Earnest Money in Texas: What Kilgore Buyers Should Know

Wondering how much earnest money you should offer on a Kilgore home? You want your offer to stand out without putting more on the line than needed. With the right plan, you can protect your deposit and use it to strengthen your position. In this guide, you’ll learn what earnest money is, how it works in Texas, typical amounts in Kilgore, when it’s refundable, and a simple checklist to help you stay on track. Let’s dive in.

Earnest money basics in Texas

Earnest money is a good faith deposit you put down after a seller accepts your offer. It shows you are serious and willing to move forward. If you close, it is applied to your funds at closing.

This deposit is not the same as your option fee or your down payment. The option fee pays for your short-term right to terminate during the option period. The down payment is the larger amount you bring to closing.

Who holds the funds

In Texas, the title company or escrow agent named in your contract usually holds the earnest money. The contract will state who the escrow holder is and where to deliver the funds. Always get a written receipt from the escrow holder.

Where it appears in your contract

TREC-promulgated contracts include sections for earnest money, the option fee, inspection periods, financing, and how escrowed funds are handled. Your agent will help you follow the exact contract terms and timing.

Typical Kilgore amounts

In East Texas markets like Kilgore, many buyers use modest flat-dollar deposits for median-priced resale homes. You will often see $500 to $2,500 on typical price points. On higher-priced homes or in a competitive situation, buyers may move closer to 1% to 2% of the price to strengthen an offer.

These are common patterns, not hard rules. Your final number should reflect the property, market conditions, and your comfort level with risk.

Factors to set your amount

• Local price point and inventory conditions in Kilgore and Gregg County.
• Competition on the home. Multiple offers often call for a stronger deposit.
• Risk tolerance. A larger deposit helps your offer but increases exposure if you default.
• Balance with protections. You can pair a strong deposit with a clear option period and financing terms.

Timelines that affect your refund

Your contract’s timing is critical. Many rights and refund options depend on hitting deadlines. The clock starts on the effective date, which is when both parties sign and the contract becomes binding.

Deposit and receipts

Industry practice in Texas is prompt delivery of the earnest deposit to the named escrow holder, often within three business days after the effective date. Follow the contract’s instructions and get a receipt noting the amount and date. Keep that record in case of a dispute.

Option period and the option fee

If you buy an option period, you can terminate for any reason during that window and receive your earnest money back. The option fee is usually nonrefundable. Make sure your termination notice is delivered properly and on time to preserve your refund rights.

Financing and appraisal contingencies

If you cannot obtain loan approval and you terminate within the financing timeline set by the contract, your earnest money is typically refundable. If the appraisal does not align with the contract terms and you properly terminate as allowed, the funds are also generally refundable.

Title issues

If title defects arise and are not cured as the contract requires, you may have a right to terminate and receive your earnest money back. Follow the notice procedures in the contract.

When you may lose earnest money

Your earnest money can be at risk if you default after your termination rights expire. This includes missing the option period deadline or failing to send the required notices. If you back out without a valid contract reason, the seller may be entitled to keep the deposit or seek other remedies allowed by the contract.

If there is a dispute, the escrow agent often holds the funds until both parties sign a release or a court directs disbursement. Proper documentation and timely notices help protect your position.

Step-by-step checklist for Kilgore buyers

Use this quick checklist to plan your deposit and protect it:

1. Confirm who holds the funds. Identify the title company or escrow agent in the contract and the correct payee name.
2. Choose an amount. Align with local practice and the home’s price. Consider competitive conditions.
3. Decide on an option period. Confirm the option fee amount, how to pay it, and the deadline.
4. Keep funds liquid. Ensure the deposit is available. If using gifts, talk to your lender about documentation.
5. Deliver promptly and get a receipt. Ask the escrow holder for written confirmation of deposit and date.
6. Calendar deadlines. Track the option period, financing and appraisal dates, and title review windows.
7. Send any termination in writing. Use the contract’s delivery method and keep proof of timing.

Illustrative examples for offers

These examples reflect common East Texas practice and can be adjusted based on market conditions in Kilgore:

• Lower-priced resale (~$100,000 to $150,000): often $500 to $1,500.
• Mid-range (~$150,000 to $300,000): often $1,000 to $3,000 or about 1% of price.
• Higher price or very competitive: consider 1% to 2% of price to strengthen your offer.

These are illustrative. Your strategy should reflect the specific home, activity level, and your comfort with risk.

Protect your deposit during escrow

You can reduce stress and protect your earnest money with a few simple habits:

• Track dates from the effective date and option period start.
• Send notices in writing as the contract requires. Keep copies and email confirmations.
• Confirm who at the title company handles your file and where to direct questions.
• Ask for updates on appraisal, loan approval, and title. Do not wait until deadlines.
• If repairs or contract obligations are not met, address them before your rights expire.

Local guidance matters

Kilgore’s market shifts with inventory and demand. The right earnest money amount and timing can help you stand out without taking on unnecessary risk. If you want a tailored plan that fits the home and today’s conditions, reach out for a quick strategy chat. You will get a clear recommendation on deposit size, option period length, and the timelines that protect you.

Ready to map out your offer? Connect with Brittany Sartain for local, step-by-step guidance from first look to closing.

FAQs

What is earnest money for a Kilgore home purchase?

• It is a good faith deposit held by the title company that shows you are serious and is applied to your funds at closing if you complete the purchase.

How soon must I deposit earnest money in Texas?

• Follow your contract and escrow instructions. Industry practice is prompt delivery, often within three business days after the effective date, with a written receipt.

Is earnest money the same as the option fee in Texas?

• No. Earnest money is a refundable deposit if you terminate under allowed contingencies. The option fee pays for your right to terminate during the option period and is usually nonrefundable.

When is earnest money refundable for Kilgore buyers?

• If you terminate within the option period, under financing or appraisal contingencies on time, or due to uncured title issues, your earnest money is typically refundable per the contract.

How much earnest money is typical in Kilgore?

• Many offers use flat amounts such as $500 to $2,500 on median resale homes. Higher-priced or competitive offers often use about 1% to 2% of the purchase price.

Who holds my earnest money in a Texas resale?

• The title company or escrow agent named in your contract usually holds it. Always confirm the holder and get a receipt when you deliver funds.

Can the seller keep my earnest money if I back out?

• If you miss deadlines or terminate without a valid contract reason, you may default and the seller may keep the deposit or seek other remedies allowed by the contract.