Buying a home comes with a litany of tasks, takes quite a bit of time, and of course, there’s a lot of money involved. It’s not just being pre-approved for a home loan, but also, the mortgage note down payment, inspections such as home, pest, and wind mitigation, moving expenses, closing costs, as well as an earnest money deposit. Simply put, you’ll be pulling your wallet out often, but it’s well worthwhile to own a home in a great place like Sarasota.

It’s not unusual for buyers, especially those house hunting for the first time, to be a little uneasy with parting with up-to thousands of dollars, based on a promise they have little control of keeping. Keep in mind, it’s not that you don’t want to live-up to your word, life happens when you’re busying planning and you just might find yourself in a position of wanting your earnest money deposit back. Though this isn’t a very common situation, it does happen, and, probably more than you would guess.


The entire purpose for an earnest money deposit is it’s very namesake–it tells the seller you are committed to buy their property–that you are sincere and serious. However, your intentions don’t allow you to control reality, life, as mentioned, happens. When you make a purchase offer on a home, to ensure that you will be sold the property, you include several things, including an earnest money deposit. These clauses, known as contingencies are put in place to ensure that certain performances are completed by you and the seller.

“The earnest money deposit is an important part of the home buying process. It tells the seller you’re a committed buyer, and it helps fund your down payment. The amount you’ll pay for the earnest money deposit will depend on a few factors, such as policies and limitations in your state, the current real estate market, and what the seller requires. On average, however, you can expect to hand over 1-2% of the total purchase price as earnest money.” —

If there was no such thing as an earnest money deposit, anyone could make a purchase offer, with little to no intention of going through with the deal. Because sellers often double as buyers, meaning, they too are buying another property, it would be an extra large burden. The good faith deposit acts as a reassurance the buyer is committed, and, what’s more, it goes toward your down payment or closing costs. It’s held by a third party, with instructions on how to disburse it under different scenarios. With it being so important, you might imagine that it’s not simple to get it back.


Fortunately, the purchase offer, after being accepted by the seller becomes a purchase contract, making it a legally binding document. The agreement confers rights on the seller and the buyer. If one party decides to back out of the deal without proper cause, the other party can file a lawsuit. This might be greeted with incredulity, but there are documented cases in which parties have been sued under specific performance and lost. However, this doesn’t mean you’re without any options. Here are some scenarios in which you could get your earnest money deposit back:

  • The seller doesn’t make agreed repairs. If the purchase agreement contains repairs that are the responsibility of the seller to make, and, you discover said repairs have not been completed, you can get your good faith deposit back because the seller is not adhering to the agreement.
  • The mortgage financing falls through with the lender. Your earnest money deposit could be returned if you fail to qualify for final mortgage approval. This can happen for several reasons, such as the lender ran a second credit check just a couple of days before closing (what’s known as a “soft credit check”). An example would be you opened a new line of credit for furniture and that affected your debt-to-income ratio just enough to concern the lender.
  • The appraisal comes-in over the agreed selling price. While you’d be more than happy as a seller to learn that your property is worth more than estimated, that’s definitely not the case for the buyer. Should the appraisal value the home over the agreed selling price, the lender will either allow you to pay the difference up-front, or, pull the financing.
  • The inspections reveal costly problems. Sometimes, big problems the seller is unaware of are uncovered during the home inspection or pest inspection. Even if you offer to tackle the problems, the lender could very well cancel the financing.

Regardless of the reason why earnest money is returned, it won’t be the entire amount deposited as there is typically a fee, though it’s usually small. Be sure to consult with your buyer’s agent about the situation to learn what options are available.