Final answer:
If a buyer forfeits an earnest money deposit, it typically goes to the seller as compensation for potential losses unless the contract specifies otherwise.
Step-by-step explanation:
When a buyer makes an earnest money deposit and later forfeits the deposit, the disposition of the forfeited earnest money typically depends on the terms of the contract and state laws. However, generally, if not otherwise negotiated differently, option d) It goes to the seller is the correct answer.
Earnest money is a good faith deposit demonstrating the buyer's commitment to completing the sale. If the buyer fails to follow through with the purchase under the terms of the contract without a valid contractual reason, the seller is often entitled to keep the earnest money as compensation for the time the property was off the market and other potential losses.
However, disbursement of earnest money must align with the real estate contract agreed upon by both parties.