Contracts
Under what circumstances may a buyer receive their earnest money deposit back without penalty in California?
ANever; deposits are always forfeited if the buyer cancels
BWhen the buyer cancels pursuant to a valid, unfulfilled contingency✓ Correct
COnly if the seller agrees to return it
DOnly within the first 24 hours after signing
Explanation
A buyer may cancel and receive their deposit back without penalty if they cancel within the timeframe allowed by a valid contingency (e.g., financing, inspection, or appraisal) that has not been satisfied or waived.
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