Earnest money is a deposit (commonly 1–3% of the price) showing a home seller you're serious. Whether you get it back if the deal dies depends almost entirely on the contingencies written into your purchase contract.
Earnest money sits in escrow and is credited toward your purchase at closing. The risk moment is when a deal falls apart: if you back out for a reason covered by a contingency — inspection, financing, appraisal, sale of your current home — you typically get it back. Back out for a reason that isn't covered, or miss a contingency deadline, and the seller can often keep it. That's why the contingency section and its deadlines are the most important part of the offer you sign, and why waiving contingencies to compete puts real money at risk.
Not if you have an appraisal contingency and act within its window. Without one, a low appraisal isn't automatically a way out.
You get the earnest money, and depending on the contract and state you may have further remedies, sometimes including specific performance. The contract's remedies section controls.
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