Earnest money goes only to the title company
Draft Pending review by a Texas title professional before it is final.
Earnest money is the buyer's good-faith deposit. In Texas it goes to the title company, never to the seller or anyone else — and that one rule stops a lot of fraud. Here is how it works.
Updated
What earnest money is
Earnest money is the buyer’s deposit that shows the offer is serious. The amount is negotiated and written into the contract. It isn’t a fee: at closing it counts toward what the buyer pays.
Where it goes: the title company
In a Texas contract, the buyer delivers the earnest money to the escrow agent the contract names — in practice, the title company that will close the sale (¶5). The title company holds it in its escrow account until closing, or until the contract says where it goes.
Earnest money never goes to the seller, to an agent, or to ListedBy: only to the title company named in the contract.
That one rule shuts the door on a common fraud. A fake “owner” who lists a home that isn’t theirs needs the buyer to send money somewhere other than a real title company — to a person, a payment app, or a look-alike account.
When it's due
The buyer delivers the earnest money within 3 days after the contract’s effective date, together with the option fee (¶5). If the buyer doesn’t deliver it on time, the seller may end the contract. The title company gives a receipt, and the seller can ask the title company to confirm the money arrived.
Wiring money? Call first
- Get wiring instructions only from the title company.
- Before you send money, call the title company at a phone number you looked up yourself — on its own website, not in the email or message that carried the instructions — and confirm them.
- If the instructions change at the last minute, stop and call. Changed instructions are the classic sign of wire fraud.
- If money has already gone to the wrong place, call your bank right away and ask it to recall the wire. Then report it to the FBI at ic3.gov and to your local police.
A cashier’s check delivered to the title company’s office is another way to pay. The safety page has more.
At closing
At closing, the earnest money is credited to the buyer on the settlement statement: it becomes part of the down payment and closing costs. The option fee, also held by the title company, is credited toward the price.
If the contract ends
If the buyer ends the contract during the option period, the buyer gets the earnest money back and the seller keeps the option fee (the option period). If the contract ends another way, the contract decides who gets the earnest money.
The title company releases earnest money when both sides sign a release, or as the contract’s escrow terms allow. When the two sides disagree, the money stays in escrow until they agree or a court decides — one more reason it belongs with a neutral title company and not with either side.
ListedBy never holds money
ListedBy never holds money for a sale, and nobody at ListedBy will ask you to send any. Messages on ListedBy that ask for money outside the title company, or that carry bank numbers or wiring instructions, are blocked before anyone sees them.