Nathan Payne breaks down earnest money deposits for wholesalers: typically $100-$500 for off-market deals, $500-$1,000 for on-market ones. The key is negotiating a 5-7 day inspection period into your contract so you can back out without losing the deposit if the deal doesn't work.
You're new to real estate and they ask you, hey, how much earnest money are you gonna put down? And you don't even know what they're talking about. What is earnest money? Earnest money is you putting money down saying, hey, in good faith, I'm gonna buy this house, and if I dip or if I leave, this is the money I'm putting up that you can get. Now, some earnest money is non-refundable, some is, it depends on the contract you signed. But basically, as a wholesaler, what you do is you say, hey, I'll put down, you know, I usually put down like $100, $100 to $500 if it's off market. If it's on market, you usually have to put more. But I usually ask the agent, where I say to the agent, hey, we usually put down $500 to $1,000, would that work? And if they're like, no, you need way more, for me, it doesn't really matter because in my contract I say, hey, you know, I need a due diligence period or an inspection period of 5, 7 days. What happens is in that inspection period, I'm running this by my buyer, the house is what I think it is and if I should go through with it. And if I cancel before my due diligence period or inspection period's over, I don't lose my money.
Why Traditional Wholesaling Keeps Failing You (Use This Pre-Flip Method Instead)
