Title Tip: Earnest Money Delivery and Delays

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When someone is buying a house, there is a deadline in which to deliver their earnest money to the title company. And they’d better not miss it. We don’t care if it’s too hot outside, they overslept, or the dog ate their homework. A deadline is a deadline.

A buyer has three days to deposit funds with the title company. If the third day is a Saturday, Sunday, or a holiday, then the last day to deliver it is moved to the following business day. The title company will sign a receipt of earnest money with both the date and time the funds are received.

What happens if a buyer doesn’t deliver the earnest money to the title company on time? The skies will open up and swallow them. Well, maybe not. But there are consequences.

If the buyer does not deliver the earnest money by the deadline, the seller may terminate the contract. It frees the seller to sell to someone else. But there’s a catch. The seller may terminate the contract ONLY IF the termination of contract notice is received by the title company BEFORE the buyer deposits the earnest money with the title company.

It could become a race to the title company. And time is of the essence. 

Let’s say Mr. Buyer puts a hot property under contract on Monday. There are lots of folks who want this home and the sellers choose his offer. Mr. Buyer has until Thursday (3 days) to deliver earnest money to the title company. But he leaves town and forgets.  Now the sellers aren’t feeling so good about this deal and they want to terminate and take another offer. They can’t execute a contract to sell the property to someone else until they terminate their current contract with Mr. Buyer.

The sellers complete a termination notice and deliver it to the title company on Friday afternoon only to discover that Mr. Buyer deposited his earnest money on Friday morning. Too late for the sellers. They no longer have the option to terminate due to the missed earnest money deadline. If they had delivered their termination notice before Mr. Buyer deposited his earnest money, the contract would have been terminated and they could have sold to someone else.

Even though the title agent is clocking the time of delivery, keep in mind that the title agency is not a party to the contract and bears no responsibility for working out the differences between the parties. It says so in paragraph 18A of the standard Texas real estate contract. “The escrow agent is not a party to this contract and does not have liability for the performance or nonperformance of any party to the contract…”

The moral of this story? When it comes to Texas contracts, deliver by the deadline!

The opinions expressed are of the individual author for informational purposes only and not for the purpose of providing legal advice. Contact an attorney to obtain advice for any particular issue or problem.


Lydia Blair (formerly Lydia Player) was a successful Realtor for 10 years before jumping to the title side of the business in 2015. Prior to selling real estate, she bought, remodeled and sold homes (before house flipping was an expression). She’s been through the real estate closing process countless times as either a buyer, a seller, a Realtor, and an Escrow Officer. As an Escrow Officer for Allegiance Title at Preston Center, she likes solving problems and cutting through red tape. The most fun part of her job is handing people keys or a check.

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Lydia Blair

Lydia Blair (formerly Lydia Player) was a successful Realtor for 10 years before jumping to the title side of the business in 2015. Prior to selling real estate, she bought, remodeled and sold homes (before house flipping was an expression). She’s been through the real estate closing process countless times as either a buyer, a seller, a Realtor, and an Escrow Officer. As an Escrow Officer for Allegiance Title at Preston Center, she likes solving problems and cutting through red tape. The most fun part of her job is handing people keys or a check.

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