Buying a home in Golden should feel exciting, not confusing. Yet the moment you write an offer, one question pops up fast: how much earnest money should you put down, and how do you keep it safe? If you understand what earnest money is, how Colorado contracts work, and which deadlines matter most, you can write a strong offer without taking on unnecessary risk. In this guide, you’ll learn the essentials for Golden and Jefferson County, plus simple steps to protect your deposit from day one. Let’s dive in.
Earnest money basics in Colorado
Earnest money is a good faith deposit you give when your offer is accepted. It shows the seller you are serious. The funds sit in a trust or escrow account, then apply to your down payment or closing costs when you close.
If the deal ends for a valid reason in your contract, you may get the deposit back. If you default without a contract‑based reason, the seller may be entitled to the funds. Your signed contract controls those outcomes.
Typical amounts in Golden
In many U.S. markets, a common range is 1% to 3% of the purchase price. In metro Denver and Jefferson County, including Golden, competitive homes can push deposits higher. On a $500,000 home, 1% is $5,000. In a multiple‑offer situation, buyers sometimes offer $10,000 to $25,000 or more, based on price and competition.
What you choose depends on price point, how competitive the listing is, your financing, and which contingencies you plan to keep. Larger deposits can strengthen your offer, but they also increase your risk if you miss a deadline.
Who holds the deposit
Colorado transactions typically use the Colorado Association of REALTORS Residential Contract to Buy and Sell Real Estate. In that contract, you name who receives the earnest money. It is commonly the title or escrow company that will handle closing. Sometimes a listing broker or buyer’s broker holds it in a trust account.
All escrow holders follow Colorado Real Estate Commission rules for client funds. The money stays in trust until closing or until the parties agree in writing to release it, or a contract or court decision directs a release.
Deposit timing and delivery
Your contract sets the deadline for delivering the deposit. Many deals aim for prompt delivery, often within 1 to 3 business or banking days after acceptance. The exact number in your contract controls.
Plan your payment method before you sign. Wires move fastest. Cashier’s checks are common but can take time to deliver and clear. Confirm the recipient’s instructions, deliver by the contract deadline, and get written confirmation of receipt.
Contingencies that protect you
Common contingencies give you a right to terminate and get your earnest money back if used on time and in writing.
Inspection contingency
You can inspect the property and request repairs or terminate within your inspection period. To protect your deposit, send written notice before the deadline in the contract.
Financing contingency
If you cannot secure your loan by the financing deadline, you may be able to terminate and get your deposit refunded. Follow the notice requirements in the contract.
Appraisal contingency
If the appraisal comes in below the purchase price and your financing depends on it, you often can renegotiate or terminate by the appraisal deadline. Put any decision in writing.
Title and HOA document review
You get time to review the title commitment and, if applicable, HOA documents. If you find unacceptable issues, the contract can let you terminate by the stated deadline. Again, deliver written notice on time.
Deadlines and notice
Your contract will spell out each deadline. Protect your deposit by tracking these dates:
- Earnest money delivery date
- Inspection objection and termination deadlines
- Appraisal deadline and related notice dates
- Financing or loan commitment deadline
- Title and HOA document review deadlines
To preserve your rights, send any notice in writing before the deadline. Email can work if the contract allows it, but confirm receipt. Verbal updates are not enough. