Who gets to keep Earnest money

[Cesar Cepeda]

Hey guys I’m hoping someone can help me with a situation I got into today. I’m set to close on a property tomorrow morning and upon a final walk through today to check if all items noted on inspection report had been completed we noticed that not only had the items not been addressed but there was also a water leak coming from the roof. We decided to terminate the contract and the seller is now doing everything that was suppose to get done on the inspection report. They are saying they are entitled to the earnest money since they will have everything addressed by tomorrow morning. Does anyone know what I could do to retain the earnest money? I already spent on appraisals, inspections, and land surveys. We do have a contingency that all items must be completed from inspection report. 

Thanks in advance!