What happens to escrow money when buyer changes mind?

When a buyer changes their mind after placing earnest money in escrow, the fate of the escrow funds typically depends on the terms of the purchase agreement. If the buyer has a legitimate contingency, such as failing a home inspection or not securing financing, they may be entitled to a refund. However, if the cancellation is without valid cause, the seller might be entitled to keep the escrow money as compensation for taking the property off the market. It's essential to review the contract and consult with a real estate professional for specific guidance.