Due Diligence Deposits

I wanted to share a recent experience I had with a broker. I submitted an LOI for a business in November. I flew to meet the owner pre-LOI as a way to potentially win the deal. It was fresh to the market and a decent company. The deal dragged on into December which is when I received the first counter offer. I submitted my second offer which mainly met them in the middle on the price ask. The second counter offer came in January. The broker now added a request for a non-refundable $35k due diligence deposit. They also wanted to negotiate the non-compete from 5 years to 2. I told the broker that both of those changes are 100% deal breakers for us. He went back to the seller and then got back to me. He called me on the phone to tell me that they are granting the request to remove the dd deposit and keep the non-compete at 5 years. He said ‘congratulations’. We hang up the phone and I read the marked up LOI he sent. The markup outlines a 30-day window of no deposit. Then deposits begin in order to continue diligence. Non-refundable $15k every 15 days after the 30-day window. I told the broker that these deposits are in no way market and walked away. The good news is I had another LOI recently signed, so walking away was emotionally easier. I wanted to share my story for the benefit of other searchers out there that may encounter situations like this. Run from dd deposits. Also run from people who play games like this. They present themselves as untrustworthy. Walking away from LOIs is difficult emotionally, but don’t allow yourself to get walked on.