Legal Question in Real Estate Law in New Jersey

Re: circumstances needed for buyer to keep deposit

Usually the broker is not permitted to return a deposit from escrow without the mutual consent of both parties and/or their attorneys. These is usually a specific provision in the contract about this, so the unauthorized return is actionable against both the buyer and the broker holding the escrow.

Yes, to make the claim there must be damages.

You have not explained whether the contract was completed and the details about the mortgage rate. What did the contract provide as to the rate and the mortgage contingency? If the contract called for a "prevailing rate" and that is what was offered, terminating the contract constitutes a default. "Prevailong rate" also takes into consideration the creditworthyness of the buyer, so if the rate was higher due to bad credit, it may still qualify as being the "prevailing rate".

It sounds like you should retain an attorney if you had damages. Damages include costs of relisting and advertising the property, legal fees for the aborted contract, and any differential in the seller price if the market dropped. Also, some carrying charges may qualify as damages.