Last updated October 28, 2026
Usually not. Most buyers who back out do it under a contingency, and their earnest money goes back to them. When a buyer doesn’t perform on the contract, the seller can keep it, but only through a release both sides sign. Here’s how that worked on real St. Louis deals.
Typically, no. Most buyers who back out do it during their contingencies, and the money goes back to them. The seller keeps it when the buyer fails to meet their contingencies or doesn’t perform on the contract. Over 13 years, my sellers have kept tens of thousands of dollars that way. When the seller keeps it ↓
When they back out under a contingency, on time: the inspection, the loan or the appraisal, if they kept it. It also goes back when the problem is on the seller’s side, as it did on a house with a $40,000-plus lien on the title. When the buyer gets it all back ↓
Both sides, in writing. The money sits with the title company or broker, and it moves on a mutual release that the buyer and the seller both sign. Neither side can take it on their own. How the release works ↓
It stays where it is. If no one signs a release, Missouri law requires the broker holding it to turn it over to the State Treasurer’s Unclaimed Property Division within 365 days of the projected closing date (RSMo 339.105.4). When nobody signs ↓
Sources: George Kindler’s signed mutual releases, 2024–2025; Missouri Revised Statutes §339.105.4. Contract terms vary, and your signed contract controls.
When the buyer doesn’t hold up their end. That usually means one of three things: they miss a contingency deadline, they back out for a reason the contract doesn’t give them, or they simply can’t close on time.
Even then, it isn’t automatic. The contract gives the seller the right to ask for it, and both sides have the right to ask the other to perform. The money moves when both sides sign a release. In every case below, that signed release is what put the money in the seller’s hands.
$5,725 across seven signed releases, from $500 to $1,500 each. These are the ones I’ve documented from the last two years; over 13 years, my sellers have kept tens of thousands of dollars.
| Released | Property | To seller | What happened |
|---|---|---|---|
| Feb 2024 | 1209 Hamlet Ct | $1,000 | Buyer couldn’t close after the appraisal didn’t meet the lender’s criteria |
| Mar 2024 | 9738 Lorna Ln | $500 | First buyer’s contract ended; a new buyer was already lined up |
| Aug 2024 | 171 Monteith Cir | $1,000 | Investor buying 12 properties couldn’t fund after three extensions |
| Aug 2024 | 4126 Exeter Ave | $1,500 | First investor buyer’s contract on an estate sale ended |
| Dec 2024 | 5635 Hodiamont Ave | $500 | Original buyer never performed; a replacement closed December 19 |
| May 2025 | 2832 Blackforest Dr | $725 | “Cash” depended on a Hawaii sale that slipped |
| Nov 2025 | 1445 Fairmeadows Ln | $500 | Buyer’s lender wasn’t ready; the sale was cancelled |
| Total | $5,725 | 7 signed releases |
Two patterns stand out. First, most of these buyers didn’t walk away from the house. They couldn’t close: a lender that wasn’t ready, an investor’s portfolio funding, a sale on the other side of the Pacific. Second, the deposits were small, $500 to $1,500. The deposit sets the most a seller can recover when a deal fails.
When they leave under a contingency on time, or when the problem is on the seller’s side. In March 2024, 6643 Chamberlain Avenue, listed around $165,000, went under contract with $1,500 earnest money. The title search turned up a mechanic’s lien of more than $40,000 and an open loan.
Before the buyer spent money on inspections, I asked the title company’s underwriter whether the lien would stop the sale. I didn’t want that buyer paying for an inspection on a house they couldn’t buy. A week later the contract ended in a mutual release, and all $1,500 went back to the buyer. The seller kept nothing.
For a buyer, the protection is the contingency deadline. What happens to your earnest money at each deadline →
The buyer and the seller, together. The money is held by the title company or the broker named in the contract, and it moves on a mutual release: one form that ends the contract and says who gets the deposit. Both sides sign it.
That’s why the release is the negotiation. On Blackforest, the buyer agreed to surrender the $725 and signed. On Chamberlain, the release sent it all back to the buyer. A request for the money isn’t a recovery; a signed release is.
The money stays put while they argue. If neither side signs a release, Missouri law requires the broker holding the funds to turn them over to the State Treasurer’s Unclaimed Property Division within 365 days of the initial projected closing date (RSMo 339.105.4).
So a fight over a 1% deposit can tie it up for a year, and it can tie up the house too. On a Maplewood sale, we were heading into earnest money dispute territory, and the seller chose to close instead. When it gets that far, talk to a real estate attorney, not just your agent.
More than most sellers ask for. About 1% is typical for a financed buyer in St. Louis, and none of the deposits in the table above was more than $1,500. On cash deals I’ve always recommended 10%, because a cash buyer has no loan contingency and the deposit is most of the seller’s protection.
Blackforest shows why: a $72,500 “cash” offer with $725 down. The seller kept it, but lost about a month on the market. How much earnest money to offer →
Situations
Not if the buyer has an appraisal contingency and uses it on time. Without one, a buyer who can’t close because of the appraisal can lose the deposit. On Hamlet Court, the buyer couldn’t close after the appraisal didn’t meet the lender’s criteria, and the signed release gave the seller $1,000. What a low appraisal does →
Not while the loan contingency is still open. After it ends, a buyer who can’t close can lose it. In November 2025 a buyer’s lender wasn’t ready by closing, the sale was cancelled, and the signed release gave the seller $500. All seven releases ↑
Yes. The release that ends the first contract also settles the deposit, and the seller is free to close with a new buyer. On Hodiamont Avenue, the first buyer’s release gave the seller $500, and a replacement buyer closed and funded on December 19, 2024. The 2024–2025 releases ↑
This is one piece of the St. Louis home buying process. See how it all fits together:
📚 Complete St. Louis Buyer Guide →
Grew up in South St. Louis, lived in Dogtown for 6 years, now in South County. You'll find us at Wellspring on Lindbergh on Sundays. I'm not selling you a house — I'm showing you how to think about buying or selling a house.
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