Earnest Money in Lubbock: What Buyers Should Know

Are you wondering how much earnest money you should offer on a Lubbock home, or what happens to it if things change? You are not alone. Many first-time and move-up buyers have the same questions when they start writing offers in Texas. In this guide, you will learn how earnest money works, what to expect in Lubbock, and how to protect your deposit while making a strong offer. Let’s dive in.

Earnest money basics in Texas

Earnest money is your good‑faith deposit that shows a seller you are serious. After a seller accepts your offer, you deliver the funds to the escrow agent named in the contract. In Texas, that is usually a title company or another licensed escrow agent.

Your deposit is held in an escrow account until closing or until the contract ends. The contract sets the delivery deadline, and it is commonly within a few days after the effective date. If you close, your earnest money is typically credited to you at closing per the contract.

Who holds and releases the funds

A title company or escrow agent holds the earnest money in a fiduciary account. They follow the contract instructions for disbursing the funds. If a dispute arises, the escrow agent may require a written mutual release from both parties or a court order before releasing the money.

Option fee vs. earnest money

Texas uses a separate option fee and option period that work alongside earnest money. The option fee is paid directly to the seller for your unrestricted right to terminate the contract during the agreed option period.

If you terminate during the option period as the contract allows, your earnest money is typically returned to you. The option fee is generally not refundable if you use that right to terminate. The option period is also the time most buyers use to complete inspections and negotiate repairs or credits.

Typical amounts in Lubbock

There is no one-size deposit that fits every offer. Across Texas, buyers often use either a flat dollar amount or a percentage of the price. Common ranges include several hundred to several thousand dollars for flat deposits, or about 1% to 2% of the purchase price in normal market conditions. In very competitive situations, some buyers offer more to stand out.

Option fees vary as well. Historically, option fees have often been in the low hundreds, though buyers sometimes offer a larger fee and a shorter option period when competition is high. The right fit in Lubbock depends on price point, seller expectations, and current market conditions.

When earnest money is refundable

You can usually keep your earnest money if you act within the contract. Common refundable scenarios include:

• You terminate within the option period after paying the option fee as agreed.
• You terminate under a written contingency in the contract, such as financing or appraisal, and you meet the notice deadlines.
• You and the seller sign a mutual agreement that releases the contract and allocates the funds back to you.

When your deposit is at risk

Your earnest money can be at risk if you do not follow the contract. At‑risk scenarios include:

• You fail to close without a valid contractual right to terminate. The seller may claim the earnest money under the contract’s remedies.
• You miss a deadline, such as delivering written notice to terminate during the option period or under a contingency.
• There is a dispute about whether a contingency was met or whether termination was timely, and the escrow agent must hold funds until the issue is resolved.

Timelines and notices that protect you

Deadlines control how your earnest money is handled. Keep these in focus:

• Delivery deadline for earnest money after the effective date.
• Option period start and end dates, plus how you must deliver written notice to terminate.
• Financing or appraisal contingency deadlines, including any notice requirements if you do not obtain approval in time.
• Title and HOA review deadlines if your contract contains those provisions.

Put reminders on your calendar the day your offer is accepted. Prompt action is the best way to protect your deposit.

Strategies to strengthen your offer

You can make a competitive offer without overcommitting cash. Here are practical levers to consider:

• Increase the option fee instead of the earnest money. A higher option fee shows commitment to the seller, and it limits how much earnest money is at risk if the deal ends during the option period.
• Offer a modest bump in earnest money that is meaningful but still comfortable for you if the worst happens.
• Shorten key timelines only if you are ready. Order inspections immediately and secure a strong preapproval from your lender before you write the offer.
• Use price or terms to compete. In many cases, purchase price and clean terms matter more to a seller than an extra-large deposit.

How to deliver earnest money in Lubbock

Once your offer is accepted, follow these steps:

1. Confirm the escrow agent named in your contract. This is usually a Lubbock title company.
2. Ask for accepted forms of payment and delivery instructions. Many title companies accept a cashier’s check, wire transfer, or secure digital transfer.
3. Deliver the funds within the timeline in your contract. Keep your receipt or wire confirmation.
4. Notify your agent and lender once the deposit is delivered so they can update your file and closing estimates.

Escrow disputes and how they resolve

If buyer and seller disagree about who should receive the earnest money, the escrow agent will follow the contract. They may hold funds until both parties sign a release or a court provides direction. This process protects you and the seller from funds being released without proper authority.

Working with a local Lubbock team

Local norms can shift with the market. What worked last year may not be the best strategy today. A local team that writes and negotiates offers every week can help you pick the right earnest money amount, set smart timelines, and avoid common pitfalls.

You deserve a smooth path from offer to closing. If you are planning to buy in Lubbock or the nearby West Texas towns, reach out to the specialists who know the contracts, deadlines, and local title processes. For clear guidance and a confident plan, connect with Condor Property Group.

FAQs

How much earnest money should a Lubbock buyer offer?

• Many buyers use a flat $1,000 to $5,000 or about 1% to 2% of the price, then adjust based on competition and the home’s price point.

What is the Texas option period and fee?

• The option period is a negotiated time when you can terminate for any reason; you pay the seller an option fee for that right, and it is generally not refundable if you use it to terminate.

Who holds earnest money in Lubbock?

• A title company or other escrow agent named in your contract holds the funds in a fiduciary account until closing or termination.

When do I get my earnest money back?

• If you terminate within the option period or under another written contingency and meet all notice deadlines, the earnest money is typically returned to you.

What happens if I miss a contract deadline?

• Missing deadlines can remove protections and put your earnest money at risk, so track dates for delivery and termination notices very carefully.

How can I compete without a huge deposit?

• Consider a higher option fee, a modest increase in earnest money, strong preapproval, faster inspections, and clean terms instead of a very large deposit.