Earnest Money Deposit

Here is something I don’t get. For an apartment complex, you obviously inspect the property yourself as best as you can before you make an offer and go into escrow. Normally a 1% Earnest money deposit is required with you purchase agreement and it’s non-refundable. For a first time investor, I can inspect the property to the best of my knowledge, but I wouldn’t know for sure until the property is professional inspected. Which would be after the earnest money deposit. So say the bldg is $1 million, so the deposit would be around 10k. After the inspection, you find out it needs new roofs and new HVAC systems which could cost you hundreds of thousands. You try to negotiate with the seller but the most economical thing for you to do is to back out of the deal. So you lost $10k for trying to put a deal together?

Anyway around this? Is making the Earnest money deposit refundable, acceptable?

Submit the offer in writing with nthe earnest money and make it contingent on …whatever.


Thanks Keith