Buying a home in Weston moves fast, and so do the dollars you put at risk. When your offer is accepted, you will be asked to place earnest money to show good faith. In a high‑price market like Weston, that deposit can be a meaningful sum, so it pays to understand how it works. In this guide, you will learn what earnest money is in Massachusetts, typical local practices, how refunds work, and smart steps to protect your funds. Let’s dive in.
What earnest money is
Earnest money is a deposit you make after your offer is accepted. It shows the seller you are serious while both sides work through contingencies and closing steps. If the sale closes, your deposit is credited to your down payment and closing costs.
The deposit also helps bind the agreement. If a buyer breaks the contract without a valid reason under the terms, the seller may be entitled to keep the deposit. The final outcome depends on the contract language and any contingencies that apply. If you face a dispute, speak with a qualified real estate attorney.
How it works in Massachusetts
Massachusetts uses standard forms and common escrow practices for earnest money. In many residential sales, the deposit is held in a regulated escrow or trust account until closing or until both parties sign a release. Attorney involvement is common in the state and can be helpful when drafting clear terms.
You should receive a written receipt for any deposit you deliver. The receipt should show the amount, date received, who holds the funds, and the escrow account details. Keep copies of your check or wire confirmation for your records.
Weston norms at a glance
Typical deposit size
A common guideline is 1% to 3% of the purchase price. In a competitive or luxury segment, buyers sometimes offer more, such as 3% to 5% or higher. Because Weston prices are well above the state median, the absolute dollar amount of a typical deposit will be higher even if the percentage is similar.
Who holds the funds
Deposits are often held by the listing broker or the buyer’s broker in a trust account. In some cases, the buyer’s or seller’s attorney holds the deposit in escrow. A title or escrow company is another option. Choose an established holder and get a written receipt right away.
When you pay
The deposit is usually delivered with the signed offer or within a short time named in the contract, often 24 to 72 hours. Your offer should state the deadline and where the funds will be deposited. Have funds ready so you can meet the timeline.
Contingencies and refunds
Common contingencies
Typical contingencies include home inspection, financing or mortgage approval, appraisal, title review, and approvals needed for condos or co-ops. Some buyers also include a contingency for the sale of their current home.
When deposits are refundable
If you cancel within a valid contingency period and follow the notice rules in the contract, your deposit is ordinarily refundable. Timing matters. You must act within the stated deadlines and in the way the contract requires.
Liquidated damages and disputes
Some contracts include a liquidated damages clause that may let the seller keep the deposit if the buyer defaults. Whether that clause applies depends on the exact wording and the facts of the case. If there is a dispute, the escrow holder will often require a written release signed by both parties, or a court order, before releasing funds.
What to put in your offer
Deposit terms to include
- The exact dollar amount of the deposit and your payment method.
- Where the funds will be held and by whom, including the type of escrow or trust account.
- The deadline for delivery. Be precise about the date and time.
Refund conditions and process
- List contingencies and the time periods for each.
- Explain how to deliver a termination notice if you need to use a contingency.
- State the dispute process for escrowed funds, such as mutual written release, arbitration, or court action.
Remedies for default
- Clarify whether the deposit becomes the seller’s liquidated damages if the buyer defaults.
- Confirm any limits or conditions on remedies as allowed by law.
How to protect your deposit
- Prepare funds in advance so you can deliver on time. Confirm acceptable forms, such as a certified check or a wire to escrow, before you sign.
- Verify wiring instructions by calling a known phone number for the escrow holder. Wire fraud is real, so never rely only on email.
- Put everything in writing. Get a written receipt and keep copies of the check, wire confirmation, and escrow deposit slip.
- Track your contingency deadlines in a calendar. Send any termination or extension requests in writing before the deadline.
- Ask your agent for current Weston norms. You want to be competitive, but you should not take on more risk than you understand.
- Review any liquidated damages clause and escrow language with your attorney before you sign.
Competing in Weston
Larger deposits
In multiple-offer situations, a higher deposit can help your offer stand out. Sellers may see it as a sign of commitment and financial strength. Balance that strategy with your need for protections.
