The deposit should be held by an independent third party.
What do you mean by "his agents escrow"? Is it in his agents account?
What state are you in?
If you do not have an agent, do you have an attorney guiding you?
What is the sales price? $3k seems low.

"The deposit should be held by an independent third party."

In many places it is held by the sellers broker.

In a FSBO it can be an issue since the seller has no one to hold the earnest money.

The buyer wants the money safely held also.

The sellers attorney can hold it if you have one involved.

Earnest money is definitely regional, so $3k may be low, perfect, or high.

We used a flat fee listing when we sold last year. The buyers agent wanted to put the money into an account at their agency. We insisted it go to our attorney.

Legally, it doesn't matter much. If you end up in court, the contract is going to determine the outcome.

Practically, earnest money "seems" important, but if there are contingencies in the contract (inspection, repair, finance etc) there will be plenty of legal ways for the buyer to get out of the deal.

I'd say you have gotten yourself into a less than ideal situation, but not one that should be a deal breaker. The most likely situation is that the sale goes through fine and you get your money. The next most likely is that there is some problem with the inspection or financing, in which case, they get their earnest money back anyway. The least likely outcome is the the buyer backs out without any cause and contests the earnest money and is willing to fight you in court for it. At that point, you would have to decide if 3k was worth a protracted legal battle.

I have an attorney and he, apparently, let this slip by. The seller has breached the contract. I guess I,m out of luck- oh well, I have another buyer. Thanks, Paul