I have a deal in Texas that the seller is asking me for money for EMD, and he is firm on this. Do you think I should pay now or not? Thank you for your guidance.

DOnt pay them directly though pay the title company/ lawyer your using for closing

Standard practice. It shows you're serious. Without it, if you backed out of the deal for any reason, you have nothing to lose...but the seller has lost the time they pulled it off of the market...and maybe could have sold it to someone else.

EMD proves if you are serious about the property or not. The larger amount you put down, the more serious you are. I would call it a worthless offer if no EMD is provided and no licensed realtor would allow that.

@Farshid Khazaei if it’s non-refundable that’s a different story. Typically the EM is deposited with the title company to provide “consideration” and make the contract binding, but it’s refundable until a certain point in the transaction when you are past all of your contingency deadlines (inspection, appraisal, financing, due diligence, etc.). In some cases buyers will make the EM go hard upon acceptance to strengthen their offer, and in other cases wholesalers will require hard (non-refundable) earnest money but that’s not the norm. Usually it’s refundable and you’ll have at least a few ways to get out and get that EM back if something isn’t right with the deal or your financing falls through, etc.

It is pretty standard. So pay it. For any contracts, the contract is conditional upon there being a deposit, so if you don't pay, your contract is void.

EMD needs to be paid to show that you are serious in buying the property. However, the EMD goes to the title company/closing attorney to hold and credit at closing. Do not pay directly to the seller or wholesaler.

And make sure your EMD is refundable (with sufficient reason), not non-refundable.

I'm in CA and I never seen no EMD in residential properties when you go thru real estate agent/broker to make a deal. It again depends on the market too e.g. the market now is a seller's market so they can ask whatever they feel like. As everyone suggested above EMD must be refundable on inspection, appraisal or loan contingencies and place with escrow holder. Just be very careful, I would not put non-refundable EMD.

The posters above are assuming that you’re buying from a Whole Seller. I did not draw that conclusion. To me it sounded as if you were the Whole Seller trying to contact a Property. Also you never mention what kind of earnest money deposit that the seller was asking for. If you want more information you need to give more information for people to comment on.

Most wholesalers I have worked with ask for an EMD. pretty common.

In your opinion Is EMD a scam?In your opinion Is EMD a scam?

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In your opinion Is EMD a scam?

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