Note ~ This is an interesting question, it's not as clear as you might think. It largely depends on why the buyer didn't buy and where they were at on the due diligence. If they are within the home inspection period there's not a whole lot that you can do to get the earnest money. If you feel that they have not been honest with you, simply request in writing that they give you the home inspection report, if they do not get you the report by midnight of the last day, they you actually under Oregon law have right to the earnest money. Even still you may and in all likely hood will have to take it to small claims court.
When you are accepting the sales agreement be weary of Promissory notes insist on checks or cash being deposited into escrow. This is a way to stop buyers from submitting multiple offers of other homes, also you know that they are more serious if they're committing funds. A good time line for earnest money is within 72 hours of mutual acceptance. Be weary of people want to commit after the inspection period, as this may be another way to avoid putting money down, so they can submit multiple offers.
Buyers don't need more then a few days to have an inspection done, so 5-7 business days should be more then adequate (you don't need to give them the full 10 days if they're serious.)
Jason H. Gomes
Prudential NW Properties
Greater Portland Area
Here's an example of unclear language: "Seller to repair furnace prior to close." Well, what if the seller fixes it himself, does a bad job, the house won't pass FHA underwriting and the deal fails? In this instance, the seller can insist he's completed his obligation and should get the earnest money. The buyer may not agree.
Escrow companies will hold on to the earnest money until both sides agree in writing on what to do. This sounds great, but in For Sale By Owner disputes, one or both sides sometimes doesn't fully understand the obligations and won't sign the release. I've seen situations where one side will refuse to sign just out of cussedness.