Earnest Money forfeiture.

[Keith L.]

Hello all, I'm asking this question on behalf of a friend. The seller is insisting that they will be keeping the Ernest money as well as suing for repairs they made to get the property in compliance with FHA standards.

So here's the story.... The company advertised the house as empty and newly rehabbed....upon walkthrough the home is dirty and damaged with a tenant. My friend signed the contract to purchase the home 

The closing date came and went without the owner having the repairs done. My friend then recanted the contract after she noticed weeks later the home still has a tenant.

Company did fix the required repairs per FHA guidelines after the closing date. So who's at fault my friend or the seller?