Buying a home in Arlington should feel exciting, not confusing. Yet for many buyers, the word “escrow” raises more questions than answers. You want to understand where your money goes, who holds it, and what has to happen before you get the keys.
In this guide, you’ll learn how escrow works in Texas, how earnest money and the option fee differ, what your title company does, and what to expect from contract to closing in Arlington. You’ll also see typical costs, local timelines, and smart tips to avoid delays. Let’s dive in.
Escrow in Texas, explained
Escrow is a neutral third party’s role of holding funds and documents until everyone meets the contract terms. In Texas, a title company or escrow agent usually performs this function. They collect deposits, coordinate paperwork, and disburse funds only when conditions are satisfied. For a consumer-friendly overview, see the Texas Department of Insurance’s guidance on title and escrow.
It helps to separate “title” from “escrow.” Title work includes the title search, title commitment, and issuing title insurance. Escrow is the money-handling and closing process. Many Texas title companies do both. The Texas Land Title Association’s consumer resources offer helpful explanations of these services.
Earnest money, option fee, and closing funds
Texas contracts use a few different payments. Each one has a purpose and a home during your transaction.
- Earnest money: A good-faith deposit held by the escrow agent named in your contract. It shows commitment and is credited at closing or handled per contract terms if the deal cancels. The contract controls deadlines and refund rules. You can review standard language on the Texas Real Estate Commission contract forms page.
- Option fee: A Texas-specific fee usually paid directly to the seller, not escrow. It gives you an “option period” to inspect and, if needed, terminate under the contract’s terms. If you move forward after the option period, this fee is typically nonrefundable.
- Funds to close: Your down payment and closing costs, delivered to the title company by secure wire or cashier’s check per their instructions.
Who does what in an Arlington closing
Understanding each player’s role helps you move with confidence.
- You, the buyer: Deliver earnest money on time, hire inspections, secure financing, review the title commitment and Closing Disclosure, and bring funds and ID to closing.
- Seller: Provide required disclosures, sign documents, and deliver clear title by paying off liens or mortgages.
- Your real estate agent: Guide negotiations and deadlines, coordinate with the title company, and help you interpret contract milestones.
- Lender: Order the appraisal, approve your loan, issue the Closing Disclosure, and wire loan funds to close.
- Title company/escrow officer: Open escrow, perform the title search, issue the title commitment, prepare settlement statements, coordinate signing, record the deed, and disburse funds. Title companies are regulated by the state, and the Texas Department of Insurance explains their role and oversight. You can also explore the TLTA’s consumer pages for more background.
Arlington escrow timeline: step by step
Keep in mind that your specific contract controls dates. Here’s the typical flow once your offer is accepted.
Effective date and deadlines
Your “effective date” starts the clock on key items. Earnest money delivery, the option period, title review, and other deadlines are spelled out in your contract. You can reference standard forms on the TREC forms page.
Deliver earnest money
You usually have a short window to deposit earnest money with the named escrow agent. The title company will confirm receipt and provide an escrow receipt. Make sure the payee and delivery method match the title company’s instructions.
Option period and inspections
If your contract includes an option period, you pay the option fee directly to the seller and schedule inspections fast. You can negotiate repairs or terminate within this window under the contract’s terms.
Loan, appraisal, and underwriting
Your lender will order the appraisal and push your file through underwriting. Share your title company’s details with the lender so the lender’s title policy and payoff requests are coordinated.
Title search and title commitment
The title company examines the property’s history and issues a title commitment with any exceptions like easements, liens, or HOA assessments. Read it promptly and raise objections within the contract’s deadline. The TLTA consumer resources and TDI’s title page can help you understand what you are reviewing.
Closing Disclosure timing
For financed purchases, federal rules require your lender to deliver a Closing Disclosure at least 3 business days before your signing. This gives you time to review fees and cash to close. Learn more about this rule from the Consumer Financial Protection Bureau’s Closing Disclosure guide.
Final walkthrough and signing
Do a final walkthrough to confirm condition and agreed repairs. Then you will sign loan and title documents at the title company’s office. Bring a government-issued ID and follow the title company’s instructions for delivering your final funds.
Funding, recording, and keys
After you sign, the lender wires loan funds to escrow. The title company then disburses money to the seller, pays off liens, and sends the deed for recording with the Tarrant County Clerk. You can find local recording information through the Tarrant County Clerk’s office. Once funded and recorded per contract, you receive keys.
