Earnest Money Explained For Irving Homebuyers

If you are getting ready to make an offer in Irving, you may be wondering how much earnest money to put down and what happens to it if the deal changes. You are not alone. Earnest money and Texas’s option fee can feel confusing at first, especially if you are relocating. In a few minutes, you will understand how both work in Irving, who holds your funds, typical local ranges, and the timelines that protect your deposit. Let’s dive in.

Earnest money vs. option fee in Texas

In Texas, the standard TREC contract separates earnest money from the option fee. Earnest money is a good‑faith deposit that shows you are serious about buying. It is typically credited to your purchase at closing. The contract spells out the amount, where it is held, and when it must be delivered. You can review the contract forms on the Texas Real Estate Commission’s page for TREC promulgated forms.

The option fee is different. You pay it to the seller in exchange for an unrestricted right to terminate the contract during a short “option period.” The option fee is usually non‑refundable. If you end the contract within the option period, you typically receive your earnest money back, but the seller keeps the option fee. For plain‑English guidance on these Texas practices, see Texas REALTORS consumer resources.

Typical Irving ranges and what sellers expect

Local practice varies by price point and competitiveness. There is no Texas legal minimum or formula for earnest money. Amounts are negotiable and shaped by the Irving submarket you are shopping in, including popular areas like Las Colinas.

Here are common ranges seen around Irving and Dallas County:

• Earnest money
  • Starter homes: often $1,000 to $3,000.
  • Mid‑price homes: several thousand dollars, commonly about 0.5% to 1% of the price.
  • Higher‑priced homes: 1% or more can be used to signal commitment.
• Option fee and option period
  • Option fee: often $100 to $500 for modest offers; in hot situations, some buyers offer $500 to $2,000 or more.
  • Option period length: commonly 3 to 10 days, with 5 to 7 days typical if inspections can be scheduled quickly.

In more competitive pockets like parts of Las Colinas or near corporate hubs and transit, sellers may look for stronger terms: higher earnest money, a larger option fee, and a shorter option period. In a balanced market, standard amounts usually work well.

Who holds your earnest money and how it works

In most Dallas County transactions, the title company named in your contract holds your earnest money in escrow. The agreement will list who holds the funds and when the deposit is due, often within a few days of the effective date.

• Acceptable holders include the title company or a designated escrow agent. In some cases, a broker’s escrow account may be used if permitted and agreed.
• Your funds are credited toward your purchase at closing. If the sale does not proceed, the contract governs how the deposit is released.
• Delivery methods and deadlines matter. Follow the contract instructions on wiring or checks and meet the stated timeline to avoid default. You can see how these instructions appear in the TREC contract forms.

If a deal ends: getting funds back

When you terminate within a valid contract right and on time, your earnest money is usually returned. Common paths to a refund include:

• You terminate in writing within the option period. The option fee is typically retained by the seller, but your earnest money is returned.
• You cannot obtain financing and you follow the contract’s notice and timing requirements in the financing paragraph.
• You have unresolved title or survey objections within the contract’s timelines, or you act within set windows for HOA documents or seller disclosures.

If you default without a contractual right, the seller may be entitled to keep the earnest money as liquidated damages if the contract allows. If there is a dispute about who should receive the deposit, the escrow holder will usually require a written mutual release signed by both parties or a court order before disbursing funds.

Protect your deposit with timelines and contingencies

Your best protections in Texas are built into the contract, but you must follow the deadlines exactly. Keep tight calendar discipline on these items:

• Option period. Pay the option fee and complete inspections quickly. If you decide not to proceed, send written termination before the deadline.
• Earnest money delivery. Deposit by the contract deadline to stay in good standing.
• Financing contingency. Provide any required notices and meet the loan approval timeline.
• Title and survey review. Submit written objections within the allowed window if needed.

Practical strategies to stay competitive while protecting your deposit:

• Choose a shorter option period instead of waiving it. Three to five days can keep your offer strong while preserving your right to terminate.
• Increase earnest money rather than giving up inspection protections. A higher deposit often signals seriousness to Irving sellers.
• Provide a strong lender preapproval and proof of funds with your offer. This reduces seller concerns about financing risk.
• Coordinate early with your inspector and lender so you can meet tight timelines.

For a helpful overview of how these protections work, check out Texas REALTORS consumer resources.

Offer playbook for Irving and Las Colinas

Here are example structures you can discuss with your agent. These are not rules, just common patterns in the area:

• First‑time buyer in a balanced Irving market

  • Earnest money: around $2,500.
  • Option fee and period: $200 for 5 days.
  • Financing: include a financing contingency with a 20‑day loan approval deadline and submit preapproval with the offer.

• Multiple‑offer home in Las Colinas

  • Earnest money: $5,000 or roughly 1% of price to stand out.
  • Option fee and period: $500 for 3 days, or some buyers may waive the option period to compete. If you value inspections, keep a short option period instead of waiving.
  • Documentation: include proof of funds for your down payment and a strong lender letter.

Your exact numbers should match your comfort level, the property, and current conditions. There is no one “right” amount in Texas.

Wire transfer safety

Wire fraud is a real risk. Protect yourself with simple steps:

• Only send funds to the escrow holder named in your contract.
• Before wiring, call the title company using a verified phone number. Confirm routing details by voice.
• Do not rely on email instructions alone. If anything looks off, stop and verify.

You will see similar cautions in guidance from TREC and industry groups. When in doubt, confirm by phone before you send money.

Ready to move with confidence in Irving?

Choosing the right earnest money and option strategy can make your offer cleaner and safer. If you want help tailoring the numbers and timelines to your specific Irving or Las Colinas target, reach out. Let’s connect — talk to Lesli about your property. Start the conversation with Lesli Ray Etzel.

FAQs

What is the difference between earnest money and the option fee in Texas?

• Earnest money is a good‑faith deposit applied to your purchase at closing. The option fee pays for an unrestricted right to terminate during the option period and is usually non‑refundable.

Who holds earnest money in an Irving home purchase?

• The title company or escrow agent named in your TREC contract usually holds the funds in escrow until closing or release.

Do I get my earnest money back if I terminate during the option period?

• Yes, in most cases. If you terminate in writing within the option period under the contract, your earnest money is typically returned. The seller usually keeps the option fee.

How much earnest money makes a strong offer in Las Colinas?

• There is no fixed amount. Larger deposits, such as several thousand dollars or about 1% of the price, can show commitment, but your overall terms and timelines matter too.

What happens if the appraisal or loan falls through?

• If you follow the financing and appraisal provisions in the contract and meet notice deadlines, you may be able to terminate and recover earnest money. Always track the timelines closely.

How long is a typical option period in Irving?

• Many local deals use 3 to 10 days, often 5 to 7 days if inspectors can be scheduled quickly. Shorter periods can strengthen your offer while preserving inspection rights.

What if the buyer and seller disagree about who gets the deposit?

• The escrow holder will usually require a written release signed by both parties or a court order before disbursing funds if there is a dispute.

Where can I read the actual Texas contract language?

• You can view the standard forms on the TREC promulgated forms page and find plain‑language guidance on Texas REALTORS consumer resources.