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

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Real Estate Agent with Berkshire Hathaway Home Services - Anderson Properties 518539


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?


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This has been brought to you by YOUR Huntsville / Lake Livingston Area real estate professional. Before you buy or sell, call Joni Staples at (936) 650-9017. I look forward to earning your business and exceeding your expectations. Broker Associate with Berkshire Hathaway Home Services - Anderson Properties. Mike Huff, Broker.

 

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

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Ambassador
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Patricia Kennedy
Evers & Company Real Estate, Inc. - Washington, DC
For Your Home in the Capital

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.

May 30, 2012 08:39 PM #1
Rainmaker
996,038
Karen Anne Stone
New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX
Fort Worth Real Estate

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.

May 30, 2012 08:47 PM #2
Rainmaker
996,038
Karen Anne Stone
New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX
Fort Worth Real Estate

Also... I think the name "Ernest Money" would be a great name for a buyer's agent.  Whaddya  think ?

May 30, 2012 08:49 PM #3
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John McCormack
Albuquerque Homes Realty * www.AlbuquerqueHomes.com - Albuquerque, NM
AlbuquerqueHomes.com

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.

May 30, 2012 08:51 PM #4
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Joni Staples
Berkshire Hathaway Home Services - Anderson Properties - Huntsville, TX
Your Huntsville / Lake Livingston Area REALTOR®

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....

May 30, 2012 09:02 PM #5
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Marilyn Boudreaux
Marilyn Boudreaux, Century 21 Mike D. Bono & Co.'s - Lake Charles, LA
Lake Charles LA Century 21 Realtor

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!

May 30, 2012 09:17 PM #6
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Joni Staples
Berkshire Hathaway Home Services - Anderson Properties - Huntsville, TX
Your Huntsville / Lake Livingston Area REALTOR®

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.

May 30, 2012 09:26 PM #7
Rainer
234,262
Doug Bullwinkel
Vitek Mortgage Group - Roseville, CA
NMLS #281609

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.

May 30, 2012 10:01 PM #8
Rainmaker
1,620,908
Dorie Dillard
Coldwell Banker United Realtors - Austin, TX
Realtor-Canyon Creek- NW, Austin TX Homes For Sale

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!!

May 31, 2012 03:57 AM #9
Rainmaker
1,074,358
Robert (Bob) Gilbert
Berkshire Hathaway HomeServices Anderson Properties - Katy, TX
Your Katy TX Real Estate Expert

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..

May 31, 2012 03:43 PM #10
Rainer
45,393
Heather Milbourn
South Beaches Real Estate Professional - Seminole, FL

I'll be watching for new agent Ernest Money to start blogging LOL

June 01, 2012 05:14 AM #11
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