Break fee

Definition

Money one side owes the other for walking away from a signed deal.

Why It Matters

It is rare at this deal size and it turns up in two places worth watching for. A seller who has been burned before may ask for one inside the exclusivity period, which converts your right to walk after diligence into a priced option. And a purchase agreement may carry one running the other way, payable if the seller takes a better offer. Either version is negotiable and both are worth reading against the deposit: a large earnest money deposit that is non-refundable after a date is a break fee wearing different clothes.