Ace the New Jersey Salesperson State Exam 2025 – Sell Your Way to Success!

In real estate transactions, an earnest money deposit is a good faith gesture made by a buyer to show their commitment to purchasing a property. If a buyer decides to terminate their offer before the seller has responded, they typically have the right to do so without forfeiting their deposit. This is essential for protecting the buyer's interests.

When a buyer terminates their offer prior to the seller's acceptance, they are generally entitled to a full refund of the earnest money deposit, which in this case is $10,000. This provision allows buyers the flexibility to change their minds without suffering a financial penalty, as the agreement has not yet been formalized by the seller's acceptance. Receivership of the earnest money is contingent upon the completion of the contractual obligations and acceptance of the offer by the seller, which hasn't occurred in this scenario.

This understanding underscores the importance of earnest money as a tool for buyers during negotiations and helps to clarify the circumstances under which a deposit can be returned.