Earnest money for an LOI

January 25, 2022

by a searcher from INSEAD in Miami, FL, USA

Hi Searchers

I have a deal under LOI and have agreed (begrudgingly) to put a deposit down in good faith. My preferred lawyer does not have a trust account and my bank requires a non-refunable fee of $3,500 and wants to set up a 30 pg escrow agreement. The title agencies I've reached out to do not have business acquisition experience so they're hesitant to assist.

I'm looking for a low-cost alternative, any ideas?

Reply by an intermediary
from California State University, Northridge in California, USA

I most commonly use an escrow company. Some escrow companies perform services in multiple states. First Choice Business Brokers has 80 offices around the country. If you'll let me know what state the business is located in, I'll be happy to get a referral for you.

Reply by an investor
from Indiana University at Bloomington in Austin, TX, USA

Iron Mountain offers this service for software, perhaps they also have an account for something like this. That said, I've never before heard of providing earnest money on an LOI (as you're expending significant time and resources to complete diligence).

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