Buying in Washington Park can move fast. If you are staring at a blank “earnest money” line on an offer, it is normal to wonder how much to put down and what happens to that money if things go sideways. You want a strong offer without taking on more risk than you need.
In this guide, you will learn what earnest money is, typical deposit ranges in Wash Park, how the funds are held and protected, what happens if a contract terminates, and the timelines a skilled agent sets to keep you safe. You will also see a simple, real‑world structure you can use when you write your next offer. Let’s dive in.
Earnest money basics
Earnest money is your good‑faith deposit that shows you are serious about buying a home. If you close, the deposit is credited toward your purchase price or closing costs. It is not an extra fee.
In Colorado, earnest money lives inside the written purchase contract. The terms in that contract control when the deposit is refundable, when it can be forfeited, and how it is handled. A neutral third party, usually a title company, holds the funds in an escrow or trust account until closing or until the contract says they can release it.
Local norms in Wash Park
Washington Park is a high‑demand Denver neighborhood, and earnest money expectations often rise with competition. While every deal is unique, these ranges are common starting points:
- Lower competition: about 1 to 2 percent of the price, or a flat $1,000 to $5,000 on lower‑priced homes.
- Multiple offers or high demand: $5,000 to $20,000, or 2 to 5 percent of the price to stand out.
- Cash or investor offers: deposits can be higher, and some terms may be negotiated as non‑refundable.
Exact expectations shift with market conditions like inventory and interest rates. The right number for you should balance offer strength with your risk tolerance and current local activity.
How funds are held
Who holds the money
In Denver deals, a title company typically escrows the earnest money. Less often, a brokerage trust account holds it. Title escrow is preferred because it is a neutral third party with clear procedures.
When you deliver
Contracts commonly require delivery within 24 to 72 hours after both sides sign. You will usually send a wire transfer, a cashier’s check, or occasionally a personal check if the escrow policy allows it. Timely delivery matters because late funds can create a contract breach.
How it is protected
Your deposit sits in a trust account until closing or until a valid release condition occurs. The purchase contract spells out when the deposit is refundable and when it may be forfeited. If buyer and seller disagree, the escrow holder will keep funds in trust until there is a mutual written release or an order from mediation, arbitration, or a court.
If a deal terminates
Refund scenarios
You will typically receive your earnest money back if you terminate within a valid contingency period and follow the contract’s notice rules. Common examples include:
- Inspection: you terminate by the inspection deadline after reviewing reports.
- Financing: your loan is not approved by the financing deadline, and you provide required documentation.
- Appraisal: the appraisal does not support the price and you terminate under the allowed clause.
- Title: there is an unresolved title issue and you terminate within the title review and cure windows.
When the seller may keep it
If you miss a deadline or default after contingency periods expire, the seller may be entitled to keep the earnest money as liquidated damages, subject to the contract’s remedies. Whether the seller keeps the funds depends on the contract language and the facts of the default.
Documentation and process
To avoid disputes, send all termination notices in writing by the stated deadlines and keep proof of delivery. Keep inspection reports, lender denial letters, appraisal reports, and any title communications. Title companies typically require a written direction or mutual release before they disburse earnest money.
Typical timelines in Denver
Local practice varies by deal and lender, but these ranges are common in Washington Park contracts:
- Earnest money deposit due: 24 to 72 hours after contract acceptance.
- Inspection period: 3 to 10 days, often shorter in competitive offers.
- Appraisal ordered and received: usually inside the financing window, often 7 to 21 days after order.
- Financing or loan approval deadline: 14 to 30 days, depending on loan type and lender.
- Title review and cure: buyer review commonly 7 to 14 days from contract, with cure periods set by the agreement.
- Closing date: often 30 to 45 days from contract for financed purchases. Cash can be sooner.
A protective structure that works
Here is an example of how a skilled agent might structure your deadlines so your earnest money stays protected while your offer remains competitive. Adjust the lengths to fit the specific home and your lender:
- Earnest money amount: choose a number that matches market intensity, often 1 to 2 percent in calmer settings and 2 to 5 percent when competition is strong.
- Deposit delivery: require delivery to the title company within 24 to 48 hours of acceptance to show seriousness.
- Inspection window: target 5 calendar days. This gives you a fast read on condition while keeping a strong offer profile.
- Appraisal contingency: include it, and tie it to the financing timeline with a short cure period to renegotiate or terminate if value is low.
- Financing deadline: set 21 to 30 days with clear documentation standards for a denial letter if needed.
- Title review: set 7 days to review the Title Commitment and raise objections, plus a defined cure period.
- Notice procedures: require all termination or objection notices in writing, delivered per the contract, and copied to the title company to speed any refund.
- Calendar control: put every deadline in a shared calendar with reminders so nothing slips.
Buyer checklist to protect your deposit
- Read your contract’s contingency and notice sections before you sign.
- Wire earnest money only after confirming instructions by phone with the title company at a known number.
- Book inspection immediately and review the report well before the deadline.
- Ask your lender to order the appraisal promptly and to update you on turn times.
- Keep records: inspection reports, emails, delivery confirmations, and lender letters.
- If in doubt about a deadline, send written notice early and confirm receipt.
Seller tips on earnest money
- Look at both amount and structure. A higher deposit helps, but tight, realistic deadlines often signal stronger performance.
- Confirm timing. A 24 to 48 hour deposit and a short inspection period can reduce downtime if a buyer terminates.
- Evaluate financing strength. A clear financing timeline with quick appraisal ordering reduces uncertainty.
Wire safety for deposits
Wire fraud is a real risk. Before sending any funds:
- Call the title company at a verified phone number to confirm wiring instructions.
- Do not rely only on email for wire details.
- After sending, confirm receipt with the title company the same day.
A quick verification call can save you from a costly mistake.
When you plan your Washington Park offer with the right earnest money and clear deadlines, you give the seller confidence and keep your risk in check. If you want help tailoring these details to a specific home and today’s market conditions, reach out to Stephen LaPorta for calm, data‑driven guidance.
FAQs
How much earnest money is typical for Washington Park buyers?
- Many buyers start around 1 to 2 percent of the price or $1,000 to $5,000 on lower‑priced homes, and increase to $5,000 to $20,000 or 2 to 5 percent in multiple‑offer situations.
Is earnest money refundable if I cancel a Denver home contract?
- Yes if you terminate within a valid contingency period and follow the contract’s notice rules. After contingencies expire, the seller may be entitled to the funds.
Who holds earnest money in Denver transactions?
- A neutral title company usually escrows the funds. Sometimes a brokerage trust account holds them, but title escrow is the common choice.
When is earnest money due after an offer is accepted?
- Colorado contracts often require delivery within 24 to 72 hours after acceptance. The contract controls the exact deadline.
What proof do I need to get my earnest money back?
- Provide timely written termination and any required documents, such as an inspection report or lender denial letter, plus proof of delivery per the contract.
Does earnest money apply to my down payment at closing?
- Yes. Your deposit is credited toward your down payment or closing costs according to the contract.
