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Reviewed July 2020


The buyer qualifies for financing and the transaction is scheduled to close. The day before the scheduled closing date, the buyer dies. The lender then withdraws financing approval. After the death of the buyer, is the buyer’s estate required to perform under the contract? If so, and the buyer’s estate does not perform under the contract, is the earnest money forfeited to the seller?


The general rule is that, unless the contract is a personal services contract such as a listing agreement, the contract is not cancelled upon the death of either party to the contract. Therefore, the buyer’s estate is required to perform under the contract after the buyer dies. If there is no longer any qualification for financing, however, the buyer’s estate should be able to recover the earnest money because of the unfulfilled loan contingency.