Earnest Money Release Form Texas: How TXR 1904 Works

When a Texas real estate contract falls through before closing, the earnest money held in escrow doesn't disburse itself. Someone has to formally instruct the escrow agent — usually a title company — on who gets the funds and how much. In Texas, that instruction is documented using TXR 1904, Release of Earnest Money.

TXR 1904 is a Texas REALTORS® form in the "other" category, meaning it isn't a contract itself — it's a release document used alongside one. It applies across deal types: residential sales, commercial sales, farm & ranch, and vacant land. The current version carries a 2002-02-06 revision date, and it's the standard instrument Texas agents use to close out earnest money on a terminated transaction.

Put simply: the underlying purchase contract (whether that's a TREC 20-19 One to Four Family Residential Contract, a TREC 9-18 Unimproved Property Contract, a TXR 1801 Commercial Contract, or any other current Texas contract) governs who is entitled to the earnest money when a deal doesn't close. TXR 1904 is the paperwork that actually tells the title company to release it, and to whom.

The release form comes into play any time a contract terminates before closing and earnest money is sitting in a title company's escrow account. Common scenarios include a buyer exercising a termination option, a financing contingency that falls apart, an inspection issue that kills the deal, or a seller default. In every case, both parties typically need to agree — in writing — on how the funds should be disbursed before the title company will release anything.

Because TXR 1904 applies to residential sales, commercial sales, farm & ranch deals, and vacant land contracts alike, it's one of the more frequently used "other" category forms in a Texas agent's toolkit. A listing agent and a buyer's agent working the same terminated deal will both want a clean, properly executed release on file — it protects their clients and closes the loop on the transaction file.

Generally, once both buyer and seller (or their authorized representatives) sign TXR 1904 specifying the agreed disbursement, the escrow agent releases the funds accordingly. If both parties agree quickly, this can be a short, low-friction step at the end of a deal that didn't make it to closing.

Disputes arise when buyer and seller don't agree on who's entitled to the earnest money — for example, if a seller believes a buyer defaulted without a valid contractual excuse. In that situation, a title company generally won't release funds without both signatures, and the parties may need to pursue mediation or other resolution outlined in the contract. Because earnest money disputes can involve contract interpretation and legal remedies, agents should direct clients to a real estate attorney for case-specific guidance rather than offering legal advice themselves.

Agents should also make sure the release document matches the actual contract and any amendments on file — the release should reference the same property, parties, and earnest money amount as the executed contract so the escrow agent has no ambiguity to resolve.

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Whether you're sorting out a release form on a terminated deal or preparing a new contract for signature, the goal is the same: less time wrestling paperwork, more time serving clients. Applying to RaiderX is free, and broker approval is typically turned around within 3-5 business days.