Can I get my escrow deposit refunded?
What happens if you put a deposit in escrow, but then you’re not sure you still want to buy the house? Can you get your deposit back?
In most cases, yes.
Entering in good faith
Many people don’t realize that when they enter into a contract to purchase a home, they have to put up money as a deposit. This shows the seller you’re entering the contract in good faith, because you’re willing to put some money down.
Generally speaking, your escrow deposit can be refunded. In most real estate contracts, you’ll have general “contingencies.” This means you’ll purchase the home “contingent” upon things such as a favorable home or termite inspection, or a loan approval.
Know your contingencies
Be clear with your Realtor up front so that you know which types of contingencies you have. For example, if an inspector discovers the property needs more work than you’re willing to tackle, your “inspections contingency” will allow you to exit the contract. If you have a “loan” contingency and you find out that your loan was denied or the interest rate has gone up, then you can exit the contract via your “loan contingency.”
There’s no such thing as a “cold feet” contingency, however. So make sure you’re serious about the home before you put up a deposit.