William: A dual agent should follow your directions. That's what agents do. Now, your story doesn't quite tell us what we need to know. Did you sign the contract? Did the seller accept it? If so, you are under contract with the terms that were written.
In NJ, there is a 3-day attorney review. During that time, an attorney that you hire and pay for can give you advice as to the legal implications of the contract. He can, if it seems desirable, reject the contract. Usually, if there is just some language and /or details that need changing, he can also state that it would be acceptable if the changes were made. The seller has the same right of review and the attorneys can negotiate the changes back and forth until both parties are satisfied.
If you did sign but did not consult an attorney for 3 days, you have a contract that you have agreed to by default and you should do what the contract says you promised to do. If you don't, the seller can void the contract. If he doesn't, you may go to closing without having done what you should. The total down payment will have to be made than and if the escrow is short of what it should have in it, you will have to make it up at the closing table.
Escrow. The word means putting funds in an account that holds them so no one can get them until one of three things happen. They are: that they come out at closing to complete the deal, they get returned to you or split up between the parties by agreement or if the parties do not complete and do not agree, by order of a court. Getting the court to decide who gets what costs money.
How much should the deposit be that will be held in escrow? There is no magic formula. The seller wants to be sure that it is not so small that you walk away and leave the deposit. Technically, he can't get the money without a court order, even if you do walk, and it will cost him to get it.
The decision about how much to put up as a deposit is really up to you. The seller, if dissatisfied, can always ask for more.
Non-interest bearing accounts are very common. Usually, the closing is not too far away in timing. Keeping the account in an interest bearing account can get complicated if the organization has more than one deposit in the account or more than one account. These days, with low rates of interest in saving accounts, most escrow holders just set up non-interest-bearing accounts for convenience sake.
Lots of luck with your deal.