In New Jersey, what happens to an earnest money deposit if the transaction fails due to the buyer's fault?

In New Jersey, when a real estate transaction fails due to the buyer's fault, the seller has the right to retain the earnest money deposit. This reflects the principle that the earnest money serves as a good faith assurance from the buyer to the seller, demonstrating the buyer's commitment to completing the transaction. If the buyer fails to fulfill their obligations, the seller may keep the deposit as compensation for the time and effort invested in the transaction, as well as for any potential loss incurred. This incentivizes buyers to act carefully and meet their contractual obligations. The other options do not align with standard practices regarding earnest money deposits in such scenarios.