10% Earnest Money Deposit

[Isa G.]

I found a solid on-market foreclosure wholesaling opportunity in Portage, MI, ran the numbers, and called the listing agent to learn more about the property and potentially submit an offer. My buy price was 140k so I figured my earnest money deposit would need to be around $1k. However, when I said I was prepared to submit an offer at that price, the agent asked if I was prepared to make a 14k EMD. When I asked why this number wasn't around 1k the agent said that standard practice is 10% EMD for all-cash offers.

I've never heard of this practice of requiring 10% EMD on all-cash offers. Is this specific to foreclosures? Is this a tactic sellers/agents use to deter wholesalers?

[Bill P.]

@Isa G. I think it is his strategy to weed out the tire kickers like wholesalers as you suggested.