When a buyer fails to obtain financing - who is entitled to the earnest money?I entered into a contract with a buyer on April 28, 2014. (Texas) They were applying for an FHA loan, and we did have a Third Part Financing Addendum for Credit Approval with a 14 day window to back out if they did not receive funding. Our original closing date was May 27, 2014. On or around May 27th, we were told that they needed to push out the closing. We agreed, and signed an amendment to extend the closing date in paragraph 9 of our contract (TREC No 20-11) to June 13. On June 9th we learned that the buyers were not approved for their loan by their mortgage company. At that time, we considered the contract terminated and moved on to a backup offer on our property. The buyers are now taking me to small claims court for the earnest money which I do not believe they are entitled to. Are they?June 17 2014 - Houston00YesReport a ProblemProblemSelect oneOffensive contentIrrelevant contentSpam (pure self-promotion)OtherDetailsYour emailPlease enter a valid email address.Submit CancelContent flaggedWe will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.We're sorry. This service is temporarily unavailable. Please come back later and try again.