Worried about how much earnest money to put down in Denver, and what happens if a deal falls apart? You are not alone. When you write an offer in Colorado, your earnest money shows the seller you are serious, and it can be protected or at risk depending on your contract and deadlines. In this guide, you will learn typical amounts in Denver, the key Colorado timelines that control refunds, and clear steps to keep your deposit safe. Let’s dive in.
What is earnest money
Earnest money is a buyer’s deposit that shows good faith and ties your offer to a signed contract while you complete inspections, appraisal, financing, and title review. In Colorado, what happens to your deposit is defined by your purchase contract, most often the Contract to Buy and Sell Real Estate created by the Colorado Association of REALTORS. If the deal closes, your earnest money is usually credited to your closing costs or down payment. If the deal does not close, the refund or forfeiture depends on the specific contingencies and whether you met the written deadlines and notice rules in your contract.
For an overview of how real estate funds are handled in Colorado, you can review the Colorado Division of Real Estate’s consumer resources at the Colorado Division of Real Estate. For background on the standard forms used in Denver, see the Colorado Association of REALTORS forms and guidance.
Typical amounts in Denver
There is no single required amount in Denver. Market practice often falls around 1 to 3 percent of the purchase price, with flat amounts on lower-priced homes still common. The exact number depends on price point, market conditions, and your risk tolerance.
- Entry-level homes: often 1,000 to 5,000 dollars.
- Mid-range (about 400,000 to 800,000 dollars): commonly around 1 percent, or a few thousand dollars.
- Higher price points: 1 percent or more, and up to 3 percent in competitive situations.
Quick examples
- 350,000 dollar home: 1,500 to 5,000 dollars.
- 550,000 dollar home: about 5,500 dollars (around 1 percent) or 7,500 dollars to strengthen your offer.
- 1,200,000 dollar home: 12,000 dollars (1 percent) to 36,000 dollars (3 percent) when competition is high.
A larger deposit can help your offer stand out, but only put down what you can afford to risk if you choose to waive protections.
Who holds your deposit
In Denver, earnest money is most often held by a neutral title company or escrow agent named in your contract. The Colorado Association of REALTORS forms include spaces to name the holder and state when you must deposit the funds. Avoid giving earnest money directly to a seller. A neutral holder follows the contract and only releases funds based on written instructions, closing documents, or a court order if there is a dispute.
Key contract deadlines in Colorado
Colorado contracts use clearly labeled deadline boxes for each contingency. If you terminate in writing before a valid deadline based on that contingency, you usually recover your earnest money. If you miss a deadline, you can lose the contractual right to a refund and may be in default.
- Earnest money deposit deadline: You must deliver the deposit to the named holder within the time stated in the contract.
- Inspection period and objection deadline: You can inspect the home and either accept, negotiate repairs, or terminate in writing by the deadline.
- Appraisal deadline: If your contract includes an appraisal contingency, you can act before the deadline if value or terms are not acceptable.
- Financing or loan commitment deadline: If you cannot obtain financing and provide notice by this date, you can usually terminate and recover your deposit.
- Title objection deadline: If title concerns are not resolved and you terminate on time, your deposit is typically refunded.
- Closing date and cure periods: Once contingencies expire, failure to close can trigger default rules that let the seller keep your earnest money or pursue other remedies as allowed by the contract.
Deadlines to watch
- Earnest money deposit deadline
- Inspection and inspection objection deadline
- Appraisal deadline (if included)
- Financing or loan commitment deadline
- Title objection deadline
- Closing date
Tip: Termination must be in writing and delivered by the deadline. An oral notice or late email is not enough.
How to protect your earnest money
Protecting your deposit is about strong contract terms, good documentation, and strict timing.
Before you make an offer
- Align on strategy with your agent, including amount, contingencies, and timing.
- Choose a deposit amount that supports a strong offer but fits your risk tolerance if you limit protections.
In the contract
- Name a neutral title or escrow company as the holder of funds.
- Include clear deadlines for inspection, appraisal, financing, and title that your lender and inspector can meet.
- Confirm written notice and delivery procedures for objections and termination. The standard Colorado forms include these, but double-check timing and method.
- Understand that waiving protections reduces your ability to get your money back.
Deposit mechanics and records
- Make your check payable to the named title or escrow company and get a written receipt with date and amount.
- If wiring funds, follow the escrow company’s instructions and obtain confirmation of receipt.
- Keep copies of canceled checks, wire confirmations, and escrow receipts.
During the contingency periods
- Schedule inspections early so you have time to respond before the deadline.
- Stay current on lender requests to hit the loan commitment date.
- Put repair agreements or credits in writing as formal amendments.
If you need to terminate
- Deliver written termination before the applicable deadline and save proof of delivery.
- Ask the title or escrow company what they need to release the funds and provide documents quickly.
If a dispute arises
- Review the contract’s dispute resolution section and contact your agent or an attorney.
- Be aware that title companies often hold funds until they receive joint written instructions, an interpleader, or a court order.
For consumer guidance on escrow and trust accounts in Colorado, the Colorado Division of Real Estate is a helpful reference. For contract structure and deadline names, see the Colorado Association of REALTORS resources.
Common disputes and outcomes
- You terminate on time under a valid contingency: deposit is normally refunded.
- You miss a deadline or give improper notice: seller may keep the deposit as damages or pursue other remedies allowed by the contract.
- Seller cannot deliver clear title: buyer may be entitled to return of deposit and possibly other remedies.
- Both sides agree in writing to end the deal: deposit is released as agreed.
- Parties disagree on release: funds may remain in escrow until there are joint instructions or a court or arbitration decision.
Denver buyer tips
- Plan your inspection and loan milestones backward from the listed deadlines to give yourself cushion.
- If you offer a larger deposit to stand out, consider keeping key protections in place or tightening timelines instead of waiving them altogether.
- Ask for an escrow summary from the title company that explains how they treat deposit release.
- Keep communication in writing and save all emails and receipts.
Ready for next steps
You deserve a smooth offer process, clear guidance on risk, and strong negotiation that protects your deposit while keeping your offer competitive. If you want a plan tailored to your price point and timeline in Denver County, we are here to help. Start a conversation with Norris4Homes - John & Steven to align earnest money strategy, deadlines, and offer terms with your goals.
FAQs
What is earnest money in Colorado and is it refundable?
- Earnest money is a good-faith deposit applied at closing, and it is refundable if you terminate in writing under a valid contract contingency by the stated deadline.
How much earnest money should a Denver buyer expect to pay?
- Many buyers offer around 1 to 3 percent of the price, with flat amounts common on lower-priced homes and higher percentages used in competitive situations.
Who holds earnest money in a Denver home purchase?
- A neutral title company or escrow agent named in your contract usually holds the funds and releases them only under the contract’s written instructions or a legal order.
How do I get my earnest money back if I terminate in Colorado?
- Deliver written termination before the applicable contingency deadline and follow the escrow company’s release process, keeping proof of delivery and copies of all documents.
What happens to earnest money if the seller defaults in Colorado?
- If the seller cannot meet contract obligations such as delivering clear title, you may be entitled to return of your deposit and other remedies as allowed by the contract.
Is it risky to waive appraisal or inspection to win a home in Denver?
- Waiving protections can strengthen an offer but reduces your ability to recover earnest money, so weigh the risk carefully with your agent before limiting contingencies.
