance date or 3 days from receiving an inspection report (whichever happens sooner) to provide written notice of disapproved items, after which, seller may request a copy of inspection reports supporting the claim of disapproved items . Then seller can decide to repair, reduce purchase price, or terminate agreement. 

My question is, if I have my lawyer submit a written notice tomorrow (on the 10 day deadline) claiming that I as the purchase inspected the property within the 5 day requirement from the acceptance date, can I then use an official inspection report that was provided on the 10th day as my supporting evidence,  even though the “official” inspection took place after the 5 day deadline?

I’m otherwise at risk of losing 25k earnest deposit

[Greg Scott]

You have already talked to a lawyer who has looked at all the documents. Nobody here can give you a better legal opinion.  My business opinion is, "What have you got to lose?".  Submitting the written notice costs you a pittance and might save you $25K.  Doing nothing certainly will cost you $25K.  If you cannot get the seller to repair the item, then you need to decide if you want to proceed.

You also should go back and look at how you are managing your business.  I've never bought a property that didn't have something unexpected upon inspection.  Either your underwriting is too aggressive or you need to get your inspections done in a timely fashion to comply with contractual obligations.

Good luck