LOI Deposit - Refund deadline and amount?

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June 05, 2025

by a searcher from University of Florida in Houston, TX, USA

Hi All, I've seen questions about LOI deposits on here but I don't believe I've seen this specific question. Very close to signing an LOI for a $2M acquisition - the seller insists on all if not a big portion of a $100K deposit going hard (i.e. becoming non-refundable to the buyer) by the signing of the purchase agreement. Is this common? I know deposits in general are not common practice. My concern is that even with a purchase agreement, is there still risk in financing falling through or even the seller backing out? In other words, things beyond my control. Curious for anyone's thoughts or experience. Many thanks!
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Reply by a searcher
from St. Cloud State University in Sheridan, WY 82801, USA
Fuck that. Back out at once. Simple as that.
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Reply by a searcher
from University of Toronto in Durham, ON N0G 1R0, Canada
Yikes. There is a brokerage I’ve worked with that requires a deposit upon acceptance of an LOI but it is held in trust and is refunded to the buyer if things don’t work out. It turned out to be fine in my case but I specified explicit terms including how long I expected the refund to take, etc. Anything non-refundable seems like a bad idea. Can they hold it in a trust or similar?
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