I ran into a 3-offer bidding war yesterday where we were competing against a buyer who had offered a $50,000 non-refundable deposit. The seller wanted us to match it to stay in the game.
We didn’t like the sound of non-refundable (or their price), even though we agreed that it would be unlikely that a judge would allow a home seller to double-dip – unless there were actual damages. If the buyer did end up cancelling, and the seller sold it again for the same price or higher, is the seller damaged? Not really, but we didn’t want to risk potentially having to battle it out in court to find out.
Here is a great article about a case involving a non-refundable deposit of $620,000 – and how the courts felt about the seller trying to keep it:
The article also discusses the liquidated damages clause, and that selling an option-to-purchase to the buyer would be a better strategy for getting them to commit non-refundable money.