Earnest Money & The Option Period In San Antonio, Explained

Last updated: June 12, 2026

Most first-time buyer guides stop at pre-approval and house hunting. They walk you through getting your financing lined up, finding the right neighborhood, and making an offer. Then they skip the part that actually makes buyers nervous: what happens after the seller says yes.

In Texas, the period between "offer accepted" and "closing day" has specific mechanics that most first-time buyers have never heard of. The option period, earnest money deposits, due diligence inspections, and the negotiation that follows are all governed by the Texas Real Estate Commission (TREC) contract. If you understand these steps before you go under contract, you will make better decisions and avoid the mistakes that cost buyers time, money, or both.

This guide walks through every stage of the Texas contract process as it works in San Antonio and the surrounding areas. Whether you are a first-time buyer, a military family arriving at JBSA, or someone relocating from out of state, this is the information you need before your offer gets accepted.

I am Jonathan Morris, a Realtor and Mortgage Loan Officer with Velvet Realty Group. My wife Naomi is a licensed agent on the team. Together we have guided hundreds of buyers through the Texas contract process. These details reflect real transactions, not textbook theory.

Earnest Money: Your Good-Faith Deposit — Earnest Money, Option Period, and What Happens After Your Offer Is Accepted in San Antonio

Earnest money is the deposit you make when your offer is accepted. It tells the seller you are serious about the purchase. In Texas, this money goes into an escrow account held by the title company, not directly to the seller. It is not a fee. It is applied toward your closing costs or down payment at the end of the transaction.

In the San Antonio market, earnest money deposits typically range from 1% to 3% of the purchase price. On a $280,000 home, that means you are putting down somewhere between $2,800 and $8,400 in earnest money.

Here is what determines where you land in that range:

• Market conditions. In a competitive market with multiple offers, a higher earnest money deposit signals commitment. During peak PCS season near JBSA, homes in the $225,000 to $350,000 range regularly receive multiple offers, and a stronger deposit can set your offer apart.
• Price point. Higher-priced homes in areas like Alamo Heights, Stone Oak, or New Braunfels tend to carry earnest money closer to 2% or 3%.
• Buyer situation. VA and FHA buyers sometimes negotiate lower earnest money because their loan programs carry different risk profiles for the seller.

When Do You Lose Your Earnest Money?

This is the question every buyer asks, and the honest answer is straightforward. You forfeit your earnest money if you terminate the contract after the option period has expired and you do not have a valid contractual reason (such as a financing contingency or appraisal contingency that is not met). During the option period, you can walk away for any reason and get your earnest money back. After the option period expires, the earnest money becomes at risk if you terminate without cause.

This is exactly why the option period exists, and why it matters so much.

The Option Period: Texas's Unique Buyer Protection

The option period is something most other states do not have. It is a negotiated window of time, typically 7 to 10 calendar days, during which you have the unrestricted right to terminate the contract for any reason. You do not need to explain why. You do not need the seller's approval. You provide written notice, and the contract is terminated.

To secure the option period, you pay the seller a non-refundable option fee. This fee is separate from earnest money and is paid directly to the seller (not into escrow). In the San Antonio market, option fees typically range from $100 to $500, though in competitive situations they can go higher.

Here is what you need to understand about the option fee:

• It is non-refundable regardless of whether you buy the home or not. Think of it as the cost of securing your right to walk away.
• If you close on the home, the option fee is credited toward your purchase price.
• If you terminate during the option period, you lose the option fee but you keep your earnest money.
• If you do not terminate during the option period and later fail to close, you can lose both the option fee and the earnest money.

The option period is not a contingency. Contingencies (like financing or appraisal contingencies) require a specific event to trigger your right to terminate. The option period gives you the right to terminate for any reason, no questions asked. That distinction matters.

Why the Option Period Matters More in San Antonio

San Antonio's housing stock includes a wide range of home ages and conditions. In established neighborhoods like Alamo Heights, Monte Vista, or the near-east side, homes may be 50 to 100 years old. In newer developments along the I-10 or I-35 corridors, homes are less than 10 years old. The age and condition of the home directly affect what your inspection reveals, and the option period is your safety net.

