Breaking Real Estate Contract

If by "Valuation" you mean the appraisal done by a bank as part of a mortgage application; and if your contract contains a mortgage contingency provision, by which you have the right to cancel the contract if you are unable to obtain mortgage financing for the purchase, then you would have the right to declare the contract null and void based on the low appraisal of the property. Since the property is not worth as much as the selling price and since the seller is unwilling to negotiate a lower selling price, the lender will not give you a mortgage commitment, so you are within your rights to cancel the contract and to demand the return of your $20,000.

You should review your purchase and sale agreement to see what its provisions are.

If your agent has been looking out for your interests, there should be contingency clauses in the agreement providing that you can back out of the agreement without penalty if certain things happen or do not happen.

In addition, in WA, a purchase and sale agreement of real estate must contain certain statutory elements (such as the property's legal description). Agreements without the statutory elements are generally not enforceable. A surprising number of purchase and sale agreement, especially ones prepared by self-represented persons, do not have statutory elements.

Given that you have at least $20,000 at stake, you may want to review your facts with your attorney.

I agree with both previous answers, your agent should prepare a recission agreement and deliver it to the closing agent and get your earnest money back, if you have a valuation contingency.

Good Luck