Is $2,000 Non-Refundable Earnest Money Deposit (EMD) Normal?

[David Gunn]

I've got a seller who is asking for $2,000 Non-refundable EMD. I'm new at the buying game and would like to know if this is standard. When I do my due diligence and find out that the property is not a good value for me then wouldn't I be out $2K?

[John Thedford]

To protect yourself from these fringe operators here is what I suggest:
1. Always require WRITTEN comps that can be substantiated
2. Always require WRITTEN bids from LICENSED contractors
3, Always require WRITTEN comps to substantiate ARV
4. NEVER pay a non-refundable fee
5. Always correspond via email so there is written record to bring suit in the event of misrepresentation.

Unlicensed brokers generally have no insurance. From personal experience most just pull their ARVout of thin air. Lets see: claim it costs x and it will sell for y. If someone uses an agent, an agent won't provide or should NOT provide the BS an unlicensed broker does. They should not or do not provide rehab figures (to protect themselves). They should tell a prospective buyer to get their own bids. They can provide comps in some situations on an updated unit vs an original unit. Agents have something to lose, can be fined, and have their license suspended or revoked. Unlicensed brokers, acting as fringe operators skirting the laws have nothing to lose. They are acting as an agent without the laws, ethics requirements, education, and insurance that are vital IMO.

You might want to ask this person if THEY give the seller a non-refundable deposit. Bet not.