Yes, you can often get your earnest money back in Texas if you back out, but only when the contract gives you a right to terminate and you use it on time. Under the standard TREC resale contract, canceling during the option period, after a failed financing approval, or under another written termination right gets your earnest money refunded. Backing out without a contract right can put you in default, and the seller may keep it.
Brock Bremmer | U.S. Air Force Reserves Veteran | Real Estate Agent | eXp Realty | San Antonio Metro Area
Home Buyer Specialist
Also see: The Texas Option Period | First-Time Buyer Guide | HOA Resale Certificates
What Is Earnest Money in a Texas Home Purchase?
Earnest money is the deposit that shows the seller you’re serious. In the TREC One to Four Family Residential Contract (Resale), TREC No. 20-19, effective July 1, 2026, paragraph 5A says you deliver the earnest money and option fee to the escrow agent (usually the title company) within 3 days after the effective date. If that last day falls on a weekend or legal holiday, the deadline moves to the next business day.
At closing, paragraph 18B applies the earnest money first to your cash down payment, then to your closing costs. Any excess comes back to you. That matters for VA buyers with no down payment, since the deposit goes toward closing costs or is refunded.
The contract has no standard deposit amount. It’s negotiated. Ask your agent what’s typical for the price point and the market right now.
When Do You Get Your Earnest Money Back?
The resale contract and its common addenda refund your earnest money in these situations:
| Situation | Where It Comes From | Deadline |
| You terminate during the option period | Contract ¶5B | By 5:00 p.m. local time on the last option day |
| You can’t get loan approval (if the box is checked) | Financing Addendum ¶2A | Within the days written in the addendum, with the lender’s letter |
| The home doesn’t meet the lender’s appraisal or other property requirements | Financing Addendum ¶2B | On or before the 3rd day before closing, with the lender’s letter |
| A VA or FHA value comes in below the price | Financing Addendum ¶4 | The 3-day rule in ¶2B doesn’t apply |
| Seller’s Disclosure Notice wasn’t delivered before you signed | Contract ¶7B | Up to closing if never delivered, or within 7 days after you receive it |
| Title or survey objections aren’t cured | Contract ¶6D | Within 5 days after the seller’s 15-day cure period ends |
| Lender-required repairs exceed 5% of the price, or no one agrees to pay | Contract ¶7E | Before closing |
| The home is damaged and not restored by closing | Contract ¶14 | By closing |
| The seller defaults | Contract ¶15 | Before closing |
An HOA addendum can add another right to terminate after you receive the subdivision documents. Here’s how the HOA resale certificate deadline works.
What Happens to the Option Fee?
The option fee and the earnest money are handled differently. Under paragraph 5B, if you terminate during the option period, the option fee goes to the seller and the earnest money comes back to you. If you close, the option fee is credited toward the sales price. If you don’t pay the option fee on time, paragraph 5D says you lose the unrestricted right to terminate. For more, see how long your option period should be.
When Can the Seller Keep Your Earnest Money?
Under paragraph 15, if you fail to comply with the contract, you’re in default. The seller can then either enforce the contract or terminate it and keep the earnest money as liquidated damages, which releases both sides.
Common ways buyers lose earnest money:
- Missing a deadline: Paragraph 5E says time is of the essence. One day late on an option notice can cost you the refund.
- Waiving financing protection: If the financing addendum isn’t attached or the Buyer Approval box isn’t checked, a loan denial may not be a refundable exit.
- Changing your mind after the option period: “Cold feet” isn’t a termination right on its own.
- Not delivering the deposit: Under paragraph 5C, if you don’t deliver the earnest money on time, the seller may terminate the contract before you deliver it.
How Do You Actually Get Your Earnest Money Released?
- Give written notice: Send the termination on time, usually with the TREC Notice of Buyer’s Termination of Contract, and check the box for the paragraph you’re relying on.
- Sign the release: Under paragraph 18C, either side or the escrow agent sends a release of earnest money for both parties to sign.
- Make a written demand if needed: If the other party won’t sign, you can make a written demand to the escrow agent. If the other party doesn’t object in writing within 15 days, the escrow agent may release the funds, minus unpaid expenses.
- Know the 7-day rule: Under paragraph 18D, a party who wrongfully refuses to sign an acceptable release within 7 days of the request can owe damages, the earnest money, reasonable attorney’s fees, and court costs.
- Mediate disputes: Paragraph 16 sends unresolved disputes to mediation, with costs split equally.
The escrow agent won’t decide who’s right. For a real dispute, talk to a Texas real estate attorney.
Is Earnest Money Different on a New Build?
Often, yes. Many builders in San Antonio, New Braunfels, and Boerne use their own contracts. They may call the deposit something else, ask for separate design or option deposits, and limit refunds. Some have no option period at all. Before you sign, ask which deposits are refundable, under what conditions, and by what date. Then get the answers in writing.
Watch The Truth About Making Offers on New Construction Homes in San Antonio, and read quick move-in vs building.
Frequently Asked Questions: Earnest Money in Texas
Do you get earnest money back if you back out during the option period in Texas?
Yes. Under paragraph 5B of the TREC resale contract, if you give notice of termination by 5:00 p.m. local time on the last day of the option period, the earnest money is refunded. The option fee goes to the seller.
How long does it take to get earnest money back in Texas?
It’s fastest when both sides sign a release. If one side won’t sign, the TREC contract lets the other make a written demand. The escrow agent may release the funds if no written objection arrives within 15 days.
Ready to Protect Your Earnest Money?
Brock Bremmer with eXp Realty is a U.S. Air Force Reserves veteran who has helped buyers and sellers close 120+ homes across the San Antonio metro. He helps buyers track contract deadlines, protect their earnest money, and compare resale and builder contracts in San Antonio, New Braunfels, and Boerne.
- 📞 Call or text: 210-501-5088
- 📧 Email: [email protected]
- 📅 Schedule a free consultation
Also see: The Texas Seller’s Disclosure | Do You Need a New Survey? | Who Pays for Title Insurance in Texas
Sources: TREC One to Four Family Residential Contract (Resale), TREC No. 20-19, effective July 1, 2026 (¶5, 6, 7, 14, 15, 16, 18); TREC Third Party Financing Addendum, TREC No. 40-11 (¶2A, 2B, 4); TREC Notice of Buyer’s Termination of Contract; TREC contract forms and effective dates.