What is Earnest Money Deposit (EMD)?
Earnest money is the deposit a buyer puts down at contract execution to demonstrate commitment. In wholesale deals, EMDs typically range from $10 to $1,000 — far smaller than retail. The EMD goes toward closing costs at closing, or to the seller if the buyer defaults.
Wholesalers want minimal EMDs because they're writing contracts they intend to assign — putting up real money on every contract drains capital fast. Sellers (and especially seller's agents) want larger EMDs as evidence of commitment.
Negotiation point: tying EMD to inspection period. Many wholesalers write contracts with a 7-14 day inspection period during which they can cancel for any reason and receive the EMD back. This effectively de-risks the EMD because the wholesaler can assign the contract before the inspection period ends.
EMDs are held in escrow (by a title company or attorney). They're NOT held by the wholesaler or the seller. Insist on a neutral escrow holder — disputes over EMD return are common and ugly when no escrow exists.
Concepts that connect.
Wholesaling is the real-estate strategy of putting a distressed property under purchase contract and assigning that contract to a cash buyer for a fee. The wholesaler never owns the property — they're paid for connecting motivated sellers to investor buyers.
An assignment fee is the amount a wholesaler is paid for assigning the rights of a real estate purchase contract to an end buyer. Typical fees in 2026 range from $5,000 to $25,000 on single-family deals, depending on the spread and the market.
A double close (also called a simultaneous close) is a wholesaling exit where the wholesaler actually buys the property from the seller and immediately resells to the end buyer in two back-to-back transactions. Used when an assignment isn't allowed or when the wholesaler wants to hide their margin.
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