Earnest Money vs. Option Money: What San Antonio Homebuyers Need to Know

In San Antonio real estate transactions, two important financial pieces—earnest money and option money—play crucial roles. Whether you're buying or selling, understanding the difference between these two can help you protect your interests and make smarter decisions.

At The Garza Home Team San Antonio Real Estate, we’re committed to walking you through every step of the process with clear, transparent guidance.

What Is Earnest Money?

Earnest money is a good-faith deposit made by the buyer to show the seller they're serious about purchasing the property. Think of it as a financial handshake—a sign that the buyer is committed.

Typical Amounts

In San Antonio, earnest money usually ranges from 1% to 3% of the home’s purchase price. In hot markets or competitive offer situations, buyers may offer even more to stand out.

Where Does It Go?

Once the offer is accepted, the earnest money is held in an escrow account by a neutral third party, like a title company. If everything goes as planned, the amount is applied toward your down payment or closing costs at the end.

Can You Get It Back?

Yes—if the contract includes valid contingencies (like financing, inspection, or appraisal) and the buyer cancels based on those, the earnest money is refunded. However, if the buyer backs out for a reason not covered in the contract, the seller typically keeps the money.

What Is Option Money?

Option money is a small, non-refundable fee the buyer pays directly to the seller for the right to back out of the contract during the option period—a negotiated window of time used for inspections and due diligence.

Typical Amounts

Option money is usually a few hundred dollars, but it can go higher depending on the market and the value of the home.

How It Works

The option period gives the buyer a chance to inspect the property and negotiate repairs or even walk away from the deal entirely—no questions asked.

Is It Refundable?

No—even if the buyer backs out for a valid reason, option money is non-refundable. If the buyer continues with the purchase, the option money may or may not be applied to the final closing costs, depending on the contract terms.

Key Differences at a Glance

Tips for San Antonio Buyers and Sellers

Buyers

• Be strategic with earnest money: Offer enough to show you're serious, but protect yourself with contract contingencies.

• Use your option period wisely: Schedule inspections quickly and be ready to walk away if red flags appear. Losing a few hundred in option money is better than buying a home with major issues.

Sellers

• Evaluate earnest money closely: A larger deposit often signals a more committed buyer.

• Be mindful of the option period: Too long, and your home sits off the market. Too short, and buyers may not feel confident moving forward.

Let The Garza Home Team Be Your Guide

Real estate in San Antonio moves fast, and understanding the difference between earnest money and option money can save you time, stress, and money. At Garza Home Team San Antonio Real Estate, we’re here to help you navigate every detail with confidence.

Whether you're buying your first home, upgrading to your dream property, or preparing to sell, we provide honest advice, expert strategy, and unmatched local insight every step of the way.

👉 Reach out to The Garza Home Team today for personalized support and proven results in San Antonio real estate.