Waiving contingencies
Some buyers waive or shorten contingencies to compete. This can speed up the process but raises risk. If you waive inspection or financing protections and later withdraw, your deposit may be at risk under the contract.
A balanced approach
You can strengthen your offer without giving up essential protections. Consider a deposit at the higher end of the normal range along with clear contingency timelines. Work with your agent and attorney to choose the right mix for the property and your goals.
Real-world examples
- Example A, typical: You offer 2% on a $1,000,000 home and deposit $20,000 into the listing broker’s trust account at acceptance. You keep a 10-day inspection and 30-day financing contingency. Minor issues come up, you proceed, financing is approved, and your deposit is credited at closing.
- Example B, competitive: You offer 1% but waive inspection and shorten the financing contingency to 21 days. The seller accepts due to fewer contingencies. If financing fails after the deadline, your deposit may be at risk.
- Example C, contested refund: You terminate within the inspection period, but the seller disputes the refund. Your attorney requests a written release. If there is no agreement, the escrow holder may require a mutual release or a court resolution before releasing funds.
Step-by-step checklist for Weston buyers
- Before you offer
- Ask your agent about current deposit norms for your price point in Weston.
- Decide on a deposit amount and whether to adjust it for competition.
- Line up funds and confirm the escrow holder’s acceptable payment method.
- In your offer
- State the deposit amount, deadline, and escrow holder.
- List contingencies, timelines, and clear notice procedures.
- Address remedies, including any liquidated damages clause.
- After acceptance
- Deliver the deposit on time and get a written receipt.
- Store your check image or wire confirmation and escrow instructions.
- Track all contingency deadlines and send any notices in writing.
- If things change
- If you need to cancel under a contingency, act before the deadline and follow the contract steps.
- If a dispute arises, seek advice from your agent and a real estate attorney.
Local resources to consult
Massachusetts transactions often use standard forms that include deposit and escrow instructions. The Massachusetts Association of REALTORS provides common forms used statewide. The Massachusetts Division of Professional Licensure oversees broker trust accounts and licensing. Mass.gov offers consumer guidance on buying a home. You can also consult experienced Weston real estate attorneys and local title companies for escrow practices and dispute procedures.
The bottom line
Earnest money in Massachusetts is straightforward when the contract is clear and you follow the timelines. In Weston, absolute deposit amounts tend to be higher due to price points, but the fundamentals remain the same. Set the right deposit, protect yourself with clear contingencies, and document every step. With the right strategy, your deposit supports your offer without adding unnecessary risk.
If you want a calm, well-structured path from offer to closing, let’s talk through your deposit strategy, contingency timelines, and escrow plan before you write. When you are ready to explore homes or craft a competitive offer in Weston, connect with Jennifer Fish to Book an Appointment.
FAQs
What is earnest money in Massachusetts?
- It is a good-faith deposit you make after an accepted offer. It shows commitment and is credited to your down payment and closing costs at closing.
How much earnest money is typical in Weston?
- A common range is 1% to 3% of the purchase price. In competitive or luxury cases, buyers sometimes offer more. Confirm current norms with your agent.
Who should hold my deposit in escrow?
- It is commonly held by the listing or buyer’s broker, an attorney, or a title company. Choose a regulated holder and get a written receipt immediately.
When do I pay the deposit on a Weston home?
- Usually with the signed offer or within 24 to 72 hours as stated in the contract. Your offer should specify the deadline and escrow holder.
When is my earnest money refundable in Massachusetts?
- If you cancel within a valid contingency period and follow notice rules, it is typically refundable. Missing deadlines can put your deposit at risk.
What happens if I waive contingencies in a competitive offer?
- Waiving protections can strengthen your offer but increases risk. If a problem arises later, you may risk losing your deposit under the contract terms.
What if the seller refuses to release my deposit?
- Ask for a written mutual release and consult a real estate attorney. The escrow holder may require a signed release or a court order to disburse funds.
How do I avoid wire fraud when sending a deposit?
- Verify wiring instructions by calling a known, trusted phone number for the escrow holder. Do not rely only on email for wire details.
