Brokers pushing for non-refundable deposits?

searcher profile

June 23, 2025

by a searcher from University of Virginia-Darden - Darden School of Business in Charlottesville, VA, USA

All, We've been getting some good traction on the LOIs, which is great. In both of our LOIs, the brokers have asked for a deposit. We've negotiated them to be refundable, but still it seems odd to me. One of the brokers pushed for a non-refundable deposit. (Hard no on that one.) We proposed a reciprocal breakup fee put in escrow so we don't get burned like we did in the last time where the seller decided to walk at the last minute. So two questions: 1) With the increase of folks in the ETA space, have you seen an uptick in brokers asking for deposits? 2) Have you had luck with a reciprocal agreement?
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commentor profile
Reply by a searcher
from Southern Methodist University in Dallas, TX, USA
(1) I have not (2) cannot speak to. In general, I agree that a non-refundable deposit is a hard "no" and if the broker isn't willing to give a little, I would feel forced to walk
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Reply by a professional
from University of North Carolina at Wilmington in West Palm Beach, FL, USA
The deal fatigue in the ETA space is definitely causing some buyers to make unreasonable concessions and pay unsustainable multiples. Unfortunately, not much can be done about this broader market dynamic. As others have mentioned, I'd recommend leaving the non-refundable deposits and unrealistic multiples to others. Hold fast to your target parameters and don't lose sleep over deals lost due to inexperienced brokers. Remember, there aren't many requirements to become a broker, and I'm skeptical of any broker pushing unrealistic terms like non-refundable deposits. Your approach with the reciprocal breakup fee is smart - but ask the broker what are we really trying to solve for and let that be the guide to a deal structure that works or doesn't.
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