Earnest Money In Massachusetts: What Buyers Should Know

Making an offer on a Foxborough home and wondering how much earnest money to put down? You are not alone. This good‑faith deposit can help your offer stand out, but it also carries risk if the deal falls apart. Understanding how it works in Massachusetts will help you move forward with confidence. In this guide, you will learn typical deposit amounts in Foxborough, how timing and contingencies protect you, and practical steps to avoid costly mistakes. Let’s dive in.

What earnest money is

Earnest money is a cash deposit you provide after the seller accepts your offer to show you are serious. It is sometimes called a good‑faith deposit. In Massachusetts, the deposit is referenced in the Purchase and Sale Agreement, often called the P&S, which controls how the money is held and when it is released.

Your deposit is not an extra fee. It is usually credited toward your down payment and closing costs at settlement. If everything goes smoothly, you will see it as a credit on your closing statement.

Foxborough deposit norms

Foxborough follows Greater Boston suburban norms. In balanced market conditions, deposits commonly range from 1% to 3% of the purchase price. In multiple‑offer situations or when buyers waive certain contingencies, deposits of 3% to 5% or more are used to signal strength.

Here are simple dollar examples:

• 1% on a $500,000 home is $5,000
• 2% on a $700,000 home is $14,000
• 3% on a $1,000,000 home is $30,000

Your strategy should reflect the property, the level of competition, and your comfort with risk. Local agents track current offer activity and can help you match your deposit to seller expectations.

Scenario examples

• First‑time buyer in a typical Foxborough sale: You include a 1% to 2% deposit with standard inspection and mortgage contingencies. This shows commitment while keeping your protections in place.
• Move‑up buyer in a multiple‑offer situation: You offer a 3% deposit and tighten contingency timelines to strengthen your position. You proceed only if you can meet the deadlines with your lender and inspector.
• Buyer waiving inspection or appraisal: You may combine a higher deposit with shortened timelines. This can win the home, but it raises your financial risk if the deal does not close.

Timing and escrow

Delivery window and methods

The P&S will set a time window for delivering your earnest money, often within 24 to 72 hours of acceptance. Follow the instructions exactly. Common delivery methods include a bank check payable to the named escrow holder or a wire transfer for larger deposits. If wiring funds, confirm instructions by phone using a trusted number to avoid wire fraud.

Who holds the funds

Massachusetts buyers often choose one of two options:

• A real estate broker’s client trust account
• An attorney’s escrow account

Both options are common. Brokers and attorneys must follow professional rules for holding client funds in trust accounts with proper records. The P&S will name the trustee. If you have a preference, include it in your offer and confirm it in writing.

Receipts and application at closing

Always get a written receipt with the amount, date, trustee, and property address. Save bank or wire confirmations. At closing, your deposit appears as a credit on your settlement statement and reduces the cash you need to bring.

Contingencies and refunds

Your deposit protection depends on the contingency language in your P&S and whether you meet each deadline and notice requirement. Contingencies are your main safety net.

Common protections

• Home inspection: During the inspection period, you can negotiate repairs or credits. If you cancel within the agreed timeline under this contingency, your deposit is typically refundable.
• Mortgage or financing: If you apply promptly and the lender declines within the contingency period, you can usually recover your deposit, provided you follow the notice rules.
• Title and clear title: If the seller cannot deliver clear title per the P&S, your deposit is generally returned.
• Appraisal: If an appraisal contingency is included and the value comes in low, you may be able to renegotiate or cancel per the contract terms.

The exact language in your P&S controls the outcome. Work with your agent and attorney to set firm dates and follow the notice procedures listed in the agreement.

When you can get it back

• A contingency is not satisfied within its deadline and you give proper written notice as the P&S requires.
• The seller materially breaches the contract, such as failing to deliver clear title or failing to close as agreed.

When the seller may keep it

• You breach the contract without a valid contingency to protect you. In that case, many P&S forms allow the seller to keep the deposit as liquidated damages. The P&S may limit remedies or allow other actions. Read your agreement closely and seek legal guidance before you make a decision that could cost you your deposit.

