If a buyer cancels based on an inability to qualify for financing after the Financing Deadline, what remedy is available to the seller?

When a buyer cancels a real estate transaction after the Financing Deadline due to an inability to qualify for financing, the seller has the right to pursue liquidated damages. This remedy serves to compensate the seller for the potential loss incurred because of the buyer's failure to follow through with the purchase agreement.

Liquidated damages typically refer to a predetermined amount agreed upon in the contract designed to cover the seller's costs and losses caused by the buyer’s breach. In real estate transactions, this is often represented by the earnest money deposit made by the buyer at the time of contract signing. If the buyer cancels after the Financing Deadline without a valid reason—such as the inability to qualify for financing being excluded from a contingency—the seller can keep the earnest money as compensation.

This concept helps motivate buyers to ensure they can secure funding before the deadline and provides sellers some financial recourse in case a buyer fails to proceed with the purchase.