Contracts
A buyer submits an offer that includes an inspection contingency. After the inspection, the buyer requests $8,000 in repairs. The seller refuses and the buyer withdraws. What happens to the earnest money?
AThe seller keeps the earnest money as liquidated damages
BThe earnest money is split 50/50 between buyer and seller
CThe buyer is entitled to return of the earnest money✓ Correct
DThe earnest money goes to the listing broker
Explanation
When a buyer properly exercises a contingency — such as an inspection contingency — and the parties cannot agree on remedies, the buyer is generally entitled to the return of their earnest money deposit.
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