Earnest Money
Earnest money is a deposit a buyer places when signing a letter of intent or purchase agreement to demonstrate commitment. It is normally held in escrow, credited to the purchase price at closing, and refundable or forfeited depending on defined triggers.
Why Earnest Money Matters in a Laundromat Sale
Earnest money is a filter more than a remedy. A buyer unwilling to put money at risk is signalling how seriously to take their exclusivity request, and a seller granting a 60-day exclusive period without a deposit has stopped marketing for free. The negotiation that matters is not the amount but which contingencies keep it refundable and when it goes hard.
Example
A $12,000 deposit is fully refundable during a 45-day diligence period and while financing approval is pending, then becomes non-refundable except for seller default or failure of landlord consent. That structure protects a buyer from an unknowable outcome while giving the seller a real commitment.
What to Check
- Define exactly which contingencies keep the deposit refundable and when it goes hard.
- Hold the deposit with a neutral escrow agent, not with either party.
- Match the deposit size to the exclusivity period being requested.
Where This Comes Up
- Laundromat Earnest Money: Amount, Escrow, and Refund Triggers
- Laundromat Letter of Intent: What Belongs In It and What Does Not
- Laundromat Purchase Contingencies: Financing, Lease, Diligence, Licenses
Related Terms
- Escrow — Escrow is the arrangement in which a neutral third party holds funds and documents and releases them only when the agreed closing conditions are met
- LOI (Letter of Intent) — An LOI, or letter of intent
- Contingency — A contingency is a condition that must be satisfied before a buyer is obligated to close
- Proof of Funds — Proof of funds is documentary evidence that a buyer has the liquid capital to complete a purchase: bank or brokerage statements
See the full laundromat glossary for all 78 terms.
The Next Step
This page is general information about laundromat transactions, not legal, tax, or investment advice, and not a guarantee of sale price, timing, or financing approval. Verify current rules with your own CPA, attorney, lender, and the relevant state or municipal agency before acting.