If you had backed out, the seller would be entitled to keep your deposit. But if the seller backed out and/or failed to meet the requirements/conditions of the deal, he may not keep your deposit but rather must return it--or more accurately, he may only keep the deposit to the extent that the agreement between you specifically would allow him to keep it under these circumstances. Otherwise, the seller's failure to, or decision to not, go through with a deal requires him to return the deposit. It would be like buying a house--if the seller decides to pull out of the deal or fails to meet any contingencies, the would-be buyer gets his money back.