San Antonio sits on expansive clay soil. That soil expands when it absorbs water and contracts during dry periods. Over time, that movement puts stress on concrete slab foundations. A home that looked perfect during the showing can reveal foundation movement during inspection that is not visible to the naked eye. The option period is when you discover that, and when you decide whether to negotiate repairs, request a price reduction, or walk away entirely.

Due Diligence: What to Inspect During Your Option Period

The option period is when you do your due diligence. You are not just "getting an inspection." You are evaluating every major system of the home to understand what you are buying. In San Antonio, certain issues come up more frequently than in other parts of the country. Here is what to prioritize.

General Home Inspection

A general home inspection in San Antonio typically costs between $350 and $500 depending on the size and age of the home. The inspector evaluates the roof, structure, plumbing, electrical, HVAC, insulation, and exterior. This is your baseline, and you should never skip it, regardless of the home's age or how well it has been maintained.

Foundation Inspection

In San Antonio, a general inspector will note obvious foundation issues, but if you see any signs of movement, cracked drywall, doors that stick, or uneven floors, bring in a licensed structural engineer. A foundation evaluation typically costs $400 to $600 and gives you a detailed report on the condition of the slab and any necessary repairs.

Foundation repair in San Antonio is not unusual. It is also not the end of the world. Piers and other stabilization methods are well-understood, widely available, and often carry transferable warranties. The key is knowing what you are dealing with before you close, not after.

Plumbing: Watch for Polybutylene

Homes built in San Antonio between the late 1970s and mid-1990s may have polybutylene piping, sometimes called "poly pipe" or "gray pipe." This material was widely used across the country but was discontinued in 1995 because of a high failure rate. Polybutylene pipes become brittle over time and are prone to leaking, often at the joints.

You will not always see polybutylene during a walkthrough. It is often hidden behind walls and under slabs. A knowledgeable inspector will check visible piping in the attic, crawlspace, and at the water heater. If polybutylene is present, you need to understand the replacement cost, which can range from $4,000 to $15,000 or more depending on the size of the home and whether the pipes run under the slab. That is a negotiation point during your option period, not a surprise after closing.

HVAC: San Antonio's Non-Negotiable System

In a city where summer temperatures regularly exceed 100 degrees, your air conditioning system is not a luxury. It is a necessity. An HVAC inspection checks the age of the unit, refrigerant levels, ductwork condition, and whether the system is properly sized for the home.

Here is what you need to know about HVAC in San Antonio:

• The average lifespan of a central AC unit in South Texas is 12 to 15 years. Systems that are 15 years or older are entering the replacement zone. A new HVAC system in San Antonio typically costs $6,000 to $12,000 depending on the size of the home and the efficiency rating.
• Ductwork in attic spaces can degrade, especially in older homes where insulation around the ducts has compressed or separated. Poor ductwork means your system runs longer, costs more to operate, and cools unevenly.
• Ask about the SEER rating. Higher SEER means better energy efficiency. In San Antonio's climate, the difference between a 14 SEER and a 16 SEER system can save you hundreds of dollars per year on electricity.

Roof Inspection

San Antonio gets hail. Some years more than others, but it is a fact of life in South Texas. A roof inspection checks for missing shingles, hail damage, flashing condition, and the remaining useful life of the roof. If the roof is more than 15 years old or shows active hail damage, you need to know before you close. Roof replacement on a typical San Antonio home costs $8,000 to $18,000 depending on size, material, and pitch.

Sewer Scope

This is the inspection most first-time buyers do not know to ask for. A sewer scope runs a camera through the main sewer line from the house to the street connection. In older San Antonio neighborhoods, the sewer line may be original clay tile, which can crack, shift, or develop root intrusion over decades. A sewer scope costs $150 to $300 and can save you from a $5,000 to $20,000 repair you did not see coming.

After the Inspection: What You Can Do

Once the inspections are complete and you have the reports in hand, you have three options during the remaining days of your option period:

1. Negotiate for Repairs or Credits

You can ask the seller to make specific repairs, provide a lump-sum credit at closing, or reduce the purchase price to offset the cost of repairs you will handle after closing. In San Antonio, the most common negotiation points are HVAC replacement, foundation repair, polybutylene pipe replacement, and roof repair. A credit at closing is often the cleanest solution because it gives you control over the work and who does it.

