Buying a home in Grapevine often means writing two checks before you ever get to the closing table. If you are not clear on how earnest money and your down payment work, it is easy to overpay, miss a deadline, or risk funds you meant to keep. You deserve a simple explanation and practical steps tailored to how transactions run in Tarrant County.

This guide breaks down earnest money, the Texas option fee, and the down payment in plain language. You will see typical amounts, timelines, and what happens to your deposit in common contract outcomes. You will also get local best practices to protect your interests and present a strong offer. Let’s dive in.

Earnest money vs down payment

Earnest money basics

• Earnest money is a buyer deposit that shows good faith once your offer is accepted.
• It is held in escrow, usually by the title company named in your contract.
• If you close, the deposit is credited toward your cash due at closing, which includes your down payment and closing costs.
• Whether you can get it back before closing depends on your contract rights and deadlines.

Option fee in Texas

• The option fee is a separate, usually nonrefundable payment to the seller for an option period.
• The option period gives you an unrestricted right to terminate for a set number of days so you can inspect and negotiate.
• If you terminate during the option period as the contract allows, you generally get your earnest money back, while the seller keeps the option fee.

Down payment explained

• The down payment is your equity contribution at closing, set by your loan program and lender.
• It is paid at closing and applied to the purchase price.
• Your earnest money deposit is typically applied to your total cash due at closing, which includes the down payment.

How the Texas process works

Contracts and escrow

• Most resale deals use Texas Real Estate Commission forms that spell out earnest money, option periods, and escrow instructions.
• The contract names an escrow holder, most often a title company in Tarrant County, and sets the deposit and release rules.

Deposit timeline

• Earnest money is usually due within 1 to 3 business days after the contract is executed. Your exact deadline is in your contract.
• Late delivery can create disputes. Plan your payment method and confirm delivery with the title company.

Option period timing

• The option period is negotiable, often 3 to 10 days in area suburbs.
• You pay the option fee to the seller and must deliver any termination notice within the option period to preserve your earnest money rights.

Closing flow

• The title company holds earnest money until closing or termination.
• At closing, earnest money is credited to your cash due. If the contract ends under an allowed contingency and you follow notice rules, the title company returns earnest money per the contract.

Typical amounts in Grapevine

Earnest money ranges

• There is no fixed amount required by Texas law.
• Common approaches include a flat dollar deposit of about 1,000 to 5,000 dollars or a percentage of about 0.5% to 2% of the price.
• In a competitive market, buyers may offer more to strengthen an offer. In a slower market, you can keep it modest and prioritize protective terms.

Option fee ranges

• Typical option fees are about 100 to 500 dollars.
• Higher option fees or longer option periods can be used in competitive situations.
• The option fee is usually nonrefundable unless the parties agree otherwise.

Down payment by loan type

• Conventional: As low as 3% for certain programs, with many buyers putting 5% to 20% or more. Private mortgage insurance is common below 20% down.
• FHA: About 3.5% down, subject to program and lender rules.
• VA: 0% down for eligible borrowers, subject to entitlement and lender criteria.
• USDA: 0% down for eligible buyers and properties.
• Jumbo: Often 10% to 20% or more, depending on the lender and your profile.

How lenders view your funds

Documenting your earnest money

• Lenders verify your source of funds. Keep your earnest money receipt and bank records that show the money leaving your account.
• Provide documentation early so underwriting can count your deposit toward your down payment and closing costs.
• If you plan to use gift funds or borrowed funds, ask your lender about rules and required letters before you move money.

Appraisal outcomes

• If the appraisal is lower than the contract price, you can renegotiate, end the contract under a financing contingency if allowed, or bring extra cash to cover the gap.
• Extra cash to close increases your total funds due and can make your down payment effectively larger.

What happens to earnest money

If you terminate during the option period

• You may cancel for any reason within the option period by following the contract steps.
• The seller usually keeps the option fee.
• The title company returns your earnest money to you after proper notice and instructions.

