Check with your attorney for legal advice, my opinion is just that. You'll need to check your contract, it should specifically state who gets it. Chances are it is the buyer. That's why it is a contingency contract. The only thing you would keep is the option money if there is any in most standard contracts. That's the tricky part of the contingency contract....you can write it with kickout clause in case someone else comes along.

These are good reasons to use a realtor or experienced board certified real estate attorney to write the contracts. Probably well worth the money.

You shouldnt be practicing law or real estate without a license.
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Scott, we all said, "check your contract", and Kendra said "seek advice from an attorney". So where exactly are we practicing law without a license?

the FSBO homeowner is not practicing law or real estate without a license, since she is not representing anybody other than herself.

You shouldnt be practicing law or real estate without a license. you are getting into iffy territory. The purchase and sales should spell out who holds the earnest money, it is virtually never the seller, a buyer would be crazy to sign that. but if they did it should be outlined that it needs to be help in a designated trust account and not mingled with other funds. it is needs to be help until the sale is closed or if teh contingincies are not met. the contract should state the offer is contingent upon selling their house within a specified amount of time, if so then the deposit goes back to the buyer. Most sellers will not accept contracts contingent upon teh buyer selling their property, you should have given them a first right of refusal so you could keep marketing the property. this is why you need a professional looking out for you. As well i hope you had the buyer sign teh federal and state disclosures including lead paint and the seller property information report BEFORE signing a purchase and sales, the fines are hefty for missing the lead paint page.

The first answer is correct it depends on what the contract says. If you are not sure then you need to seek advice from a real estate attorney because as Realtors we can not provide legal advice.

Arnie is correct.

All of this should have been worked out, in advance, and should be part of your contract. Read your contract carefully, and check what it says regarding the contingency and return of earnest monies.

Alyteal,

It all depends on how the contract is written. If an offer is contigent it will go to the buyer in most transactions. You could have non refundable earnest money or a date in the contract where the money will become non refundable. It all depends on what is in the contract.

Good luck,
Arnie