do you have to return down payment money if they back out of sale

we was given earnest money to refrain from continue selling our home and to hold it for this lady till she got her check, now she wants her money back and does not want to buy thee home. she made out an agreement paper unnotirizedfor all parties to sign and I still have in my position and is now threating to take me to court for the return of her money.

Asked on March 18, 2016 under Real Estate Law, Indiana

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

You only have to return the money if--
1) You were the ones who pulled out of the sale or caused it to fall through; 
2) The sale falls through and becomes impossible due to reasons beyond your or her control (e.g. the house burned down, so you can't sell it to her);
3) The agreement between you and her (e.g. the contract of sale) specifically stated she could get her money back under certain circumstances--and those circumstances exist. 
Other than as the above, when a buyer gives a deposit and then does not carry through with the purchase, the seller can retain the deposit.


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