Is your offer in Highland about to get serious? Earnest money is the small but mighty part of your contract that signals you mean business. It can strengthen your offer in a competitive Denver market, and it can also be at risk if timelines slip. You want clarity before you wire a dollar. In this guide, you will learn local norms for amounts and timing, how Colorado contracts treat refunds and disputes, and what you can do to protect your deposit while still writing a strong offer. Let’s dive in.

What earnest money is

Earnest money is a good-faith deposit you agree to deliver when your offer is accepted. In Colorado, it is applied toward your down payment and closing costs if the transaction closes. The amount, the deadline to deliver it, and how it can be refunded are all negotiated in the purchase contract that uses standardized Colorado forms.

Those Colorado forms outline how escrow works and what happens if a dispute arises. They also describe potential seller remedies if a buyer defaults, which can include liquidated damages that put your deposit at risk. Your exact protections come from the version and clauses agreed to in your signed contract.

Typical amounts in Highland

There is no single “right” number in Highland. Local practice varies by price, competition, and the seller’s strategy. Use ranges as a guide, then tailor your amount to the home and current neighborhood activity.

• Lower competition or lower price tiers: a flat deposit of about $1,000 to $5,000, or roughly 0.5 to 1 percent of the price.
• Typical Highland activity: many buyers offer about 1 to 2 percent of the purchase price.
• Highly competitive or upper-tier listings: 2 to 3 percent or higher can make an offer stand out, though you should balance that with your risk tolerance.

For lower-priced homes, buyers often choose a flat dollar deposit like $2,500 to $10,000. In tighter inventory or multiple-offer situations, expect sellers to prefer larger deposits and faster timelines. Ask your agent to share recent Highland comps and what won in multiple-offer rounds last week, not last month.

When your deposit is due

Your contract should spell out the exact due date and where to deliver funds. In many Denver deals, the custom is to deposit within 24 to 72 hours after final acceptance. Title companies and brokerages are set up to receive a wire or certified funds and will issue a receipt.

Because timing is negotiable, confirm the deadline when your offer is drafted. If you need a little extra time to move funds, make sure that is written into your contract. Always get a written confirmation from the escrow holder once your deposit is received.

When it is refundable

The Colorado contract gives you defined windows to investigate, secure financing, and confirm value. If you terminate within those windows and follow the notice steps in the contract, your earnest money is typically refundable.

• Inspection contingency: You usually have a negotiated inspection period, often 7 to 10 days in many Denver offers. If you object and cannot reach a resolution, you can terminate within the deadline and receive a refund.
• Financing contingency: If your loan is not approved per contract terms and you terminate before the financing deadline, commonly 21 to 30 days, your deposit is generally refundable.
• Appraisal contingency: If the appraisal is low and the contract allows termination or renegotiation, you can end the deal within the deadline and preserve your deposit.
• Title and survey: Significant, unresolved title defects can be grounds for timely termination and refund under the contract.

Once those contingencies expire or are waived, your protection narrows. If you terminate without a contractual right or default after deadlines, the seller may be entitled to keep the deposit as damages, depending on your contract language.

Who holds the funds

Earnest money is held in escrow until closing or lawful disbursement. In Denver, a title or escrow company most commonly holds the funds, though the listing broker or buyer’s broker trust account can also serve as the holder. The escrow agent follows the contract’s instructions for receipt, notice, and release of funds.

Ask for deposit instructions in writing, and confirm the account details by phone at a known, verified number before you send money. Never rely only on email for wire instructions.

How disputes are handled

Colorado forms include an escrow dispute clause that describes how a release works. In most cases, the escrow holder needs a mutual written release from both parties to disburse funds. If the parties disagree, the funds will remain in escrow until there is a resolution through mediation, arbitration, a court order, or a written agreement between buyer and seller.

Keep documentation that supports your position. Inspection reports, lender denial letters, and your written termination notice can be important if a dispute arises.

Safety and wire tips

Wire fraud is a real risk. Protect your deposit with a few simple habits.

