Assignee's EMD Deposits - Refundable or Non-refundable?

Question

Hi all, I'm wondering today how you, as a wholesaler-assignor, deal with the EMD coming from your end buyer/assignee.   Many local wholesaler/assignors I know stipulate that the EMD from the assignee is non-refundable.  At the same time, a casual perusal of forum posts here shows that many buyer/assignees  say that they would not pay a non-refundable deposit.

I have done it both ways, and find when I state that the assignee's EMD is non-refundable I get a lot of push-back.  My position is that it is my opportunity cost - if the assignee doesn't perform I have lost my opportunity to do the deal with another buyer.

Would appreciate everyone's thoughts on how you handle EMDs.  Do you make them refundable, or non-refundable?    My EMDs are usually in the $2500-$5000 range, depending on the price of the property.

Thanks, Alison

Alison M. · Answer

Does anyone have an argument for a refundable EMD?  If you do, how often have you had to refund the EMD?

Wayne Brooks · Answer

Of course, if the seller can't deliver title, the seller is in breach, not the buyer.

Alison M. · Answer

Thanks @Wayne Brooks and @Dick Rosen.  I agree it is a good screening factor.    Are there ever situations where you refund the non-refundable, such as if clear title can't be given?

Wayne Brooks · Answer

Agreed, if they're concerned about a refundable EM, they're probably trying to do the same flippy-do-dah you are.

Dick Rosen · Answer

I and everyone that I am familiar with, use non refundable deposits. The ones who back away from that really aren't the players you want. If the real players are backing away, you haven't built your reputation or the relationships enough.