Final answer:
The buyer generally forfeits their earnest money deposit if they back out of a potential home purchase, providing compensation to the seller for the time the property was taken off the market.
Step-by-step explanation:
If a buyer backs out of a potential purchase, the buyer generally forfeits their earnest money deposit. Earnest money is a deposit made to a seller that represents a buyer's good faith to buy a home. The purpose of the earnest money is to give the seller some compensation if the buyer breaches the contract and fails to follow through with the purchase of the property. Depending on the terms of the purchase agreement, there can be contingencies that allow the buyer to recover the earnest money, but if those contingencies are not met and the buyer simply changes their mind or fails to uphold their end of the agreement without a valid reason, the seller typically keeps the earnest money as compensation for the time the property was off the market and as some security against the change of plans.