• Verify all wiring instructions by calling the title company using a trusted phone number from their website or your agent’s introduction. Do not use a phone number only listed in an email.
• Confirm the exact account name and number before sending funds. Send a small “test” wire only if the title company requests and supervises it.
• Never send funds to an individual’s personal account. Escrow funds should go to a title company or brokerage trust account.
• Get a confirmation of receipt the same day. Keep that record.

Offer strategies for Highland buyers

You can write a stronger offer without taking on unnecessary risk. Think about your risk comfort and move thoughtfully.

• Increase the deposit modestly: A slightly higher earnest money amount can show seriousness, especially near the median price.
• Pair a strong pre-approval with your offer: A detailed lender letter or proof of funds can matter as much as deposit size.
• Shorten, but do not rush, key deadlines: A 5 to 7 day inspection window can appeal to sellers if you have inspectors ready. Confirm your lender timeline before you tighten financing dates.
• Stage the deposit: Consider an initial smaller deposit within 24 to 72 hours, then an additional amount after a milestone like inspection resolution. Spell out both deposits and dates in the contract.
• Avoid blanket waivers: Limit or remove contingencies only if you can truly accept the risk of losing your deposit.

A simple timeline

Use this quick flow to track what affects your deposit.

1. Contract acceptance: Deliver earnest money by the stated deadline, often within 1 to 3 business days. Get a receipt.
2. Inspection period: Book inspectors day one. Decide to object, negotiate, or terminate within the inspection deadline.
3. Appraisal and financing: Work closely with your lender. If the appraisal is low or financing stalls, act before the applicable deadlines.
4. Pre-closing: Once contingencies are satisfied or waived, your deposit is more exposed if you default. Confirm you are clear to close.
5. Closing: Funds are applied to your down payment and costs. Celebrate your new home.

Examples you can picture

• Inspection example: You discover significant roof issues. You submit a timely inspection objection. If you and the seller cannot reach a resolution and you terminate before the deadline, your deposit is generally refunded.
• Financing example: Your loan is denied the day after the financing deadline because you waited to notify your lender of a job change. If you did not terminate before the deadline, the seller may claim your deposit.

Final thoughts for Highland buyers

In Highland, deposit expectations move with the market. Ranges like 1 to 2 percent are common, but competitive listings can push higher. Your advantage is a smart contract structure, clear timelines, and disciplined execution. Set dates you can meet, keep your documentation tidy, and verify wires every time.

If you want local eyes on your strategy, we are here to help. For a neighborhood-driven plan that balances offer strength and protection, reach out to Wayne Keith. Start a Neighborhood Consultation.

FAQs

What is earnest money in a Colorado home purchase?

• It is a good-faith deposit that shows you intend to complete the purchase, held in escrow and applied to your down payment or closing costs at closing.

How much earnest money is typical in Highland, Denver?

• Many buyers offer about 1 to 2 percent of the purchase price, with lower tiers sometimes using $1,000 to $5,000 and competitive or upper-tier situations going 2 to 3 percent or more.

When do I have to deposit earnest money in Denver?

• Your contract sets the date, and the local custom is to deliver it within 24 to 72 hours after acceptance, with a receipt from the escrow holder.

Can I get my earnest money back if I terminate?

• Yes, if you terminate within a valid contingency period, such as inspection, financing, appraisal, or title, and you follow the contract’s notice requirements before the deadline.

Who holds earnest money in a Highland purchase?

• Typically a title or escrow company holds the funds, though the listing or buyer’s brokerage trust account may also serve as the escrow holder per the contract.

What happens if the seller and I disagree about the deposit?

• The escrow agent will usually keep funds in escrow until both parties sign a release or a mediation, arbitration, or court order instructs how to disburse them.

Is it safe to wire earnest money?

• Yes, if you verify wiring instructions by phone using a trusted number, send only to an escrow or brokerage trust account, and obtain immediate confirmation of receipt.

Can I split the earnest money into two deposits?

• Yes, staged deposits are negotiable and must be clearly described in the contract with amounts, dates, and any conditions for the second deposit.