The Answer: Yes and/or No.
The Explanation: If everything goes well, with no glitches, and the contract goes to closing, (i.e., basically the Buyer pays the purchase price and the Seller delivers the required deed), as a general rule, the amount of earnest money deposit is not really a significant item.
That said, under normal circumstances the Seller wants more earnest money to be put up with the real estate broker or escrow agent, and the Buyer prefers to put up less. If the transaction goes to closing, the earnest money will normally be applied to the purchase price at closing, and the parties do not give another thought to the amount of earnest money the Buyer put up.
In many real estate contracts, there is a component which is commonly referred to as the "due diligence period" or the "inspection period". Some due diligence provisions are general and allow the Buyer to cancel the contract for any reason during due diligence with proper notice and with the earnest money to be returned to the Buyer. Other contracts spell out specific due diligence items and limit the due diligence right to cancel to the specified items, such as getting a building permit, determination of utilities available, etc. If a limited number of specific due diligence items are spelled out in the contract, there is generally no due diligence related "Right to Cancel" except for the specified reason(s).
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