You worked hard to get an offer accepted. Now the clock starts, and missing a date could put your earnest money at risk. If you feel unsure about what each deadline means or how earnest money works in Denver, you are not alone.
This guide walks you through the essentials of earnest money, who holds it, common Colorado deadlines, and what can happen if timelines slip. You will see practical examples, a buyer checklist, and clear next steps tailored to Denver and Denver County. Let’s dive in.
Earnest money in Denver: the basics
Earnest money is a deposit you make when your offer is accepted to show good faith. The seller takes the home off the market while you complete inspections, financing, and other due diligence. If you close, this deposit is credited to your purchase funds.
In Colorado, the contract names who holds the deposit. It is often a title or settlement company, sometimes a broker’s licensed trust account. These funds must be handled according to the written contract instructions and state rules. The holder keeps detailed records and only releases money as directed by the contract or a final agreement.
The contract controls if and when your earnest money is refundable. Your protections come from contingencies and from sending notices on time.
How much to expect in Denver
There is no law that sets the amount. The size of the deposit is negotiated in your offer. In slower markets, deposits can be smaller. In recent competitive Denver conditions, buyers often offer around 1% to 3% of the purchase price, and sometimes more when multiple offers are in play.
A larger deposit can strengthen your offer, but it increases risk if you miss a deadline. Balance offer strength with your comfort level, and make sure your contingency dates match your needs.
The dates that control your deposit
Colorado contracts typically measure deadlines in calendar days, unless the contract says otherwise. Most timelines start at mutual acceptance, which is the date when all parties sign and final acceptance is delivered under the contract’s delivery rules.
Here are the key dates to track:
Earnest money delivery deadline
Your deposit is due within the number of days stated in the contract, often within 1 to 3 business days in Denver. If you miss this deadline, the seller may treat it as a default. Some sellers allow a quick cure if there is no harm to them, but that is not guaranteed.
What to do:
- Deliver funds promptly by the approved method.
- Get a written receipt that shows the date, amount, and holder.
- Send the receipt to your agent right away.
Inspection deadline and right to terminate
You have a set window to complete inspections and send a written objection or termination. In Denver, buyers commonly have 7 to 10 days, but this is negotiable. If you miss the objection deadline and do not cancel in time, you may lose the right to terminate for inspection reasons.
What to do:
- Schedule inspections within the first 48 hours after acceptance.
- Share reports quickly and decide on repairs, credits, or termination.
- Send your written notice before the deadline.
Loan and financing deadline
This is the date by which you must secure loan approval under the contract terms. Timelines often run 21 to 30 days, depending on lender speed and underwriting.
If you do not have a commitment by the deadline, your earnest money may be at risk unless you obtain a written extension. If delays are due to lender processes, document everything and act early.
What to do:
- Provide documents to your lender immediately.
- Pay the appraisal fee early so the appraisal can be ordered.
- If delays arise, request a written extension before the deadline.
Appraisal timing
In many Colorado deals, appraisal concerns flow through the financing contingency rather than a stand-alone appraisal contingency. If the appraisal comes in low, you may bring more cash, renegotiate with the seller, or terminate under financing terms if allowed by your contract.
What to do:
- Confirm how your contract treats appraisal issues.
- Coordinate with your lender to order the appraisal quickly.
- Decide early how you would handle a low appraisal.
Closing date and cure periods
Your contract sets a specific closing date. If a party cannot close as agreed, the contract may provide options like cure periods or extensions. If a buyer fails to close and is in default, the seller can typically claim the earnest money as liquidated damages, subject to contract terms.
What to do:
- Track closing requirements with your lender and title company.
- Confirm your final cash to close and wire instructions early.
- If an issue arises, request a written extension before the date.
What happens if you miss a deadline
The escrow holder must follow the contract’s written instructions. They do not release funds unless both parties agree in writing, or there is a binding order or outcome under the contract’s dispute process.
Common outcomes include:
- A short extension. If you act quickly, both parties may sign a written amendment to extend the deadline. This preserves your protections.
