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    What is Earnest Money? Why it Protects the Transaction

    January 24, 2021
    By Maggie Li
    What is Earnest Money? Why it Protects the Transaction

    What is Earnest Money? Why it Protects the Transaction

    When you make an offer on a home in Brookline, you'll need to provide an 'Earnest Money' check. This is your 'good faith' deposit.

    How Much is Enough?

    In Massachusetts, there are usually two deposits:

    1. With the Offer: Typically $1,000.
    2. With the Purchase and Sale (P&S): Usually brings the total deposit up to 5% of the purchase price.

    Where Does the Money Go?

    It is held in an escrow account by the listing agency or an attorney. It is not a fee; it is a credit toward your down payment at closing.

    Warning: If you back out of a deal after signing the P&S without a valid contingency reason, the seller may be entitled to keep your entire 5% deposit.
    Confused about the financial flow of a deal? I can provide a step-by-step breakdown of where every dollar goes.