Do I HAVE to Put Up Earnest Money When I Purchase a Home in Texas?



Do I have to put up earnest money to buy a home in Texas? Well.... the answer is no AND yes.



Do I have to put up earnest money to buy a home in Texas?No, it's not required. HOWEVER.... earnest money demonstrates strength in your ability to purchase the home, as well as your sincere desire to follow through with your commitment.


That's where the "Yes" part comes in. Although earnest money is not a requirement to make a contract legal and binding, MOST sellers are not going to agree to take their home off of the market for a buyer who doesn't have earnest money. So yes, the seller may (and most likely WILL) require it.


Most things in real estate are negotiable. The amount of earnest money that is put down is one of those negotiable items. It can be as little as zero and go up to several thousand dollars. It can even be non refundable.



Every situation is different. The point is to come to an agreement between the buyer and the seller. If everyone is okay with it, NO earnest money is allowed in Texas. I have seen it happen only once in the past 8+ years.


 

Do I have to put up earnest money to buy a home in Texas?

 



Do I HAVE to Put Up Earnest Money When I Purchase a Home in Texas?


Joni Staples, Broker Associate BHGHRE-AP (936) 650-9017 Copyright (C) Joni Staples     (936) 650-9017  www.HuntsvilleHomeSource.com

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11 Comments on Do I HAVE to Put Up Earnest Money When I Purchase a Home in Texas?

MAY
30
1,914,618 Points 386 Featured Posts Localism Sponsor Outside Blog Attended Rain Camp Called Shot Master

Joni, when I  was in high school, we did "The Importance of Being Earnest" as the class play.  Every time I talk about earnest money, I think about it.
8:39pm • #1
967,251 Points 60 Featured Posts Outside Blog Called Shot Master

Joni, another problem with a buyer trying not to put up any earnest money, is that they will surely be seen as a very weak buyer.  No earnest money greatly increases the chance that the seller will reject the offer. Also, with multiple offers that are happening, the amount of earnest money becomes even more important.
8:47pm • #2
967,251 Points 60 Featured Posts Outside Blog Called Shot Master

Also... I think the name "Ernest Money" would be a great name for a buyer's agent.  Whaddya  think ?
8:49pm • #3
587,113 Points 46 Featured Posts Outside Blog Called Shot Master

Do I HAVE to Put Up Earnest Money When I Purchase a Home in Texas? Good explanation Joni.... In all my years as a Realtor® I've never seen a deal with no earnest money.
8:51pm • #4
880,083 Points 48 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Pat: And a great thing to think about at that particular moment. It is VERY important. I should write a blog post about the one time that I saw a contract close without it. It was interesting to say the least.

Karen Anne: Earnest may be Eddie's twin brother!! ☺

Q: I really should write about that story. It was a long time ago... I could leave out enough details that no one could figure it out. Maybe I will....
9:02pm • #5
590,125 Points 31 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

very informational Joni...we can't call it ernest money, in LA it is referred to as deposit money and the broker cashes the check and deposits into broker's escrow account and we bring a new check to closing.  Many people think their check will just  and be clipped to the file and not cashed and then are surprised when the debit hits!
9:17pm • #6
880,083 Points 48 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Marilyn: That is VERY interesting. I am glad the title company deals with it. The broker CAN, but we always take it to the title company when we open title.
9:26pm • #7
230,369 Points 9 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

I think there's a saying around that goes like this:  "Money Talks".  If a buyer is not serious enough to put up some good faith money, the seller will probably be more likely to accept an offer from another buyer that will.
10:01pm • #8
MAY
31
1,227,433 Points 79 Featured Posts Localism Sponsor Attended Rain Camp Called Shot Master

Good morning Joni,

In 22 years of real estate I have never had a transaction with no earnest money tendered! Sellers are funny about that they like to see a buyer get some skin in the game if they are going to take their home off the market. In today's market with often multiple offers earnest money is an important part of the equation...if the buyer really wants the house they will pull out all the stops to make their offer attractive. P.S..you have been changing your header again! I like it!!
3:57am • #9
706,042 Points 10 Featured Posts Outside Blog Called Shot Master

Hi Joni,

As I know you are aware, Earnest Money in Texas is for liquidated damages in case the buyer walks from the deal without having a contractual ability to do so. I really cannot imagine any deal new or resale where no Earnest Money is required. Personally I think I will continue to tell folks EM is necessary no matter what as someone might get a crazy idea that they will get away without posting EM.

Good blog Joni..

3:43pm • #10
JUN
01
1 Featured Post Outside Blog

I'll be watching for new agent Ernest Money to start blogging LOL
5:14am • #11


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Huntsville, TX

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