Q: If a spouse dies just before you close on a contract you've written to purchase a house, are you still obligated to buy?
And are you entitled to your earnest money back, it happened after all dates expired so the earnest money went hard.
The most likely answer is that you are going to lose the earnest money if you don't close on the purchase. I would definitely talk to the other side and explain you situation though. They may feel bad about your situation and offer to give back part or all of the earnest money.
The Title company that is currently holding the earnest money is also holding a copy of the contract. If you cancel, they will feel free to give the earnest money to the seller.
The only way to stop this would be to sue for an injunction against payment of the earnest money. This could cost $1,500 or more if you hire an attorney. Even then, you would have to argue before a judge that your spouse's death was impossible to contemplate in the agreement and you should be allowed to get the earnest money. The problem is a judge is free to enforce the contract if they choose, and they may decide that the Seller has made the agreement with you in good faith and is due their fair payment for fulfilling their part in the contract up until now.
Fighting to keep the earnest money, if they won't give it to you because they are nice, will be risky and costly.
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