In the United States, a down payment for a house is generally non-refundable once the purchase agreement is signed. However, refunds may be possible under specific circumstances, such as mutual cancellation, financing issues, or property defects.

The refund policy hinges on the "earnest money deposit," a sum paid to show commitment to the purchase. This deposit is typically held in an escrow account and governed by the purchase agreement and state laws. If the buyer cancels the deal without valid reasons, the seller may keep the deposit. Conversely, refunds occur if the seller fails to meet obligations, financing falls through, or there are material property issues. According to the National Association of Realtors (NAR), approximately 5-10% of home purchases involve earnest money disputes annually, with most resolved through negotiation. For example, in 2022, NAR reported that 8% of all escrow disputes related to deposits were resolved in favor of buyers due to seller breaches. State laws also influence outcomes; California and New York require strict adherence to refund conditions, while others like Texas allow more seller flexibility. The average earnest money deposit in the U.S. is $5,000-$10,000, per Redfin data, reflecting the financial stakes involved. Legal counsel is often recommended to navigate refund eligibility, as misinterpretations of the purchase agreement can lead to costly disputes. Ultimately, the refundability of a down payment depends on contractual terms, state regulations, and the reason for cancellation.