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Step 3
Earnest Money Deposit
Your initial deposit after offer acceptance
The earnest money deposit shows the seller you're serious about purchasing their home. This initial deposit is typically $1,000 and is due within 24-48 hours of offer acceptance.
What You Need to Know
- •Amount: Typically $1,000 in Massachusetts
- •Timing: Due within 24-48 hours of offer acceptance
- •Where it goes: Held in escrow by the listing broker
- •Protection: Returned to you if a contingency isn't met
Where to Send Your Deposit
The deposit is typically made to:
- 1The listing broker's escrow account – Most common
- 2Your closing attorney's IOLTA account – Less common
- 3The seller's attorney's escrow account – Less common
Payment Methods
Bank Check
Most commonly accepted
Certified Check
Guaranteed funds
Wire Transfer
For larger amounts
Wire Fraud Alert
Wire fraud is increasingly common in real estate. Scammers hack email accounts and send fake wiring instructions. Always verify wire instructions by phone using a number you know is legitimate—never use the number in the email.
Your bank may require 24-48 hours notice for large wire transfers, so plan ahead.
What Happens to Your Deposit?
Your earnest money is held in escrow (not given to the seller) until closing. At closing, it's applied to your down payment and closing costs. If the deal falls through due to a valid contingency, you get it back. If you breach the contract without a valid reason, the seller may keep it.
A Larger Deposit Comes Later
You'll make a second, larger deposit when you sign the Purchase & Sale Agreement (typically 5% of the purchase price total, minus this initial $1,000). We'll cover that in Step 6.