Can a seller demand a deposit before agreeing to exclusivity at all?

Yes — nothing prevents a seller from making a deposit a condition of granting exclusivity, and some sellers use exactly this as a way to test how serious a buyer really is before giving up the right to talk to anyone else. Exclusivity has a real cost to the seller: for however long the period runs, other potential buyers are off the table, so asking for some financial commitment in exchange is a reasonable negotiating position, not a legal requirement either side is obligated to accept.

The nuance is that this is purely a negotiation tactic, not a standard or expected feature of every LOI. A buyer can reasonably decline, propose a smaller amount, or offer a shorter exclusivity period instead of a deposit, and there's no rule forcing either side to land on a particular structure. What matters more than whether you ask is how clearly the deposit's terms — amount, refundability, and what triggers keeping or returning it — are actually written down if the buyer agrees.

If you're considering conditioning exclusivity on a deposit, a Treadstone business lawyer can help you structure the request and the surrounding terms so it actually protects you rather than creating its own dispute later.