When must earnest money be returned to a buyer?

The correct response highlights that earnest money must be returned to the buyer if the transaction does not close and there is no dispute over that earnest money. This situation typically arises when the conditions outlined in the purchase agreement aren't met, leading to the transaction's failure. Following standard practices and legal guidelines, if the buyer has not violated any terms and there are no unresolved issues regarding the earnest money, the funds should be promptly returned to maintain fairness and uphold the integrity of real estate transactions.

In practical terms, this ensures that buyers are not penalized for circumstances beyond their control. It's essential to note that the timing of the return can vary; however, the presence of a dispute or an agreement between the buyer and seller regarding the earnest money can complicate or delay the return process. In this context, indicating that a refund must occur without a dispute solidifies the buyer's right to reclaim funds immediately if the deal falls through due to no fault of their own.