What happens to the earnest money if a buyer terminates the contract under the Loan Objection Deadline?

When a buyer terminates the contract under the Loan Objection Deadline, they are exercising a right defined in the contract, which allows them to back out if their financing conditions are not met. In this scenario, the earnest money is typically returned to the buyer to ensure fairness, as the buyer is acting within the agreed-upon contractual terms.

This provision is in place to protect the buyer’s interests, recognizing that the ability to secure financing is a critical component of the transaction. When a buyer formally objects before the deadline, it indicates they are unable to proceed with the loan, thus justifying the return of the earnest money without penalty.

Other choices suggest different scenarios that would not align with the protections given to the buyer under the terms of the loan objection. The broker's role in this context is to act in compliance with the contract stipulations, which includes returning the earnest money without delay upon the buyer's objection.