I had a client ask me this today and, well, as with most things, it depends. There are a few different ways the buyer could get their earnest money back, but I am going to mention two of the most common ways.
1st Scenario: Inspection Findings – if the home inspector would find a major item during the home inspection, such as a leak in the roof, and the seller refuses to fix it, the buyer can be released from the contract and get their earnest money back.
2nd Scenario: Financing Problems – if for some reason the buyer’s lender cannot get a mortgage finalized for the buyer, the buyer will loose out on the home, but should get their earnest money back as long as the buyer’s agent wrote that contingency into the contract.
**Buyer’s Beware: You are entering into a legal binding document. If you decide to walk away from the transaction for no particular reason, the sellers will get to keep your earnest money.
Teri Fleming – Coldwell Banker Hedges Realty