Buying in Cedar Park and wondering how much earnest money you need to put down in Texas? You are not alone. The deposit and the option period can feel confusing, especially when you are moving fast in a competitive market. In this guide, you will learn exactly what earnest money is, how the Texas option period works, what timelines to expect, how much to budget in Cedar Park, and how to protect your funds. Let’s dive in.
Earnest money is a good faith deposit you make with your offer to show the seller you are serious. If you close, it is usually credited to your down payment or closing costs. It helps secure the seller’s agreement to mark the home as under contract while you work through inspections and contingencies.
Texas contracts also use an option period. This is a negotiated window of time when you can terminate for any reason. To get that right, you pay an option fee to the seller or the seller’s title company. The option fee is separate from earnest money and is commonly smaller. It is generally non-refundable.
Under the standard Texas form, the TREC One-to-Four Family Residential Contract (Resale), the contract spells out where you write in the earnest money amount, the option fee, who holds each, and the deadlines. Earnest money shows commitment. The option fee buys you flexibility to walk away during the option period.
Earnest money is negotiated. What you offer depends on price, how competitive the listing is, your loan type, and seller preferences. In many Texas markets, a modest offer may include $1,000 to $3,000 of earnest money. Many buyers aim for about 1 percent of the purchase price. In hotter conditions, some buyers offer 2 to 3 percent or choose a larger flat amount to strengthen the offer.
The option fee in Texas often falls between $100 and $500. That can rise if you want a longer option period or if the listing is highly competitive.
Cedar Park sits inside the Austin metro, which has historically run more competitive than many parts of the state. In stronger seller markets, that can push earnest money and option fees higher than rural Texas norms. Conditions change month to month, so it pays to ask your agent for current local benchmarks the week you write your offer.
Here are simple, illustrative examples to help you plan:
Your final numbers will be tailored to the home, the competition, and what you and the seller agree to in writing.
When you map out funds for a Cedar Park purchase, think in three buckets:
Your contract sets the deadlines. In Texas, buyers typically deliver earnest money and the option fee within a short window after the contract becomes effective, often within 1 to 3 days. The exact due dates are written into your signed contract, so read those timelines closely and set reminders.
Earnest money is usually deposited with the title company or an agreed escrow agent named in the contract. The escrow holder issues a receipt and tracks your funds. Always request written confirmation showing how much was received and on what date.
Most title companies accept cashier’s checks, personal checks, or wires. Some also offer electronic payment options. If you plan to wire funds, follow strict verification steps to avoid fraud.
Wire fraud targets real estate transactions, including earnest money. Use these safeguards:
Outcomes always depend on the contract you sign. Under typical Texas practice, here is what often happens in key situations.
If you deliver written termination during the option period, the option fee is generally non-refundable and is kept by the seller. Your earnest money is typically returned to you per the contract’s provisions.
If you end the contract under a permitted contingency, such as financing, appraisal, or title, and you do so within the deadline, your earnest money is generally returned to you. Timing and written notices matter, so watch those dates closely.
If you fail to close after your right to terminate has expired, the seller’s remedies are defined by the contract. One common remedy is for the seller to keep the earnest money as liquidated damages if the contract provides that choice. Other contractual remedies may exist based on the form and any addenda. The escrow holder may hold funds until both parties agree or a resolution process is completed.
If the seller cannot or will not perform as agreed, you typically can seek the return of your earnest money and other remedies provided in the contract.
If your loan is denied or the appraisal comes in low, your options depend on the financing or appraisal terms in your contract. You may be able to terminate within the allowed period and recover your earnest money. Buyers and sellers sometimes renegotiate price, adjust loan terms, or bring additional cash to close.
In multiple-offer situations, buyers sometimes raise earnest money, shorten the option period, or adjust contingencies to stand out. These moves can help, but they increase risk. Weigh the tradeoffs with your agent and focus on terms you are comfortable delivering.
Use this quick list when you are ready to write an offer:
When you understand how earnest money and the option period work, you can craft stronger, safer offers in Cedar Park that protect your budget and still appeal to sellers. If you want help building a precise plan for your next offer, connect with a local advisor who lives this process every day.
Ready to plan your Cedar Park purchase? Schedule a Strategy Session with Courtney Unangst for step-by-step guidance, current local norms, and a negotiation plan tailored to your goals.
We pride ourselves in providing personalized solutions that bring our clients closer to their dream properties and enhance their long-term wealth. Contact us today to find out how we can be of assistance to you!