“If my inspection shows that a house has problems and I decide not to buy it, do I get my deposit back?”
Answer:
The standard California contract has an “Inspections and Investigations” contingency giving you a certain number of calendar days (usually 7 to 17) to inspect the home and cancel or ask for repairs.
Most contracts use an “active” release method that require you to sign off releasing that contingency, so if you haven’t signed to release it, you are legally entitled to get your deposit back.
Some contracts have a “passive” release method, where the contingency is automatically released after a certain number of calendar days (usually 7-17). So if you object in writing or cancel before the contingency expires, you are legally entitled to have your deposit returned.
To give you a totally accurate answer, notice I said “legally entitled”.
The seller must agree and instruct escrow to release your deposit. 99%+ of sellers will if you’re within your time frames. If one doesn’t, you can go to mediation, arbitration, small claims court, or superior court.
It rarely comes to this. In my 25 years in real estate and over 5,000 escrows, less than a handful of sellers have wrongly refused to release a deposit.
