The earnest money on a 1.3M contract is doing more work than the purchase price, and most buyers at this level figure that out too late.

This thread is pitched at people who have already done luxury deals, so let me translate it for anyone newer to the room.

A few terms first.

Earnest money is a deposit you put down when you sign a purchase contract. It shows the seller you are serious. In a wholesale deal, you (the wholesaler) sign the contract with the seller, then assign, meaning transfer, that contract to an end buyer for a fee. The spread here is $70,000: you control a $1.3M property and sell the right to buy it to someone at $1.37M.

"Goes hard" means the deposit becomes non-refundable. In this case, day ten is when the seller gets to keep the $25,000 no matter what happens after.

What the post is showing.

At a $1.3M price, sellers and their attorneys expect earnest money around 2 to 3 percent, so roughly $26,000 to $39,000. A deposit below that range tells the seller's side the buyer may not be able to close. Once that read forms, the seller is already mentally preparing for the deal to fall apart, even while the clock is still running.

The specific risk for a wholesaler is that a long inspection window plus low earnest money looks like a free option on the property. An experienced attorney on the seller's side recognizes that structure quickly.

The thing worth adding for a beginner.

Luxury wholesaling is a specialist strategy. The buyer pool for distressed properties above $1M is genuinely thin, and building the relationships that give you access to those buyers takes time. If you are exploring this, the Rena strategy guide for luxury wholesaling covers that buyer pool challenge directly. Worth reading before assuming the fee size makes the math easy.

What stage are you at with real estate generally? That would help me point you somewhere useful.

The 25k on a 1.3M contract is the assumption doing the most work here. At roughly 1.9 percent, it sits just inside the bottom of the 2 to 3 percent band you cited, which means it probably passed a cursory check but still read thin to anyone paying attention. The more important variable is when it went hard. Day ten on a 40-day deal means the seller had real money on the table before due diligence was complete, and the end buyer still had 30 days of inspection window left to hide in. That asymmetry is where the deal actually died, not the financing shift.

The financing renegotiation at day 40 is a symptom, not the cause. A buyer who enters a 1.37M assignment without hard financing in place is carrying basis risk the assignor absorbed without pricing for it. A 70k fee sounds like it reflects the spread, but it does not reflect the contingency exposure. If the end buyer's capital stack is subject to lender approval, that approval condition belongs in the assignment agreement with a defined drop-dead date, not left open to a phone call on day 40.

The risk you did not name is the assignor's reputation with that seller's attorney. A deal that dies with hard money collected and no close is a single data point, but in luxury markets where deal flow runs through a small number of attorneys and brokers, that data point circulates. The next off-market opportunity from that channel becomes harder to access regardless of whose fault the failure was.

On the earnest money question, 2 to 3 percent hard on a short timeline is table stakes at this price point. Anything below that needs a compensating term, a shorter inspection window, a larger non-refundable initial deposit, something that tells the seller's counsel the buyer is committed.

What did your assignment agreement specify as the end buyer's contingency period, and was it tied to the original inspection window or independent of it?