Thinking about making an offer on a home in Memorial? One of the first questions you’ll face is how much earnest money to put down and how to protect it. You want to stand out in a competitive market without taking on unnecessary risk. In this guide, you’ll learn what earnest money is, typical deposit amounts in Memorial, when it’s refundable, and smart strategies to balance competitiveness with protection. Let’s dive in.
What earnest money is
Earnest money is your good-faith deposit. It shows the seller you’re serious and is credited toward your purchase at closing. There is no Texas law that requires it, so the amount and timing are negotiated and written into your contract.
In Texas, the deposit is usually held by the title company named in your contract. Less often, a broker may hold it in a trust account. The escrow holder follows the signed instructions in your contract and state rules from the Texas Real Estate Commission.
Earnest money is not a fee. Whether you can get it back depends on your contract contingencies and whether you meet the deadlines and duties in the contract.
Typical amounts in Memorial
Memorial is a desirable Houston submarket with many higher-value homes. Sellers often expect meaningful earnest money and value quick delivery and clean terms. Amounts are negotiable, but these ranges are common in Texas and fit many Memorial scenarios:
- Lower-priced homes under about $300,000: often $1,000 to $3,000
- Midrange homes around $300,000 to $700,000: often about 1 percent of price
- Higher-end homes above $700,000: often $10,000 plus or 1 to 3 percent of price
Local conditions change, so it helps to check recent Memorial trends in HAR market reports and lean on your agent’s current read of the neighborhood.
What else sellers consider
A strong offer in Memorial is not just the deposit amount. Sellers also look at:
- Speed of deposit delivery, often within 24 to 72 hours
- Proof of funds and a lender pre-approval
- Clean contract terms with fewer contingencies
- A clear Option Period with a fair Option Fee and timeline
Timing, delivery, and receipts
When the deposit is due
Your TREC contract sets both the amount and the delivery deadline. Deadlines are negotiable, but common choices are same day, within 24 to 72 hours, or a set number of days after the effective date. Follow the deadline exactly. Late delivery can give the seller remedies allowed by the contract.
How to pay safely
Title companies commonly accept wires, cashier’s checks, and sometimes personal checks. Wires are quick for larger deposits, but always verify wiring instructions directly by calling the title company at a trusted number. For more guidance, see the Texas Land Title Association’s wire fraud prevention tips.
Get a receipt
Ask the escrow holder for a written receipt right away. Your contract requires written notice that the earnest money was delivered. Keep that receipt with your records.
How to protect your deposit
Your refund rights depend on your contract. The TREC One to Four Family Residential Contract includes protections and deadlines. Review these with your agent and, if needed, your attorney.
Contingencies that can protect refunds
- Option Period: You can pay a separate Option Fee to the seller for an unrestricted right to terminate during the Option Period. If you terminate in time under this right, you usually get your earnest money back. The Option Fee is typically non-refundable to the seller.
- Financing contingency: If your financing falls through and you give proper notice under the contract, you can usually recover your deposit.
- Appraisal and title or survey objections: The contract lets you object to certain issues and either request cures or terminate under the timelines provided.
- Casualty: If the property is materially damaged before closing and the contract allows termination, the deposit is typically refundable.
When earnest money is at risk
- Missing a deadline: If you do not terminate within the Option Period or you miss financing or appraisal notice deadlines, you may lose refund protections.
- Buyer default: If you walk away without a contract right, the seller may be entitled to your deposit as a remedy allowed in the contract.
TREC forms allow sellers to elect remedies, including keeping the deposit as liquidated damages if that option is selected. The exact language and what is initialed in your contract control the outcome. Learn more about contract forms and rules at the Texas Real Estate Commission and consumer resources from Texas REALTORS.
If there is a dispute
Escrow agents follow the contract. If buyer and seller disagree, the title company may require a joint written release or a court order before disbursing funds. Keep copies of your signed contract, deposit receipt, and any notices or termination letters to support your position.
Smart offer strategies in Memorial
A strong offer balances confidence with protection. Here is how to do both.
- Pick a competitive amount: For midrange Memorial homes, about 1 percent is common, and up to 2 to 3 percent can stand out on higher-end listings. Adjust to current conditions.
- Deliver fast: Same day to 2 business days is attractive. Be ready with wiring or a cashier’s check.
- Use an Option Period: A 5 to 10 day Option Period (with a non-refundable Option Fee) gives you time for inspections while preserving the ability to recover your deposit if you terminate within the period.
- Clarify financing and appraisal terms: Make sure your financing contingency and appraisal language are filled out correctly per TREC forms.
- Be cautious with appraisal gaps: Agreeing to bring extra cash if the appraisal comes in low makes your offer stronger, but it raises your risk. Know your limits before you commit.
- Show strength: Include a lender pre-approval and proof of funds for both the earnest money and down payment.
Sample approaches
- Conservative but competitive: around 1 percent earnest money, 3 business days to deposit, 7 day Option Period, standard financing contingency, strong pre-approval.
- Aggressive for multiple offers: 2 to 3 percent earnest money, same-day deposit, short or no Option Period, and a limited appraisal gap. This increases your exposure if issues arise.
Quick checklist
- Confirm who holds the deposit and the exact delivery deadline in your contract.
- Verify any wire instructions by phone using a trusted number.
- Get and save your escrow receipt immediately.
- Calendar all Option, financing, appraisal, and objection deadlines.
- Keep copies of all signed notices and termination letters.
- Talk with your agent about deposit size, timing, and any non-standard terms before you present the offer.
A strong earnest money strategy helps you compete in Memorial while protecting your funds. If you want a clear plan for your price point and neighborhood, connect with a local expert. Start with a friendly strategy call with Joseph Diosana to tailor your offer to current Memorial conditions.
FAQs
What is earnest money in a Texas home purchase?
- It is a good-faith deposit held in escrow, credited to you at closing, and governed by your contract terms and deadlines.
How much earnest money do Memorial sellers expect?
- Amounts vary, but many buyers offer about 1 percent on midrange homes and 1 to 3 percent on higher-end homes, adjusted for market competitiveness.
When can I get my earnest money back in Texas?
- If you terminate under a valid contract right, such as during the Option Period or due to financing or appraisal terms with proper notice, you typically get a refund.
Where do I deliver earnest money and how?
- Usually to the title company named in your contract, by wire or cashier’s check. Always verify wire instructions by phone with the title company.
What happens if there is a dispute over the deposit?
- The escrow agent follows the contract and may hold funds until a mutual release or court order. Keep all notices and receipts to support your claim.
