The answer depends on the terms of the sales contract. Typically, the buyer places an earnest money deposit and in some instances, the contract contains a home inspection contingency. The buyer then has a specific period of time to get the home inspepcted and notify the seller if there are any repairs needed. The seller can do one of three things, under the standard form of sales contract:
1. He can fix the items requested by the buyer.
2. He can fix some of the items, and not others.
3. He can refuse to do any of the repairs.
At this point, the buyer must decide if he wants to go through with the purchase. If the seller fixes everything, the buyer must proceed or his earnest money is at risk. If the seller chooses #2 or #3, it's up to the buyer to decide whether to proceed with the contract, re-negotiate it, or cancel it. If the buyer cancels the purchase because of necessary repairs that the seller won't fix, the buyer would get his earnest money back IF THERE IS A HOME INSPECTION CONTINGENCY in the contract. If there is no home inspection contingency, the seller is under no obligation to do anything.
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