Patriot Nation, buyers ask me two questions more than any others the day they write an offer: "How much earnest money?" and "Can I get it back?" Both answers live in the contract rhythm that is uniquely Texas: earnest money up front, an option period for your homework, and an option fee for the privilege. Here is exactly how the money and the timing work.
Write the offer with the deposit math already done.
I will tell you the earnest money range that fits your market, price, and competition, and walk the option timeline so your money is protected the whole way.
Earnest money, the good-faith deposit
Earnest money is the deposit you put up when your offer is accepted, proving to the seller you are serious and not going to tie up their house on a whim. In the San Antonio area, a common target is about 1% of the purchase price, and it varies with the market: more in competitive situations, less in slower ones. The important part is what happens to it:
- It is held by a neutral third party, normally a title company, never by the seller or your agent.
- At closing, it is credited toward your purchase, applied to your down payment and costs, so it is not lost money, it is prepaid money.
- If the deal dies for a protected reason, it is refunded to you.
Rounded example, not a quote
On a $350,000 offer, 1% earnest money is $3,500. The seller's agent returns the accepted contract, you deliver the $3,500 to the title company within the contract's deadline, and it sits in escrow until closing, where it becomes part of your cash to close.
The amount is a negotiation point, and some sellers in hot markets ask for 2% or more. What matters most is meeting the contract deadline for delivering the deposit.
When is earnest money refundable?
This is the answer buyers actually need: refundable when you back out for a reason the contract protects, and not refundable when you back out for no protected reason. The big protected exits in Texas practice:
- Inside the option period: back out for almost any reason and keep your earnest money, losing only the option fee.
- A contingency the contract allows: financing falling through under a financing contingency, title problems, or appraisal issues, depending on your contract's terms.
- Seller breach: if the seller fails to deliver a contract obligation, you are protected.
The dedicated earnest money refund explainer and the how much earnest money answer cover the edge cases in detail.
The option period: your protected homework window
Nearly every Texas purchase contract includes an option period, typically 7 to 10 days, during which you can run inspections, check title, review the homeowner documents, and decide with full information. Inside that window you can terminate for essentially any reason and your earnest money comes home, with the seller keeping only the option fee. This is the buyer's safety net, and it is why we schedule the home inspection inside the option period, never after it. The option fee explainer goes deeper on the mechanics.
One calendar warning: the option period is measured in calendar days from the contract execution, and weekends and holidays count. Under TREC paragraph 5, your termination notice is due by 5:00 PM property-local time on the specified option-period day. A window that ends on a Sunday does not roll to Monday, so if your 10-day window ends on a Sunday and the inspection reveals something big on Saturday, you act that day. The payment-deposit provision's weekend extension applies to delivering payments, not to your termination deadline. Losing the window because of a calendar is the most expensive mistake in this whole process, and it is completely avoidable.
Here's a pearl for you: protect your deadline like it is money.
The option deadline is a hard wall. I keep the inspection, the title review, and the negotiation calendar in front of every buyer so the window works for you, not against you.
The option fee: the small price of the exit
The option fee is separate from earnest money. Under the current TREC One to Four Family Residential Contract, it is a negotiable sum, commonly a few hundred dollars, delivered to the escrow agent for the right to the option period. It is non-refundable if you terminate, but if the sale closes it is credited toward the purchase price at closing. Think of it as the price of the right to change your mind. Small when the alternative is losing earnest money, and it is the line on your estimate that confuses first-time buyers the most.
The whole rhythm in one picture
General Texas practice illustrated; your specific contract controls, so read and understand your own document.
The full offer-and-negotiation rhythm, including counteroffers and seller credits, lives in the offers and concessions guide, and if you are facing multiple offers, the multiple offer playbook is a must-read before you write.
Frequently Asked Questions
How much earnest money should I put down in Texas? Tap to expand
Is earnest money refundable in Texas? Tap to expand
What is the option period in Texas? Tap to expand
What is the option fee in Texas? Tap to expand
Who holds my earnest money in Texas? Tap to expand
Know your deadlines and your exits before you sign.
As your agent and loan officer, I build the earnest money amount, the option timeline, and the inspection calendar into every offer, so your deposit is protected and your confidence stays high.
About Patrick Kevin Fagan, REALTOR®
Patrick Kevin Fagan is a Texas Real Estate Sales Agent (#454749) with AXEN Realty LLC and a Senior Loan Officer (NMLS ID #877741) with NEXA Mortgage, LLC (NMLS #1660690). He brings 23+ years in mortgage lending and 19 years in real estate, serving homebuyers, homeowners, and sellers across Greater San Antonio and the Texas Hill Country.
Answered by Patrick Kevin Fagan
Texas Real Estate Sales Agent #454749, AXEN Realty LLC · Senior Loan Officer, NMLS ID #877741, NEXA Mortgage, LLC
Call or text: 210-317-6514
This article describes common Texas practice for education, not legal advice. Your actual contract terms control; read every deadline and have your agent walk you through the document you sign.
