What happens to the earnest money if the buyer backs out?

What happens to earnest money when a buyer backs out comes down to why they backed out and what the contract allows.

If the buyer cancels within a protected contingency, like inspection, financing, or appraisal, they typically get their earnest money back as long as they follow the agreed-upon timelines.

If they back out after those contingencies expire or for a reason not covered, the seller usually keeps the deposit as compensation for the deal falling through.

There is also a middle ground. If both parties disagree, the earnest money stays in escrow until a resolution is reached, whether that is a signed release, mediation, or legal action.

The key is that earnest money is not automatic. It is entirely controlled by how the contract is written and executed.

This is where Dan Tinghitella stands out. He approaches every deal with a focus on protection, structuring contracts in a way that gives his clients leverage and clarity before issues ever arise. On 30A, that level of precision can be the difference between keeping or losing a significant deposit.