Non-refundable deposit to make an offer?

6 Replies

Hello All!

I'm looking to buy a single family property for $90,000- gets 17% ROI and recent updates to major ticket items. The catch is the seller (FSBO) wants $2000 non-refundable to submit an offer. She said the reason was she doesn't want to mess around with people who are not serious buyers. Seems a little off to me, but as a new investor I'm in the dark. I've read as many articles as I can about it and it seems like this is more standard when it comes to Wholesaling. Can anyone offer advice on whether this non-refundable deposit is reasonable or not?

Thanks for your time!

If you are going to close on it, then there is no problem. If you think you wont close, then dont make an offer.

@Justin Campbell

Higher Investment Opportunity = Higher Risk 

If that return is real, seems like it would be worth it. I would personally put $3k non-refundable. If it's a competitive property then she is probably looking for serious buyers who won't initially giver her flack about the deposit. Act like you don't care if you lose it and hold the sellers feet to the fire if anything goes sideways. Hire a excellent agent who understand the local market. Worst case scenario even if something does go wrong you can just not sign the cancellation. That way the seller can't sell the property to someone else, and you're not getting your deposit back either way so who cares?  The seller has to know that people are going to come to play ball if she's making demands like a non-refundable deposit. 

Originally posted by @Justin Campbell :

@Russell Brazil  The numbers look good, I want to close, but I won't know if I will close until I get an inspection. From your experience, is that atypical? Thanks, Russell. 

"I want to close, but"...? I reckon the only time a non-refundable deposit is not an outright scam is when the property is being sold as-is anyway, with no You-can-get-out-of-it clauses. 

If that applies with this one, then there is no "but"! Good luck...