Earnest Money in MA: What’s Standard in Arlington

Making an offer in Arlington and wondering how much earnest money to put down? You want to show sellers you are serious without putting more at risk than you need to. The right number depends on Massachusetts norms, Arlington’s competitive market, and the protections in your contract. In this guide, you will learn what earnest money is, what’s typical in Arlington, who holds it, how contingencies protect you, and how to choose an amount that fits your strategy. Let’s dive in.

Earnest money in Massachusetts

Earnest money is a good‑faith deposit you include with an accepted offer. It signals commitment to the seller and is credited toward your purchase at closing. It is not an extra fee. It simply reduces the cash you need to bring to closing.

Your deposit is separate from your down payment and closing costs. Think of it as an early slice of your total funds. If the deal closes, it appears as a credit on your closing statement.

Depending on the contract, your deposit can be refundable if you terminate under a valid contingency, or it can be forfeited if you default and your agreement allows the seller to keep it.

What’s standard in Arlington

In many Massachusetts transactions, a common baseline is about 1% to 3% of the purchase price for standard, non‑competitive offers. In multiple‑offer situations, buyers sometimes increase to 2% to 5% or more to stand out.

Arlington is a desirable close‑in suburb within Greater Boston. In neutral conditions, 1% to 2% often works. For condos near transit or move‑in‑ready single‑family homes that attract multiple bids, buyers frequently lean toward the upper end, roughly 2% to 4%, to show strength.

Choose a number that balances confidence and risk tolerance. A higher deposit can help your offer compete, but it also increases funds at risk if you default and the seller is allowed to retain the deposit.

Who holds it and when

In Massachusetts, deposits are typically held in an escrow or trust account by a listing broker, a buyer’s or seller’s attorney, or a closing or title company. Attorneys and brokers must follow strict rules for handling client funds, including prompt deposit and no commingling with operating accounts.

Expect to deliver your deposit shortly after acceptance, often within 24 to 72 hours, as specified in your offer or the Purchase and Sale agreement. You will see the account holder and terms in your contract documents.

You can deliver funds by certified or cashier’s check or by wire transfer. Many attorneys and title companies prefer wires for speed. Always verify wire instructions by phone with a known, trusted number to avoid fraud.

Contingencies that protect your deposit

Contingencies outline the conditions that must be met for you to proceed. If you terminate within the agreed timeframes using a valid contingency, you are typically entitled to a return of your deposit.

Inspection contingency

Buyers often complete home inspections within 5 to 10 business days of acceptance. If findings are not acceptable, you can negotiate repairs or credits, or you can terminate within the inspection window and request your deposit back under the contract terms.

Mortgage contingency

Financing contingencies commonly run 30 to 45 days, depending on the loan. If you cannot obtain a commitment despite good‑faith efforts and you give proper notice within the deadline, your deposit is typically returned.

Title and condo document review

For condominiums, you may review condo documents and financials. Title review applies to all properties. If unresolved issues arise and you follow your contract’s notice procedures, you can protect your deposit.

Follow the notice rules

Your rights depend on meeting written notice requirements and deadlines. If you miss a timeline or do not provide notice correctly, you may lose protections tied to that contingency.

Waiving contingencies

Some buyers waive contingencies to strengthen offers in competitive situations. This can increase risk to your deposit. If you are financing, check lender requirements before waiving protections, since lenders usually require an appraisal and defined loan conditions.

If the deal falls through

If you terminate under a valid contingency and within the agreed window, the deposit is normally returned. If you default without a protective contingency, the seller may be entitled to the deposit if the contract has an enforceable liquidated‑damages clause.

These clauses are common in Massachusetts and typically make the deposit the seller’s exclusive remedy if you default. If such a clause is absent, a seller could pursue additional damages or specific performance. Many disputes are worked out by brokers and attorneys before litigation, but court action is possible for larger or contested deposits.

Offer strategy for Arlington buyers

Get fully pre‑approved and have proof of funds ready. Sellers expect strong documentation in Greater Boston.
Choose a deposit aligned with market conditions and your comfort level. In a balanced setting, 1% can work. In a multiple‑offer scenario, consider 2% to 3% or more if needed to compete.
Keep key protections. Right‑sized inspection and financing contingencies can preserve your deposit while still presenting a strong offer.
Be precise with timelines. Shorter inspection windows can appeal to sellers, but only choose timeframes you can meet.
Confirm escrow details in writing. Know exactly who holds the funds and the trust account where they sit.
Guard against wire fraud. Verify instructions by phone using a known number and keep a record of confirmations.
Document everything. Keep copies of checks or wire confirmations and signed contract pages.

A simple timeline to expect

Offer accepted, deposit due. Plan to send your earnest money within 24 to 72 hours of acceptance unless your offer states otherwise.
Inspection period. Complete inspections within the agreed window, often 5 to 10 business days, and decide whether to proceed, negotiate, or terminate within that timeframe.
Mortgage commitment date. Work with your lender toward a commitment within the contract’s financing period, commonly 30 to 45 days.
Pre‑closing. Finalize title, condo documents if applicable, and any outstanding conditions. Your deposit will be credited on your closing statement.

How much should you put down?

Use three lenses to decide your deposit amount:

Market strength. If a property is likely to attract multiple bids, consider a deposit closer to the upper typical range to show commitment.
Protection and timelines. Strong contingencies and clear deadlines can justify a higher deposit for some buyers. If you intend to waive protections, weigh the added deposit risk carefully.
Personal risk tolerance. Only commit what you are comfortable placing in escrow. Your financing profile and cash on hand matter.

A thoughtful deposit can help your offer stand out in Arlington without exposing you to unnecessary risk. An experienced local advisor and a Massachusetts real‑estate attorney can help you structure terms that fit both your goals and current market norms.

Ready to plan your offer and set the right deposit for Arlington? Reach out to discuss a strategy that balances strength and protection for your situation. Connect with David Gordon for fiduciary‑caliber guidance.

FAQs

What is earnest money in Massachusetts?

It is a good‑faith deposit credited to your purchase at closing that shows serious intent and can be refundable under valid contingencies.

How much earnest money is typical in Arlington, MA?

Many offers fall in the 1% to 3% range, with 2% to 5% or more in competitive multiple‑offer situations depending on property and market conditions.

Who holds earnest money in Massachusetts transactions?

Deposits are commonly held in an escrow or trust account by a listing broker, an attorney, or a closing or title company.

When do you pay the earnest money in MA?

Buyers usually deliver the deposit within 24 to 72 hours after offer acceptance, as specified in the offer or Purchase and Sale agreement.

How do contingencies protect my deposit in MA?

If you terminate within the agreed timelines for inspection, financing, title, or condo document review, you are typically entitled to a deposit return.