Have questions about earnest money and how it works in Texas? If you’re preparing to buy in Havenwood at Hunters Crossing in Comal County, it’s smart to know how this deposit protects you and what can put it at risk. Buying here often moves quickly, and a clear plan helps you write a strong offer without stress. In this guide, you’ll learn what earnest money is, typical local amounts, key deadlines, refund rules, and practical steps to protect your deposit. Let’s dive in.
Earnest money basics in Texas
Earnest money is your good‑faith deposit that shows a seller you are serious about buying their home. Once your offer is accepted, you deliver the deposit to the escrow holder named in the contract. If you close, the escrow holder credits it to your down payment or closing costs.
In Texas, the common contract for resale homes includes specific terms for the earnest money amount, who holds it, and when it must be delivered. The escrow holder, usually a title company, releases funds only according to the contract, a mutual release signed by both parties, or a court order.
Typical amounts in Havenwood and Comal County
There is no single required amount. A common benchmark in many Texas markets is 1 to 2 percent of the purchase price. In practice, you may see dollar amounts from about $1,000 to several thousand dollars on typical homes. In competitive Hill Country neighborhoods around New Braunfels, buyers sometimes offer more to stand out.
What you offer depends on:
- Local competition and days on market
- Your price point and financing type
- Seller expectations and negotiations
Option fee vs earnest money
Texas also uses a separate option fee. You pay this directly to the seller for the right to terminate for any reason during the option period. It is usually smaller, often around $100 to $500 regionally. The option fee is typically nonrefundable. Earnest money is held in escrow and can be refundable if you terminate within your contract rights.
Key deadlines and delivery
When you pay it
Most contracts require you to deliver earnest money within 1 to 3 business days after the effective date. Your contract will name the escrow holder. Deliver on time and get a written receipt or escrow acknowledgment.
During your option period, which is negotiated in the contract and commonly runs 5 to 10 days, you can terminate for any reason if you paid the option fee. If you close, the earnest money is applied to your closing funds.
How to deliver
You can usually deliver by personal or certified check, wire transfer, or an approved electronic deposit. If you wire funds, call the title company at a verified number to confirm instructions. Do not rely on email instructions alone. Keep copies of all confirmations and receipts.
When you can get it back
You can typically receive your earnest money back if you terminate under the contract within the allowed timelines. Common refund scenarios include:
- Termination during the option period when the option fee was paid as agreed
- Termination under a valid financing contingency when you follow the notice requirements
- Title or survey objections that are not resolved within the contract timelines
- Appraisal outcomes that trigger your termination rights under the contract
- Seller default or breach of contract
When refunds are at risk
If you terminate after the option period without a contractual basis, you can lose your earnest money. Missing notice deadlines or failing to provide required documents can also put your refund at risk. Always track dates and send notices in writing per the contract.
What happens in a dispute
Escrow holders follow the contract. They typically hold funds until both parties sign a release or a court or agreed resolution instructs them to disburse. If a buyer defaults and the contract allows liquidated damages, the seller may seek to keep the earnest money. If liquidated damages are not selected, a seller could pursue other remedies through the legal process.
Confirm in writing who holds your deposit and how release requests are handled. If a dispute arises, contact your agent and the escrow holder right away and keep copies of all notices.
Real‑world examples
- Example A: You offer $420,000 with $5,000 earnest money and a $300 option fee for a 7‑day option period. Inspections are fine, financing is approved, you close on time. Your earnest money is credited to closing costs.
- Example B: You offer $360,000 with $3,000 earnest money and a $200 option fee. An inspection reveals major roof issues. You terminate during the option period. Your earnest money is refunded and the seller keeps the option fee.
- Example C: You offer $380,000 with $4,000 earnest money and a 5‑day option period. You delay inspections and miss the option deadline, then try to terminate. The seller contests and seeks to keep the deposit. The title company holds funds until there is a mutual release or legal direction.
- Example D: Your contract includes a financing contingency. Your loan is denied, and you timely deliver notice and required documentation. You terminate and receive your earnest money back.
Buyer checklist for Havenwood moves
Before you write the offer:
- Get a mortgage pre‑approval to support your financing timelines.
- Set an earnest money strategy. Decide between a flat amount or a percentage based on competitiveness and price.
- Decide your option period length. Budget for the option fee if you want the right to terminate for any reason during that time.
When preparing the contract:
- State the exact earnest money amount, the named escrow holder, and the delivery deadline.
- Confirm the option fee amount, who it is paid to, and the number of days for the option period.
- Review financing and appraisal timelines. Add any needed contingency language.
Once your offer is accepted:
- Deliver earnest money on time and secure a written receipt from the escrow holder.
- Pay the option fee and keep proof of payment.
- Calendar all deadlines. Set reminders a day or two before each one.
- If you need to terminate, send written notice as the contract requires and keep a copy.
Protect against fraud:
- Verify any wire instructions by calling the title company using a known phone number.
- Keep confirmations and receipts for all payments.
Local tips for Havenwood at Hunters Crossing
Havenwood and nearby New Braunfels neighborhoods can be competitive at certain price points. Strong offers often include clear timelines and promptly delivered deposits. Because norms can shift with the market, ask your local agent and the title company about current earnest money patterns before you submit an offer. A right‑sized deposit and a well‑planned option period can help you stand out while protecting your interests.
Ready to buy in Havenwood?
When you understand earnest money, you can write a confident offer and stay in control of your timelines. If you want local guidance tailored to Havenwood at Hunters Crossing and the wider New Braunfels area, reach out to a trusted neighborhood expert. Start the conversation with Diana Colbath for clear, step‑by‑step support from offer to closing.
FAQs
What is earnest money in a Texas home purchase?
- It is a good‑faith deposit you deliver after your offer is accepted, held in escrow, then credited to you at closing or refunded if you terminate under the contract.
How much earnest money is typical in Havenwood?
- Many buyers use 1 to 2 percent as a benchmark, with totals often ranging from about $1,000 to several thousand dollars depending on price and competition.
How fast do I need to deposit earnest money in Texas?
- Most contracts require delivery within 1 to 3 business days after the effective date to the named escrow holder, with a written receipt.
What is the difference between the option fee and earnest money?
- The option fee is paid to the seller for the right to terminate during the option period and is usually nonrefundable. Earnest money is held in escrow and may be refunded if you terminate per the contract.
When could I lose my earnest money in Comal County?
- You risk losing it if you miss deadlines or terminate after the option period without a contractual reason. Follow all notice and timing rules to protect your deposit.
