Urgent, possible loophole to save my earnest money

[Robert Alexis]

I placed an offer on a bank owned foreclosure that was accepted 9 days ago and am currently under a fully executed contract. We discovered a leak in the roof that will significantly increase rehab cost, making my HM Loan monthly payment too high to proceed.

I found wording in the contract that may allow me to walk away from the deal while keeping my 25k earnest money, but my attorney isn’t confident.

The inspection contingency states the “purchaser may inspect OR secure an inspection report of the property 5 days from the seller acceptance date”. Then the purchaser has 10 days from the acceptance date or 3 days from receiving an inspection report (whichever happens sooner) to provide written notice of disapproved items, after which, seller may request a copy of inspection reports supporting the claim of disapproved items . Then seller can decide to repair, reduce purchase price, or terminate agreement.

My question is, if I have my lawyer submit a written notice tomorrow (on the 10 day deadline) claiming that I as the purchase inspected the property within the 5 day requirement from the acceptance date, can I then use an official inspection report that was provided on the 10th day as my supporting evidence, even though the “official” inspection took place after the 5 day deadline?

I’m otherwise at risk of losing 25k earnest deposit

[William Sing]

I'd probably lean more on the side of the lawyer. The timeline seems pretty clear. The only other potential out I could think of is if your state/contract has a financing contingency or maybe a seller property discloser contingency. The financing contingency would probably be the better option and if the roof has an issue the lender might not lend on it. From my knowledge, Appraisers will not actually appraise the property if it is not livable or the major systems (including the roof) are not working. I'm not an appraiser though so you'd have to double-check with them. The SPD contingency is likely to void since banks are usually able to waive those since they don't know. 

Given how banks operate, you may be able to slide this past them but you still have a chance of you losing the earnest money.