Q: We are in contract to sell our house, based on our contingency can we walk away with no fees?

A: Your agent appears to be relying on a listing agreement that calls for her to be paid her commission even if the buyer she found is precluded from closing due to the contingency in the purchase contract. So there are two different contracts at issue. One is the "listing agreement" with your agent. The other is the sale contract with your buyer. Your buyer cannot compel you to perform (cannot compel "specific performance") because of the non-happening of the contingency. It is reasonable to conclude that the "contingency" was a "condition precedent" to either party's obligation to perform. Upon the non-happening of the contingency, both parties are excused from further performance. Had you not made a good faith effort to obtain a replacement property you would not be able to take advantage of the non-happening of the condition (a party cannot benefit from his or her own non-feasance where that party was required to act). But, because you can affiance or otherwise establish, as necessary, your good faith efforts to find a replacement property, you cannot be penalized for the inability to obtain the replacement. You should instruct the person who is holding the earnest money to return it, in full, to the would-be buyer of your home.

Vis-a-vis your agent, her right to claim some commission turns on the wording of your listing agreement. I doubt it compels you to pay the buyer's agent (because you are not in contract with the buyer's agent) but you may be on the hook for your listing agent's commission. Speak to him or her about that agent finding another buyer during the term of the listing agreement or other solution short of adjudicating with your own agent.