Earnest Money Dispute - San Diego, California... Please Help

[Patrick Senas]

Hello All,

I submitted a Contract Cancellation earlier today to the sellers agent and now they either want all my EMD or we take this to arbitration. We removed contingencies 8 days ago but we received an updated disclosure from the seller 2 days ago. Closing date is suppose to be 8/16. According to my realtor and their attorneys, the CAR states that after receiving an disclosure new or update that we have 3 days to review it as a buyer and are able to cancel the contract depending on the situation. So the disclosure was from the termite repair being conducted on the home. At first it was just a spot damage repair but now they're taking stuff apart and replacing doors etc.

This is my first home and there are already many problems with the property. Leak in pipes, gas leaks, the electrical work isn't to code. So at first I was ok with that but now they're ripping through the house because of the termites. So from my perspective its just snowballing and I was expecting it to be turnkey. 

So we spoke to the sellers agent and obviously the sellers arent happy. They want to take this to arbitration and keep the entire $10k EMD. I have heard many things from different brokers and agents but am receiving mixed responses. If there is anyone that has actually gone through this process please let me know.

Questions:

1. Is the seller allowed to place the property back on the market if I didn't release escrow.

2. Can they actually PROVE damages that lets them keep the entire $10k. (It hasn't been a month since we signed the contract)

3. Should I get an actual RE attorney involved?

So I was told that in CA, proving damages is hard for the seller. All those repairs they are doing was required no matter the buyer anyway. They were all safety issues. I was also told that I hold all the cards since the property will be held up if i don't release escrow. As long as I don't sign the agreement to release funds to seller then they can't do anything about it. They also can't sell their home until then. I know it's a D*** move, but I'm not here to make friends and I'm not in the habit of letting money go when I don't have to legally. So if there is anyone that has gone through this process please chime in.

NOTE: I know agents that have never lost EMD for the buyer even after contingencies were removed but my realtor is NOT that guy. He's never been through this process which is a little unnerving for me. He seems hesitant but I need to make sure I get him to do whats right for me.

Thanks,
Pat