[WSBARP] Seller dispute earnest money over damage caused by buyer's inspector

[Eric Nelsen]

Thanks Craig! So your analysis is to focus on the general remedy clause, and assert Seller’s right to retain EM for breach (and the express Form 35 term that says Buyer is responsible for damage caused by inspection); versus the Buyer’s emphasis on the Form 35 language emphasizing that a valid termination under the contingency requires return of the EM. Yes?

Sincerely,

Eric

Eric C. Nelsen
Sayre Law Offices, PLLC
1417 31st Ave South
Seattle WA 98144-3909
206-625-0092
eric at sayrelawoffices.com<mailto:eric at sayrelawoffices.com>

From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Craig Blackmon
Sent: Wednesday, August 6, 2025 12:25 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] Seller dispute earnest money over damage caused by buyer's inspector

Eric, by my analysis, yes. The failure to repair the damage is itself a breach of the contract. Upon breach, seller's sole remedy is retention of the earnest money. If the earnest money exceeds the cost of repair, you might have an issue. But this certainly seems like a claim that is arguable, to say the least.

Craig
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On Wed, Aug 6, 2025 at 12:04 PM Eric Nelsen <eric at sayrelawoffices.com<mailto:eric at sayrelawoffices.com>> wrote:
Colleagues—

Does the standard NWMLS Form 21 allow a Seller to dispute return of earnest money, if the Buyer’s inspector causes damage to the property and then Buyer terminates the deal?

The Form 35 makes clear that the Buyer is responsible for all damage caused by inspection. BUT the contingency also expressly states that if it’s a valid termination under the contingency, the EM goes back to the Buyer.

Is Seller’s remedy for the damage limited to a separate lawsuit, or can Seller argue that the EM must be used to pay for the damage?

Sincerely,

Eric

Eric C. Nelsen
Sayre Law Offices, PLLC
1417 31st Ave South
Seattle WA 98144-3909
206-625-0092
eric at sayrelawoffices.com<mailto:eric at sayrelawoffices.com>

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