Updated October 2026 by Texas Made Mortgage, Frisco, TX.
Quick answer: In Dallas-Fort Worth, earnest money is typically 1% of the purchase price, with 2% to 3% common on competitive listings, so $5,000 to $15,000 on a $500,000 home. The option fee is usually $100 to $500 and buys a 5 to 10 day option period. Both are delivered to the title company within three days of the contract being signed. Earnest money is credited back to you at closing and refundable if you terminate within the option period. The option fee is kept by the seller but is also credited to the price if you close.
What is earnest money for?
Earnest money shows the seller you are serious. The title company holds it in escrow, and at closing it is applied to your down payment and closing costs. If you back out for a reason the contract does not protect, the seller can keep it. If you terminate during the option period, or a financing or appraisal contingency fails inside its deadline, you get it back.
How much earnest money do DFW sellers expect?
Typical: 1% of price. $4,000 on $400,000; $6,000 on $600,000.
Competitive listings in Frisco, Prosper, Plano and the Park Cities: 2% to 3%.
New construction: builders often set their own amount, sometimes a flat $5,000 to $10,000 plus a design-center deposit.
The TREC contract leaves the amount blank; there is no legal minimum. A larger deposit can make an offer stronger without raising the price.
What is the option fee and the option period?
The option fee buys the unrestricted right to terminate the contract for any reason during the option period. Most DFW contracts use 5 to 10 days and $100 to $500, though both are negotiable and a shorter period with a higher fee is a common way to compete. Since 2024 the TREC contract has the option fee delivered to the title company along with the earnest money rather than to the seller directly, and it is credited to the sales price at closing.
When is the money due?
Within three days after the effective date of the contract, the date the last party signed. Miss the option fee deadline and you lose the option period. Miss the earnest money deadline and the seller can give notice and terminate. Wire or deliver a cashier's check to the title company the next business day and keep the receipt.
How do buyers get earnest money back?
Terminate in writing before the option period expires. Earnest money is refunded; the option fee stays with the seller.
Financing fails within the third-party financing addendum deadline. Earnest money is refunded.
The appraisal comes in low and the contract's appraisal language lets you terminate on time.
Both parties sign a release of earnest money. The title company will not release funds without it or a court order.
What happens to the money at closing?
Both amounts appear as credits on your Closing Disclosure. On a $500,000 purchase with $5,000 earnest money and a $300 option fee, your cash to close is reduced by $5,300. See closing costs in Texas for the rest of the math.
Frequently asked questions
Can earnest money be paid from gift funds?
Yes, but tell your loan officer first. The transfer has to be documented like any other gift.
Is a 1% deposit too low in a bidding war?
Often. Agents in hot Collin County neighborhoods frequently advise 2% or more. Ask your agent what the listing side expects.
Does earnest money count toward my down payment?
Yes. It is your money applied at closing, not an extra cost.
Writing an offer this week? Talk to a loan officer at Texas Made Mortgage in Frisco or call 817-567-8014 for a same-day pre-approval.
Texas Made Mortgage, NMLS #2676326. This article is general education, not legal advice, a commitment to lend or an offer of credit. Contract terms are negotiable and set by the parties; consult your agent on the current TREC form. All loans subject to credit approval. Equal Housing Opportunity.
