Earnest money is a deposit you pay when you make an offer on a home
—it’s a way to show the seller that you mean business. In Indiana, once the offer is accepted, the buyer’s Earnest Money check is cashed and deposited in a special account of the Listing Broker until closing when it is credited back to the buyer.  But what happens if something comes up and you never buy the house?  Can you get that money back?

Here are 5 circumstances that allow you to recover your earnest money —  even if you don’t complete the purchase.

1. Appraisal contingency: With an appraisal contingency, you can recover your earnest money if the home is appraised for less than your offer. This gives you a better negotiating position—if the seller doesn’t agree to a lower price, you can get your earnest money back and walk away from the deal.

2. Major problems with the home: It may be your dream home at the surface level, but an inspection could reveal major, major problems—such as issues with the foundation, or flood damage. In that case, you can get your money back if the seller doesn’t agree to a lower price or make the necessary repairs to correct the issue.

3. The seller backs out: If the seller changes their mind about the transaction and decides not to sell— this doesn’t happen very often, but it could—then you get your earnest money back.

4. Your house hasn’t sold: Many buyers can’t afford a new home if they’re still financially responsible for their old one. In this case, you can work a sale contingency into the contract, and get your earnest money back if the home doesn’t sell soon enough.

5. Financing issues: Though there are some limits on financing contingencies, you can usually get your money back if you’re unable to get a loan.

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