Post-closing
You will receive your final settlement statements and your title insurance policy after closing. Keep these documents for your records and future tax needs.
Costs, prorations, and who pays what
Many fees are customary in Texas, but almost everything is negotiable in the contract. Always check your signed agreement.
- Title insurance: In Texas, the seller often pays for the owner’s title policy, while the buyer usually pays for the lender’s title policy if there is a loan. Customs can vary and are negotiable. The Texas Land Title Association explains typical practices.
- Buyer closing costs: Lender fees, appraisal, loan origination, lender’s title policy, prepaid property taxes and homeowner’s insurance, recording fees, and any contractually agreed escrow fees. If the property has an HOA, plan for association transfer fees and dues prorations.
- Seller costs: Owner’s title policy if negotiated that way, real estate commissions, and payoff of any liens or mortgages.
- Property tax prorations: Texas property taxes are paid in arrears, so your closing will prorate taxes based on the closing date. For local tax calendars and payment details, visit the Tarrant County Tax Office. The Tarrant Appraisal District is also a useful resource for assessments and exemptions.
- Recording fees: The county charges fees to record documents. See current procedures on the Tarrant County Clerk’s recording page.
- Transfer taxes: Texas does not have a state real estate transfer tax, which can reduce your overall closing costs compared to some other states.
Smart tips for a smooth escrow
- Confirm the escrow agent: Make sure your contract correctly names the title company and that you receive a written receipt after depositing earnest money.
- Know your fees: Distinguish between earnest money and the option fee. Each has its own recipient, deadline, and refund rules.
- Protect your wire: Always verify wiring instructions by calling a known phone number for your title company. Do not rely on email alone.
- Read the title commitment: Review it fast and raise any objections within the contract timeline.
- Plan for the 3-day rule: Build the federal Closing Disclosure review window into your scheduling to avoid last-minute delays. See the CFPB’s explanation of the rule.
- Check HOA and special districts: If applicable, get the HOA resale certificate early and review any special assessments or utility district fees noted in the title commitment.
- Watch tax timing: Ask your title company how prorations will appear on your settlement and review local calendars with the Tarrant County Tax Office and the Tarrant Appraisal District.
Escrow disputes and what-if scenarios
Most transactions close on time, but questions can come up.
- Earnest money disputes: Refunds depend on the contract. During an active option period, you may have a right to terminate per the terms. If parties disagree, funds can remain in escrow until a mutual release, an interpleader action, or guidance from dispute resolution outlined in the contract.
- Title issues: If the title commitment shows liens or judgments, the seller typically clears them before closing. Title insurance can protect against covered risks post-closing depending on the policy and exceptions.
- Funding delays: Escrow cannot disburse without confirmed funds. Contracts include remedies if closing is delayed; talk with your agent, title company, and lender to understand options under your agreement.
Ready to buy in Arlington?
You deserve a clear, low-stress path from offer to keys. With a local title company, a responsive lender, and a trusted agent team, escrow becomes a straightforward checklist rather than a mystery. If you are planning a move to or within Arlington, our team is happy to walk you through timelines, costs, and what to expect at each step.
Reach out to Best Life Realty Group for a step-by-step escrow game plan tailored to your goals in Arlington.
FAQs
What is escrow when buying a home in Arlington?
- Escrow is the title company or escrow agent holding funds and documents until all contract terms are met, then coordinating recording and disbursement; see the Texas Department of Insurance overview.
Who holds earnest money in an Arlington purchase?
- The escrow agent named in your signed contract, usually the title company; confirm deadlines and delivery on the TREC forms page.
How is the option fee different from earnest money in Texas?
- The option fee is typically paid directly to the seller for the right to terminate during the option period, while earnest money is held in escrow and handled per the contract.
How long does escrow take for financed homes in Arlington?
- Many financed purchases close in 30 to 45 days depending on appraisal, underwriting, repairs, and clear title; your contract’s closing date controls.
What should I review before closing in Texas?
- Review the title commitment, settlement statements, and the lender’s Closing Disclosure, which must be delivered at least 3 business days before closing per the CFPB.
Who typically pays for owner’s title insurance in Texas?
- It is customary for the seller to pay for the owner’s title policy, though this is negotiable; see common practices via the Texas Land Title Association.
How are property taxes handled at closing in Tarrant County?
- Texas property taxes are paid in arrears and are prorated at closing based on the date; check local details with the Tarrant County Tax Office and the Tarrant Appraisal District.