- Seller claim of default. The seller may issue a notice and can choose to accept a late cure or terminate. If the contract allows, the seller can seek the earnest money as damages.
- Dispute over the deposit. If parties disagree, the escrow holder will hold funds until there is a signed release or a dispute outcome. The holder may start an interpleader so a court can decide.
If you suspect mishandling of trust funds, preserve records and consult your agent and appropriate authorities. That type of conduct is prohibited under Colorado rules.
Practical steps if you are running late:
- Notify the other side in writing as soon as possible.
- Request a written extension, signed by both parties.
- Keep proof of lender or inspector delays that were outside your control.
- Follow the contract’s termination steps if you decide to cancel, and obtain a signed mutual release.
A simple Denver timeline example
Every contract is different, yet this sample can help you picture the flow:
- Day 0: Mutual acceptance.
- Days 0 to 3: Earnest money due to the named holder.
- Days 0 to 7 or 10: Inspection period and objection deadline.
- Days 10 to 21 or up to 30: Financing deadline, appraisal typically ordered and completed during this window.
- Day 30 to 45: Closing date, as negotiated.
Use calendar reminders for each deadline and plan decisions two days early to avoid last-minute stress.
Buyer checklist to stay on track
- Review all contract deadlines on Day 0 and add them to your calendar.
- Deliver earnest money fast and get a written receipt.
- Book inspections within 48 hours of acceptance.
- Send inspection objections or termination in writing before the deadline.
- Provide all lender documents immediately and pay the appraisal fee early.
- Confirm appraisal scheduling and status with your lender.
- Track the loan commitment date and request extensions in writing if needed.
- Keep copies of emails, reports, and notices.
- Verify final cash to close and closing logistics one week before closing.
Strategy tips for competitive Denver offers
- Strengthen your offer carefully. A larger or faster deposit and shorter deadlines can help in multiple offers, but increase your risk. Know your comfort level.
- Protect inspection flexibility. Tight windows are common, but you still need enough time to complete key inspections.
- Align financing with reality. Pre-underwriting and quick appraisal ordering help you meet the financing date.
- Negotiate what you need. If you are relocating or need more time, ask for slightly longer contingencies. The seller may counter, and that is part of the process.
How a local advisor keeps you protected
In Denver and Jefferson County, details and timing drive outcomes. You deserve a hands-on guide who tracks every date, anticipates lender and appraisal timing, and negotiates extensions when needed. A clear process protects your earnest money and keeps your purchase on schedule.
With a service-first approach and negotiation-led contract management, you can move from acceptance to closing with confidence. If you want calm, proactive guidance in West Denver and the Jeffco corridor, you are in the right place.
Ready to talk through your timeline and next steps? Connect with Brian Grace to start a clear plan that protects your deposit and gets you home.
FAQs
How much earnest money is typical in Denver?
- There is no fixed amount. In recent Denver markets, buyers often offer about 1% to 3% of the price in competitive situations, though amounts are negotiable.
Who holds my earnest money in Colorado?
- The contract names the holder, often a title or settlement company, sometimes a broker’s licensed trust account, and funds are handled under strict state rules.
What if I miss the inspection deadline in Denver?
- You may lose the right to cancel for inspection reasons, which can put your deposit at risk if you later try to walk. Ask for a written extension immediately.
What happens if my loan is delayed past the deadline?
- Without a written extension, your earnest money may be at risk. Document lender delays and request an extension in writing before the financing date.
Is there a separate appraisal contingency in Colorado?
- Often appraisal issues are covered under the financing contingency rather than a separate clause. Check your contract to understand your options if the appraisal is low.
Can my real estate agent hold the deposit?
- Agents can hold funds only in an approved trust account and as the contract allows. Many buyers prefer a neutral title or escrow holder.
What if the seller and I disagree about the deposit?
- The holder keeps funds until there is a signed release or a dispute outcome under the contract. The holder may file an interpleader so a court can decide.
Are Colorado contract deadlines calendar days or business days?
- Most residential contracts use calendar days unless the contract states otherwise. Always verify your specific contract language.
