TXR 1904 Form: Release of Earnest Money, Explained

TXR 1904, Release of Earnest Money, is a Texas REALTORS® form used any time a contract falls through, or a deal is otherwise being canceled or resolved, and the buyer and seller need to agree on where the earnest money goes. It's classified under the "other" category in the TXR library rather than as a contract or addendum — it's a standalone release instrument, not part of the original purchase agreement.

TXR 1904 is used across contract types: residential sales, commercial sales, farm & ranch, and vacant land. That breadth is exactly why agents run into it so often — the form applies whether the terminated deal was a resale house, a raw land contract, or a commercial property, so it's worth understanding regardless of which side of the market you work.

There is no TREC-promulgated equivalent to TXR 1904. TREC's promulgated contracts (like the One to Four Family Residential Contract) address earnest money at signing, but the actual release once a deal is dead is handled through this TXR form. The current version is revision 2002-02-06. You can view the full form at /resources/forms/txr-1904.

The most common trigger is a terminated contract — a buyer exercises an option period termination, a financing contingency fails, an inspection turns up something a buyer walks over, or both parties simply agree to cancel. In any of those situations, someone has to formally direct the title company or escrow agent holding the earnest money on where to send it.

It also shows up in disputed situations, though agents should tread carefully here. If buyer and seller don't agree on who is entitled to the earnest money, TXR 1904 isn't the tool to force a resolution — it only works when both parties are willing to sign off on the same outcome. Disputes that can't be resolved by mutual agreement typically need to go to the title company's dispute process or to an attorney, not a form your client signs under pressure.

Because earnest money disputes can carry real legal and financial consequences for your client, this is one of the situations where agents should lean on their broker and, where appropriate, recommend the client consult a real estate attorney rather than trying to resolve it informally.

In practice, the form requires input from both the buyer and the seller — it's not something one party can execute unilaterally to force a release. Once both signatures are collected, the signed release is submitted to whichever title company or escrow agent is holding the earnest money, and they disburse funds according to the instructions on the form.

Timing matters. The longer a canceled deal sits without a signed release, the longer the earnest money sits in limbo and the more likely small disagreements harden into real disputes. Agents who treat the release as a same-week priority, rather than an afterthought once a deal falls apart, tend to keep things moving smoothly for their clients.

As with any form that touches funds disbursement, agents should stick to filling in the facts of the transaction and let the broker or the client's own advisors weigh in on anything that looks like a genuine dispute over entitlement.

The biggest mistake is delay — letting a canceled contract sit unaddressed instead of getting the release drafted and circulated right away. The second is trying to use TXR 1904 as a substitute for resolving a real disagreement between buyer and seller; the form documents an agreement, it doesn't create one.

Agents also sometimes assume the release is optional if both parties have already "agreed verbally" to walk away. Verbal understanding isn't enough for a title company to release funds — they need the signed instrument. Getting comfortable with this form, and having a reliable way to generate and send it quickly, is a small thing that saves real friction on canceled deals.

None of this is legal advice, and it isn't meant to be — if a release situation gets contentious, that's the moment to loop in your broker and point your client toward a licensed real estate attorney rather than trying to manage the dispute yourself.

RaiderX agents can fill out TXR 1904 — along with every current TREC form and a growing library of TXR forms — inside EZDocs (beta), our in-app guided form tool. You complete a short guided form, send it out for e-signature, and the signed copy is filed into the deal automatically. There's no per-signature fee, so a terminated deal doesn't cost you anything extra to close out cleanly.

That matters because RaiderX's whole model is built around letting agents keep 100% of their commission for a flat monthly fee, instead of a traditional split. Paperwork like earnest money releases is exactly the kind of routine-but-important task that shouldn't require an assistant, a stack of PDFs, or a call to the office — it should just be fast.

Every RaiderX agent also has access to dedicated broker support for exactly the kind of judgment calls this form can raise — when a release situation gets complicated, you have someone to ask before your client signs anything. If you're evaluating sponsorship options and want to see how the numbers and the tools compare, visit /compare, review /pricing, or start an application at /apply.