How much earnest money should you put down in Denver, and how do you keep it safe? When you are competing for a home, that first deposit can feel like a big leap. You want a strong offer without risking funds you may need later. In this guide, you will learn typical Denver deposit amounts, how Colorado contracts protect you, and the exact steps to avoid forfeiting money. Let’s dive in.
Earnest money basics
Earnest money is your good‑faith deposit after a seller accepts your offer. It shows you are serious and counts toward your cash to close at settlement. In Colorado, most buyers use the Colorado Real Estate Commission contract, which spells out who holds the funds, key contingencies, and what happens if a deal ends. Whether you get your deposit back depends on the contract language and your compliance with deadlines.
How much to offer in Denver
In many Colorado transactions, buyers put up 1 to 3 percent of the price as earnest money. In practice, Denver buyers often use flat dollar amounts that align with price tier and competition.
Entry‑level and condos
For lower‑priced condos and townhomes, deposits often range from $1,000 to $5,000. Sellers may accept smaller amounts in slower segments. Your exact number should still feel meaningful to the seller while staying comfortable for you.
Mid‑market single‑family
For many Denver single‑family homes, $5,000 to $15,000 is common, which often lands near the 1 to 3 percent guideline. The right figure depends on neighborhood demand and how your offer compares to others.
Luxury and competitive offers
In a hot listing or a true seller’s market, buyers sometimes increase deposits to 2 to 5 percent or use larger flat amounts such as $10,000 to $25,000. Higher‑price properties scale up case by case. Your agent can help weigh a larger deposit against other ways to strengthen an offer.
Who holds it and when to deliver
Your contract will name the escrow holder. In Denver, funds are commonly placed with a neutral title or escrow company, though a brokerage can also hold them. Expect to provide a cashier’s check or send a wire; personal checks may be accepted but certified funds are often preferred. The contract sets a firm delivery deadline, typically within a few business days after acceptance, and you should receive a written receipt.
Contingencies that protect your deposit
Contingencies are your safety net. If you act within the contract timelines, you can cancel for covered reasons and recover your money.
Inspection contingency
You will investigate the property’s condition and either move forward, negotiate, or terminate. Buyers typically have about 5 to 10 business days to complete inspections and deliver written objections or a notice to terminate. If you end the deal within that window under the contract rules, your earnest money is usually refunded.
Financing and appraisal
A financing contingency protects you if you cannot obtain your loan on agreed terms. Timelines often run 21 to 30 days, but the exact dates are whatever you negotiate. Appraisal can be tied to financing or handled separately. If the appraisal comes in low and you have kept this protection, you may renegotiate or cancel and recover the deposit.
Title and HOA review
You will review the title commitment, recorded exceptions, and, if applicable, HOA documents. These deadlines are often short, sometimes 3 to 7 days to object. A timely written objection preserves your right to terminate and receive a refund if issues are not cured.
Deadlines and notices matter
Colorado contracts often say time is of the essence. That means a missed deadline can cost you protections. Put every date on your calendar as soon as your offer is accepted. Deliver any required notices in writing and within the stated time window. Phone calls are not enough.
How you could lose it
If you change your mind after contingency deadlines pass, you may default and the seller could keep the earnest money as liquidated damages. If you waive financing or appraisal protections and your loan falls through or the appraisal is short, your deposit is at risk. Always review what protections you are keeping before you sign or remove any contingency.
How to get it back if a deal ends
If you terminate under a valid, timely contingency, the escrow holder refunds your deposit under the contract procedures. If the seller defaults, your deposit is typically returned and you may have additional remedies. If there is a dispute, the funds usually stay in escrow until both parties sign a release, complete mediation or arbitration if required, or a court orders disbursement. Keep every receipt, email, and notice to support your position.
Smart Denver buyer checklist
- Choose a deposit that is meaningful but not catastrophic if lost, often 1 to 3 percent of price.
- Name a neutral title or escrow company in the contract and get a written deposit receipt.
- Confirm every deadline for inspection, appraisal, financing, title, and HOA review, then calendar them immediately.
- Get full preapproval to strengthen your financing contingency.
- Book your professional inspection right away and send written objections on time if needed.
- If the appraisal is low, follow the contract path: renegotiate, bring cash, or terminate if protected.
- Verify wire instructions by calling a known phone number for the title company. Never rely on email alone.
- If you terminate under a contingency, send the proper notice and request release of funds per the contract.
Real Denver scenarios
- Scenario A: You deposit $10,000. During a 7‑day inspection window you discover major roof issues and send written objections on time. The parties do not agree on repairs, so you terminate per the inspection contingency and the escrow holder returns your deposit.
- Scenario B: To compete, you waive financing. Later your loan is denied. Without financing protection, you risk forfeiting the earnest money and the seller could claim damages.
- Scenario C: The appraisal is short, but your appraisal protection is intact. You ask for a price reduction; the seller declines. You terminate within the deadline and receive a refund of the deposit.
Avoid wire fraud
Before wiring funds, call the title or escrow company using a verified phone number to confirm instructions. Do not act on wiring changes sent by email. Keep your bank wire receipt and request a deposit confirmation from escrow. If something feels off, pause and verify again.
Ready to buy with confidence
With the right deposit, clear deadlines, and preserved protections, you can write a strong Denver offer without putting your earnest money at unnecessary risk. If you want help crafting a competitive strategy and keeping your funds safe, reach out to Lane Lyon for a personal consultation.
FAQs
How much earnest money do Denver buyers usually put down?
- Many Denver buyers offer 1 to 3 percent of the price, or a flat amount such as $5,000 to $15,000 for mid‑market homes, adjusted for property type and competition.
Who holds my earnest money in Colorado?
- The contract names the holder, often a neutral title or escrow company; a brokerage can also hold funds, and you should get a written deposit receipt.
When is earnest money due after my offer is accepted?
- The Colorado contract sets a delivery deadline, commonly within a few business days; missing it can jeopardize the deal, so send funds early and confirm receipt.
Which contingencies protect my earnest money in Denver?
- Inspection, financing, appraisal, title review, and HOA document review are common protections if you act within deadlines and send required written notices.
Can I lose earnest money if I waive financing or appraisal?
- Yes, if you waive these protections and the loan fails or the appraisal is short, your deposit is at risk; keep protections unless you fully understand the trade‑offs.
What happens if the seller backs out in Colorado?
- If the seller defaults, your deposit is typically returned under the contract, and you may have additional remedies depending on the situation and contract terms.