How disputes get resolved

Deposit disputes can be time‑consuming and expensive. Most are resolved through negotiation among the parties and their attorneys. Some P&S forms call for mediation or arbitration. If needed, a party may sue to determine who is entitled to the funds. Documentation and timely notices are critical to your position.

When to use higher deposits

A higher deposit can help in competitive Foxborough situations, but it should match your risk tolerance and the contingencies you keep.

Consider a higher deposit when:

• There are multiple offers and you want to signal strength and certainty.
• You are comfortable with shorter inspection or mortgage timelines and can meet them.
• You have strong financing or cash reserves that reduce the chance of default.

Be cautious about a higher deposit when:

• You need more time for inspection or for your lender.
• You rely on sale of your current home to close.
• You are uncertain about appraisal, title, or repairs, and you need the flexibility to cancel.

Smart buyer checklist

Pre‑offer

• Align deposit strategy with Foxborough comps and current competition.
• Decide who will hold the funds, broker or attorney, and get instructions in writing.

When making the offer

• State the exact deposit amount and the named trustee in the offer and P&S.
• Set clear contingency dates and times for inspection and mortgage commitment.
• Include response windows for inspection negotiations where appropriate.

After acceptance

• Deliver funds on time and request a dated written receipt.
• Track all deadlines on your calendar and set alerts for reminders.
• Stay in close contact with your lender to meet the mortgage timeline.
• Avoid waiving contingencies unless you accept the financial risk.

If issues arise

• Follow the P&S notice procedures exactly, including how and when to deliver notice.
• Save everything: the P&S, emails, receipts, inspection reports, and lender communications.
• Consult your attorney before taking any step that could forfeit your deposit.

Closing preparation

• Confirm that your deposit is credited on your settlement statement.
• Review final numbers early so there are no surprises on closing day.

Wire fraud safety

Wire fraud targets homebuyers during the deposit and closing stages. Protect yourself with simple steps:

• Never rely only on emailed wiring instructions.
• Call a trusted phone number for your attorney or broker to confirm details before sending funds.
• Verify the account number again with a second call if anything changes.
• Send a small test wire if time allows, then confirm receipt before sending the balance.

Local notes for Foxborough buyers

• Practices in Foxborough mirror Greater Boston suburbs, with most deposits in the 1% to 3% range in balanced markets and higher in hot segments.
• Many buyers use Massachusetts attorneys for escrow and closing coordination, which can streamline deposit handling and notices.
• Your closing will be documented on a settlement statement and recorded with the appropriate registry for Norfolk County after funding.

Final thoughts and next steps

Earnest money is a powerful part of your offer strategy. In Foxborough, the right deposit amount, paired with clear contingency timelines and precise notices, protects you while helping you compete. Focus on the P&S language, meet every deadline, and keep clean records. With the right plan, your deposit works for you from offer to closing.

If you want a tailored strategy for your situation, schedule a private consultation with Barrie Naji. We will help you align deposit amount, contingencies, and timing to match Foxborough market conditions and your goals.

FAQs

How much earnest money is typical in Foxborough, MA?

• In balanced conditions, many buyers put down 1% to 3% of the purchase price, with higher deposits used in multiple‑offer situations.

When is earnest money due after my offer is accepted?

• The P&S sets the deadline, commonly 24 to 72 hours after acceptance; deliver by the exact date and method stated in the agreement.

Who usually holds the earnest money in Massachusetts?

• Deposits are commonly held in a broker’s client trust account or an attorney’s escrow account, as named in the P&S.

Can I get my earnest money back if financing falls through?

• If you have a mortgage contingency and your lender declines within the contingency period, you can typically recover your deposit by giving proper notice.

What happens to the deposit if the seller breaches the contract?

• If the seller fails to meet contractual obligations, such as delivering clear title, you may be entitled to return of the deposit and other remedies per the P&S.

How do I protect against wire fraud when sending my deposit?

• Verify wiring instructions by phone using a trusted number for your attorney or broker, and never rely only on email for account details.