This section of the Massachusetts Offer to Purchase explains who holds the deposit—sometimes referred to as the “earnest money”—and under what conditions.
In Plain English:
When the Buyer submits an Offer, they typically include an initial deposit. That money is not given directly to the Seller—it’s held “in escrow” by a neutral party, known as the escrow agent.
This paragraph explains:
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Who is holding the deposit (often a real estate broker or attorney)
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That the deposit is held safely and separately.
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What happens if the Buyer and Seller disagree about who should receive the deposit.
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That the escrow agent is not liable for disputes between the Buyer and Seller and cannot be forced into a lawsuit simply because they are holding the funds.
If a dispute arises, the escrow agent will keep the funds until they receive:
1. Written instructions from both parties, or
2. A court order
This ensures that the money is handled fairly and securely during the transaction.
Attorney's Note:
As a real estate attorney in Massachusetts, I often explain to clients that the escrow deposit is a show of good faith that binds the transaction. It comes with responsibilities for the escrow agent.
The escrow agent is usually the Listing Broker, but can also be a closing attorney or third party. This section gives that agent legal protection so they can do their job without fear of getting dragged into disputes.
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If you’re a Buyer or Seller, make sure you know:
- Who the escrow agent is
- Where the deposit is being held
- What will happen if there’s a disagreement
And if you ever feel uncertain, speak to your real estate lawyer before releasing or disputing funds.
Disclaimer: The information provided in this [video/website] is for general informational purposes only, and does not constitute legal advice. You should not rely on this information as a substitute for professional legal counsel. Consult with a qualified attorney for advice regarding your specific legal situation