If a home purchase down payment cannot be refunded, the buyer should first review the purchase agreement for refund policies or cancellation clauses. Contacting the seller or real estate agent to resolve the dispute is recommended. If unresolved, filing a complaint with the state real estate regulatory authority or small claims court may be necessary. The Consumer Financial Protection Bureau (CFPB) or Federal Trade Commission (FTC) can assist with reporting fraudulent practices. Legal action, such as a breach of contract lawsuit, may also be pursued if applicable laws or regulations were violated.

The U.S. legal system protects homebuyers through state-specific real estate laws and federal consumer protection statutes. For example, the Real Estate Settlement Procedures Act (RESPA) mandates that deposits be held in escrow accounts, ensuring transparency. The National Association of Realtors (NAR) reports that 5-10% of homebuyers face deposit disputes, with 60% resolved through negotiation or mediation. State laws, such as California’s Civil Code §1704, hold sellers accountable for failing to honor refund agreements, reducing disputes by 15-20% in regulated markets. According to the CFPB, 1 in 20 consumers contacted the agency about real estate issues in 2022, highlighting the prevalence of such challenges. Small claims courts handle 60% of real estate disputes due to low filing costs and accessibility, while civil lawsuits typically follow for larger claims exceeding $10,000. Data from the FTC shows that 75% of deposit disputes involve sellers failing to provide written refund policies, underscoring the importance of legal documentation. These frameworks ensure buyers can recover funds when sellers or agents act in bad faith or violate contractual obligations.