2. Accept the Home As-Is

If the inspections reveal no major issues, or if you are comfortable with the condition and the price reflects it, you can move forward without requesting anything. This is more common with newer construction or recently renovated homes where systems are within their expected lifespan.

3. Terminate the Contract

If the inspection reveals problems you do not want to take on, you can walk away. As long as you are within the option period, you provide written notice to the seller and your earnest money is returned. You lose only the option fee. This is the safety net that the option period provides, and it is the reason this part of the Texas contract exists.

The key is that all of this must happen within the option period. Once the option period expires, your earnest money is at risk if you terminate. This is why experienced agents front-load the inspection process and push to have reports completed early in the option window. You want days to negotiate, not hours.

Special Considerations for VA Loan Buyers

If you are using a VA loan, your contract process has one additional layer: the VA appraisal. The VA appraisal is ordered by your lender and is separate from both the home inspection and the option period. The VA appraisal confirms two things: the home's market value and whether it meets the VA's Minimum Property Requirements (MPRs).

Here is why this matters for your option period timeline:

• The VA appraisal in the San Antonio area typically takes 10 to 15 business days to complete, though it can take longer during peak PCS season when appraiser demand is high.
• If the VA appraisal comes in below the contract price, you have a problem. The VA will not finance more than the appraised value. At that point, you can negotiate a price reduction with the seller, make up the difference in cash, or terminate the contract.
• The VA appraisal is not a substitute for a home inspection. The VA appraisal confirms basic habitability and value. It does not catch polybutylene pipes, ductwork issues, sewer line problems, or the detailed foundation assessment that San Antonio's clay soil demands.

As a dual-licensed Realtor and Mortgage Loan Officer, I coordinate the appraisal timing with the contract timeline from day one. When your lender and your agent are working together, there are fewer surprises and fewer delays. That coordination matters more during PCS season than at any other time of year.

From Option Period Expiration to Closing Day

After the option period expires and you have either negotiated repairs or accepted the home as-is, the remaining 20 to 30 days of the contract are focused on getting to closing. Here is what happens during that window:

Title Work

The title company performs a title search to confirm the seller has clear ownership and there are no liens, encumbrances, or legal issues with the property. In Bexar County, this typically takes 5 to 7 business days. If issues arise (an old lien, a boundary dispute, an unpermitted addition), they need to be resolved before closing.

Lender Processing and Underwriting

Your lender finalizes the loan. This includes verifying your employment, income, and assets, ordering the appraisal (for VA loans, this is the VA appraisal), and obtaining final underwriting approval. Keep your financial picture stable during this time. Do not open new credit accounts, make large purchases, or change jobs. Lenders re-verify your financial status before closing, and changes can delay or derail the loan.

Homeowner's Insurance

In Texas, you must have homeowner's insurance in place before closing. Your lender will require it. Shop for insurance early, because rates in San Antonio can vary significantly based on the age of the home, the condition of the roof, the proximity to flood zones, and your claims history. Expect to pay between $1,800 and $4,000 or more per year depending on the property.

Final Walkthrough

Typically done 1 to 2 days before closing, the final walkthrough confirms that the home is in the condition agreed upon in the contract, any negotiated repairs have been completed, and nothing has changed since you last saw the property. This is not a second inspection. It is a verification step.

Closing Disclosure

Your lender provides a Closing Disclosure at least three business days before closing. This document details your final loan terms, monthly payment, and every closing cost. Compare it to your original Loan Estimate. If anything looks significantly different, ask your lender to explain the changes before you sign.

Common Mistakes During the Contract Process

After guiding hundreds of buyers through the Texas contract process in San Antonio, these are the mistakes that come up most often:

1. Not Scheduling Inspections Early Enough

The option period is typically 7 to 10 days. If you wait until day 5 to schedule your general inspection, you may not have time to bring in a foundation specialist, a plumber, or an HVAC tech before the option period expires. Schedule your general inspection within the first 2 to 3 days. Give yourself time to act on what the inspector finds.

