A soft deposit a/k/
“good faith deposit” or “earnest money deposit”
made by Buyer in order to show Seller that Buyer is serious about purchasing the property.
A soft deposit is fully refundable should the buyer elect to terminate the contract at the end of the due diligence or option period.
The soft deposit is typically held by the buyer’s attorney in a trust or escrow account.
Buyer’s Liquid Capital is Not Available at time of Signing the Contract
For less than 1% of Sales Price, Buyer is able to obtain the right to purchase the Property
Due to Multiple Offers, Seller is Requiring a Larger Deposit from Buyer
Buyer is Waiting for Cash Proceeds from Sale of Another Property
Buyer has not obtained a Loan Commitment from Bank. Buyer’s Liquid Capital is Currently tied up in other Deals. Buyer understands the advantages of leveraging financing thru a soft deposit loan
1. BC Review the Purchase Agreement
2. If the Purchase Agreement qualifies, a new
3. Buyer purchases option contract from BC
4. BC and Seller signed the Purchase Agreement and the soft deposit is funded
6. If Buyer wants to purchase the Property, Buyer purchases the BC’s Membership Interest
7. If Buyer does not want to move forward, the option contract expires automatically