If financing or appraisal falls through under a contingency

• If you terminate under an allowed contingency and follow the notice rules, your earnest money is generally returned.

If the buyer defaults

• If a buyer fails to close without a contract right to terminate, the seller may keep the earnest money as liquidated damages if the contract allows and the seller elects that remedy.

If the seller defaults

• If the seller cannot or will not perform, the buyer may receive a return of earnest money and may have other remedies per the contract.

If there is a dispute

• The escrow holder follows the contract. Many contracts require a mutual written release or a court order to release earnest money if the parties disagree.
• Title companies may hold the funds until the required documentation is provided.

Local tips for Grapevine buyers

• Get preapproved before you write an offer so you understand your down payment, cash to close, and timing.
• Ask where earnest money will be held and request a deposit confirmation from the title company.
• Match your earnest money and option period to the current market. Larger deposits and shorter option periods can strengthen your offer in a seller’s market.
• Keep every receipt and bank statement related to your earnest money and option fee.
• Track all deadlines. Deliver inspection requests and termination notices on time to protect your deposit.

Local tips for Grapevine sellers

• Request an earnest money amount that reflects buyer seriousness without being excessive for the price point.
• Confirm that the contract clearly names the title company and deposit deadlines.
• Use a reputable Tarrant County title company familiar with local escrow practices.
• Review your remedies for buyer default with your broker and make sure the contract language fits your goals.

Quick checklist for closing in Grapevine

Buyer checklist

• Preapproval letter from a local lender
• Earnest money deposit receipt
• Option fee receipt, if applicable
• Inspection reports and repair requests
• Proof of cleared funds for down payment and closing
• Lender documentation, such as bank statements and any gift letters

Seller checklist

• Executed contract with clear earnest money and option terms
• Confirmation of earnest money deposit at title
• Responses and documentation for inspection negotiations
• Title commitment review and required disclosures

Title company checklist

• Confirm earnest money deposit and escrow instructions
• Track prorations, including property taxes and HOA dues if applicable
• Prepare final settlement and disbursement instructions

Common mistakes to avoid

Mixing up the option fee and earnest money

• The option fee is typically nonrefundable and paid to the seller. Earnest money is escrowed and can be refundable under contract terms.

Missing the deposit deadline

• Late earnest money can cause a contract issue. Plan payment and delivery ahead of time and get confirmation.

Underestimating cash to close

• Your down payment, closing costs, and any appraisal gap are all part of the final number. Keep a cushion.

Skipping documentation

• Without clear receipts and bank records, your lender may not credit your deposit properly.

Ready to move in Grapevine?

You can compete with confidence when you understand how deposits and down payments really work. If you are buying or selling in Grapevine, you deserve experienced, white-glove guidance through offer strategy, timelines, and negotiations. Let’s talk through your plan and tailor the right approach for today’s market. Unknown Company. Let’s Connect.

FAQs

What is earnest money in a Grapevine home purchase?

• Earnest money is a buyer deposit held in escrow after contract acceptance. It shows good faith and is applied to your cash due at closing if you complete the purchase.

How is the option fee different from earnest money in Texas?

• The option fee is paid to the seller for a short option period and is usually nonrefundable. Earnest money is escrowed and may be refundable if you terminate under contract rights.

How much earnest money do buyers usually put down in Grapevine?

• Many buyers use 1,000 to 5,000 dollars or about 0.5% to 2% of the price. The right number depends on market conditions and your risk tolerance.

Will my earnest money count toward my down payment at closing?

• Yes. Your earnest money is typically credited toward your down payment and closing costs on the settlement statement.

Who holds earnest money in Tarrant County deals?

• A title company named in your contract usually holds the funds in escrow until closing or termination.

What happens to earnest money if the appraisal is low?

• You can renegotiate the price, use a financing contingency if allowed to cancel, or bring extra cash to cover any gap between the appraisal and the contract price.