2. Skipping the Sewer Scope

Most first-time buyers do not know a sewer scope exists. In older San Antonio homes, a cracked or root-intruded sewer line can cost $5,000 to $20,000 to repair. For $150 to $300, you can find out before you close. This is one of the highest-value inspections you can add.

3. Confusing the Option Period with the Inspection Period

In Texas, the option period and the inspection period are the same thing. The option period is your window to inspect and terminate for any reason. There is no separate "inspection contingency" in the standard TREC contract. If you do not exercise your option before it expires, you lose the right to terminate for inspection-related issues without risking your earnest money.

4. Making Large Financial Changes During Underwriting

Between going under contract and closing, your lender is verifying your financial stability. Opening a new credit card, financing furniture, buying a car, or moving large sums between accounts can trigger a re-verification that delays your closing or, in worst cases, jeopardizes your loan approval. Keep your finances stable until after you have the keys.

5. Not Understanding What Happens to Earnest Money If You Terminate Late

Some buyers believe they can walk away from a contract at any time and get their earnest money back. In Texas, that is not true. After the option period expires, terminating without a valid contractual basis (like a financing contingency or appraisal contingency) puts your earnest money at risk. This is not a scare tactic. It is how the Texas contract works.

The Real Cost Before Closing

First-time buyers often focus on the down payment and forget the other money that comes out of pocket before closing day. Here is what to expect in San Antonio:

• Earnest money deposit: 1% to 3% of the purchase price, deposited within 1 to 3 business days of going under contract. This is credited toward your closing costs at the end.
• Option fee: $100 to $500, paid directly to the seller. Non-refundable, but credited toward your purchase price if you close.
• General home inspection: $350 to $500. Out of pocket.
• Specialty inspections: Foundation engineer ($400 to $600), sewer scope ($150 to $300), termite/WDI inspection ($75 to $150). Out of pocket, but optional depending on the home.
• Appraisal fee: $400 to $600, typically paid upfront to the lender. For VA loans, the VA appraisal fee is around $500 to $600 in the San Antonio area.

If you are using a VA loan with zero down payment, your total out-of-pocket cost before closing is typically $1,500 to $3,000, depending on the inspections you choose. For conventional buyers putting 3% to 5% down, add the down payment to that figure.

For a full breakdown of every closing cost, see our complete Texas closing costs guide .

Why the Texas Contract Process Works

The option period is not a hurdle. It is a protection. It exists so that you can make an informed decision about the biggest purchase of your life with full information about what you are buying. In states without an option period, buyers often waive inspection contingencies to compete in multiple-offer situations, and they discover expensive problems after closing with limited recourse.

Texas gives you a defined window with clear rules. Use it wisely. Schedule inspections early, bring in specialists when the general inspector flags something, and negotiate from a position of knowledge rather than hope.

When you work with a team that understands both the real estate contract and the mortgage side of the transaction, you get a smoother process from start to finish. I can tell you how a repair credit affects your loan terms, how the VA appraisal timeline fits into the contract, and whether a seller's concession makes sense for your specific situation. That is not something every agent can offer.

Ready to Make Your Move?

Whether you are a first-time buyer navigating this process for the first time, a military family PCS-ing to JBSA, or someone relocating to San Antonio from out of state, we are here to walk you through every step. No jargon, no pressure, no surprises on closing day.

Call 210-880-4519 or visit our contact page to schedule a no-pressure consultation. We will answer your questions, explain the numbers, and give you a clear picture of what buying a home in San Antonio actually looks like.

Have questions about the buying process? Let's talk.

Whether you are buying your first home, relocating, or PCS-ing to San Antonio, we are here to help you understand every step before you take it. Real estate, without the performance.

Related resources:

• Closing Costs in Texas: What Every Buyer Should Expect
• First-Time Home Buyer's Guide to San Antonio in 2026
• The Home Inspection Checklist Every Buyer Needs
• 7 Common Mistakes First-Time Home Buyers Make in San Antonio
• VA Loan Guide for San Antonio Military Families
• FAQ

Talk Soon.

Jonathan Morris, Realtor (TX #794969), MLO (NMLS# 2792614)