Does anyone think this fee is unreasonable? 

Tenants sometimes can have expectations that are a little unreasonable.

This may or may not be a big deal since I have have been in a tenants shoes before and I can understand if the tenant feels (rightly so or not) they have been unreasonably charged for cleaning a house they felt was left in immaculate condition.

Anyways they were completely unreasonable and the relationship clearly deteriorated. 

(the problem is that if your expectations were unreasonable from the start... it doesn't matter if you cancel this escrow or the next 5 escrows... you will always be in this situation if you keep going for the same type of property and in the same price point... ) Let's be more specific : Say you go to a city that retails a duplex for say $400k and rents are $1500 per unit or $3k for both sides (depending on size and bedroom count) then for you to expect a $350k price point to make your cash flow a certain ROI then it won't work... bc you are looking at properties on the MLS (if you are).

If you do out of state I would try to hedge your risk by finding a multi-family or larger apartment complex.If you are going to continue in MN I would look at many properties and create a comparison, you can also try to reverse your thinking by looking at market rent first then deciding what you are willing to pay for a property.Example would be: Fair market rent for 3 bed 1 bath is $1400: 1%= $140,000; 1.5%= $93,333 2%= $70,000Some of these sale prices are unreasonably low for certain areas, but this helps me identify what I am willing to pay for a property to feel comfortable with the cash flow.

PMs not only deal with disenchanted tenants, there are also issues with unreasonable landlords with too high of expectations.For properties in Kenosha/Racine, try @Corina EufingerFor Milwaukee, I use Citywide and LOVE THEM but if not them, then I'd use Ed at Welcome Home Milwaukee or Mike Baron from PMI as I know them personally and trust them.  

Your terms are not unreasonable.

Extremely unreasonable, I mean borderline completely irrational.

The people were just being so unreasonable due to a lack or recent sales in the area.