What’s an Earnest Money Deposit, and How Much Should I Offer?

When you make an offer on a home, you’re not just signing papers—you’re putting down earnest money to show good faith. It’s one of the most important parts of your offer in Lubbock’s real estate market, and yet, one of the least understood.

So what exactly is it?
Earnest money is a deposit you submit once your offer is accepted, usually within three business days. It shows the seller that you’re serious about buying the home and willing to back that commitment financially.

In Lubbock, the typical earnest money deposit ranges between 1% and 2% of the purchase price. So for a $300,000 home, you’d likely deposit between $3,000 and $6,000.

This money doesn’t disappear—it’s held in escrow by the title company and later applied to your down payment or closing costs when you close.

Here’s why it matters: a strong earnest deposit makes your offer more competitive, especially in busy markets. It tells the seller, “I’m invested in this deal.”

But don’t confuse “strong” with “risky.” Texas contracts protect buyers with built-in contingencies. If you back out during your option period (your inspection window), you can typically recover your earnest money—minus the separate option fee—without penalty.

However, if you cancel outside of your contract terms (for example, you change your mind without a valid reason after contingencies expire), the seller may be entitled to keep it.

That’s why balance matters. Too little earnest money can weaken your offer. Too much can expose you if something goes wrong.

When I help clients structure offers, we tailor earnest deposits based on competition level, price range, and negotiation goals. In multiple-offer situations, a slightly higher deposit—paired with strong terms—can set you apart without extra financial strain.

The title company provides a receipt for every earnest deposit, so the process stays transparent and secure.

Think of earnest money as your “I mean it” fund—it builds trust, shows intent, and keeps everyone accountable.

Handled right, it’s not just money—it’s momentum.

— Insights from Tess Hernandez, Realtor | Reside Real Estate