What must occur for earnest money to be returned to the buyer?

For earnest money to be returned to the buyer, the crucial factor is that the terms of the purchase contract are fulfilled. When a buyer places earnest money as a good faith deposit, it signifies their serious intention to complete the purchase. If the transaction is completed in accordance with the contract's stipulations, including any contingencies that allow for the return of earnest money, the buyer is entitled to receive their earnest money back.

This typically occurs under conditions set forth in the contract, such as successful closing or the buyer meeting all conditions specified in the agreement. If all parties hold up their end of the bargain and the contractual obligations are satisfied, then the earnest money is returned, demonstrating that the transaction has been conducted honorably and in good faith.

Additional scenarios where the earnest money is returned, such as the buyer's cancellation of the agreement due to a valid reason specified in the contract, fall under the broader umbrella of fulfilling contractual terms. However, it is the overall fulfillment of the contract conditions that primarily facilitates the return of earnest money.