Earnest Money Deposit

Earnest Money Deposit is a confusing term for many buyers and sellers. Who gets it? What is it? Basically, it's a check to ensure the seller that the buyer is actually "earnestly" intending to purchase the home. Some sellers think that if the deal falls through, the earnest money deposit is automatically forfeit. Some buyers think that if the deal doesn't close, they automatically get the money back. Neither one is true. Even when the failure to close is the buyer's fault, the seller doesn't have a "right" to the deposit as a way to "punish" the buyer. Nor does the buyer automatically get the entire deposit back, even when they are not at fault.