Buying in Denver often moves fast. You may find a home you love on Friday and need to write by Saturday. In the rush, one line in your contract can feel confusing: the earnest money deposit. If you understand how it works, you can write a stronger offer and protect your cash at the same time. This guide shows you the Denver norms, key deadlines, refund rules, and simple steps to keep your deposit safe. Let’s dive in.

What earnest money is

Earnest money is a good‑faith deposit that goes with your offer to show the seller you are serious. It is not an extra fee. If you close, the deposit is applied to your down payment or closing costs. If you do not close, the contract rules decide whether you get it back.

In Denver, the deposit helps your offer stand out, especially when homes draw multiple offers. Sellers look for both a fair price and signs you will perform. Earnest money is one of those signs.

How much in Denver

There is no legal minimum in Denver. Common practice is either a few thousand dollars on lower‑priced homes or roughly 1 percent to 3 percent of the purchase price. In hot conditions, buyers sometimes offer more or agree that some or all of the deposit becomes non‑refundable after certain dates. The right number depends on price point, market temperature, seller expectations, and your comfort with risk.

A quick example

For a $600,000 Denver home: 1 percent equals $6,000 and 2 percent equals $12,000. Buyers and agents often use this range when planning an offer. If the market is very competitive, your strategy may include a higher amount or tighter timelines.

Who holds it and when you pay

Your contract will name the escrow holder. In Denver‑area practice, the deposit usually goes to a neutral third party such as a title or escrow company, a closing attorney, or a brokerage trust account. You should receive a written receipt confirming the deposit.

Delivery is time‑sensitive. Many Denver offers set a short deadline for deposit delivery, often 24 to 72 hours after the contract is signed. Always follow the contract timeline and only send funds using the written instructions from the named escrow holder.

When your deposit is refundable

Colorado contracts commonly used in Denver include several contingencies with clear deadlines. If you follow the process and act on time, you can usually terminate under a contingency and receive your earnest money back.

Inspection contingency

If you submit a written inspection objection by the deadline and the parties cannot reach an agreement on repairs or credits, you can typically terminate and keep your deposit. Missing the deadline can be treated as acceptance of the property condition.

Appraisal contingency

If the appraisal comes in below the contract price and you object by the appraisal deadline, you may be able to terminate and keep your deposit. If you waive the appraisal contingency, you accept more risk.

Financing contingency

If you cannot obtain financing and you notify the seller in writing by the financing deadline as the contract requires, the deposit is usually refundable. Lender timelines matter, so coordinate closely and request extensions in writing if needed.

If you waive protections

If you waive inspection, appraisal, or financing protections, or you agree that earnest money becomes non‑refundable after a set date, you take on more risk of losing the deposit if the deal fails. Make sure that risk fits your situation.

Denver deadlines to track

Deadlines control your rights. Put these dates on your calendar the day your offer is accepted.

• Earnest money delivery date and time
• Inspection objection deadline
• Appraisal objection deadline
• Financing deadline
• Title review and other contract‑specific dates
• Closing date

If you need more time, ask for a written extension before the deadline. Silence after a deadline can remove your protections, even if your concern is valid.

If a deal falls through

Escrow holders follow the contract. Here is what usually happens.

• If you close: Your earnest money is applied to your closing costs or down payment.
• If you terminate under a contingency or by mutual agreement: Escrow returns the deposit according to the instructions.
• If there is a dispute: Many title companies require a signed mutual release to disburse funds. If the parties do not agree, the escrow holder may keep the funds in trust until it receives a court order or files an interpleader.

In some contracts, a seller may elect to keep the deposit as liquidated damages if the buyer defaults. Exact rights depend on the signed contract. If there is conflict, involve your agent and consider legal counsel.

Protect your deposit: smart strategies

You can write a compelling offer without taking on unnecessary risk. Try these steps.

• Choose a reasonable amount. Aim for local norms that show you are serious without overexposing you.
• Keep key contingencies until you are comfortable removing them. Most buyers keep inspection, appraisal, and financing protections early on.
• Track every deadline. Put reminders on your phone and share with your lender and agent so everyone is aligned.
• Get receipts. Ask escrow for written confirmation that your funds were received and are held in trust.
• Communicate in writing. Submit objections and notices before the deadline and keep copies.
• Consider deposit timing. Some buyers structure an initial amount with a prompt increase, if the seller agrees and the contract allows. Make sure every amount and date is written into the contract.

Offer strength without extra risk

You can improve acceptance odds even if you do not waive protections.

• Pair your earnest money with a strong pre‑approval and clear proof of funds.
• Use clean timelines and realistic dates that your lender can meet.

This approach shows the seller you are prepared and reduces the chance of missing a deadline that could put your deposit at risk.

Buyer checklist

• Verify the earnest money amount and delivery deadline in the signed contract.
• Confirm the escrow holder and send funds only to the named party using its instructions.
• Calendar inspection, appraisal, financing, and title deadlines.
• Submit any objections or notices in writing before each deadline.
• Keep copies of all receipts and communications.
• If a dispute arises, coordinate with your agent and the escrow company right away.

Ready to buy in Denver

When you know how earnest money works, you can make confident choices in any market. With the right plan, your deposit can make your offer stronger and still stay protected. If you are weighing how much to offer or when to remove contingencies, get local guidance tailored to your goals.

Have questions about your offer strategy or deposit timelines? Let Kerri Dowling help you navigate Denver contracts with clarity and confidence.

FAQs

How much earnest money do Denver buyers usually put down?

• There is no legal minimum. Common practice is a few thousand dollars or about 1 percent to 3 percent of the price, adjusted for market conditions and your risk tolerance.

Who holds the earnest money in a Denver purchase?

• A neutral third party named in the contract, such as a title or escrow company or a brokerage trust account, and you should receive a written receipt.

Can I get my earnest money back after a bad inspection in Denver?

• Yes, if you submit a written inspection objection by the deadline and terminate under the contract when no agreement is reached on repairs or credits.

What happens if the seller refuses to release my earnest money?

• Many escrow companies require a signed mutual release to disburse funds. Without agreement, the escrow holder may retain funds until a court order or interpleader.

Do Denver MLS rules require a set earnest money amount?

• No. MLS fields display information but do not mandate amounts. The deposit is negotiated between buyer and seller in the contract.