What is earnest money?

Earnest money is a good-faith deposit you make when you sign a purchase contract on a home. It signals to the seller that you're serious — and it's part of how Texas real estate contracts are structured.

How much is earnest money in Texas?

The standard is 1% of the purchase price, but there's no law setting a fixed amount. On a $280,000 home, that's $2,800. In competitive markets, some buyers offer more to signal stronger intent.

Where does earnest money go?

In Texas, earnest money is held by the title company (the escrow agent) — not by the seller or agent. It sits in escrow until closing, at which point it's applied toward your down payment or closing costs.

Can you get earnest money back?

Yes — under the right circumstances. Texas contracts include an option period (typically 5–10 days), during which you can walk away for any reason and receive your earnest money back. You pay a separate, smaller option fee for this right. Outside the option period, your earnest money is at risk if you back out without a valid contract contingency — like financing falling through or a title defect.

If you want to know how earnest money, option money, and other upfront costs stack together before you write an offer, run the numbers in the Closing Cost Estimator.

• During the option period: You get earnest money back for any reason
• Financing contingency triggered: You get earnest money back if your loan falls through
• Title issues: You get earnest money back if title cannot be cleared
• You simply changed your mind after the option period: Earnest money is forfeit