After months of shopping, four offers that were rejected, and one inspection that uncovered excessive repairs, my clients won the negotiation on a house they loved. Huzzah! 

A few weeks before closing, they asked to visit the home to take measurements and brought friends and family along. Although they loved the house, their friends and family did not, and that’s where the trouble started. The call went something like this, “We don’t’ want to buy the house anymore, nobody likes it but us!” Maybe you already guessed that my clients couldn’t back out at this point without losing their deposit. If you are house hunting, know the rules before you put your hard-earned deposit down and sign the paperwork. It’s not always easy to change your mind.   

First things first, let's talk about why and how deposits are non-refundable. When buyers back out of the deal for reasons not covered by contingencies – like they change their minds, find out the house is haunted, or realize that the neighborhood rooster is up at the crack of dawn — whatever the reason, if it's not covered in the contract, you might kiss that deposit goodbye. 

Another way deposits can vanish into thin air is if you fail to meet deadlines outlined in the contract. Missing important dates such as the inspection period, or financing contingency, could give the seller the right to pocket your deposit. Your agent and lender will watch these dates, but you should put them on your calendar as well.  

Here are some tips to help you protect that hard-earned deposit: 

• Read, understand, and review the contract thoroughly. Reading legal jargon isn't exactly thrilling, but it’s crucial. Work with a great agent! 
• Negotiate contingency dates that protect your interests, whether it’s the home inspection, securing financing, or selling your current home. 
• Missing deadlines is one of the fastest ways to lose your deposit. If you foresee any issues meeting a deadline, communicate with your agent to request an extension if possible. 
• Work with Professionals: From your real estate agent to your lawyer and home inspector, enlist the help of experts who can guide you through the process and advocate for your best interests.  

P.S. Yes, my clients bought the house. Their Christmas card this year showed the family, new baby in tow, beaming in front of the fireplace with a note, “Thanks for sticking with us, we love this house!” All they need now is a dog — maybe next year.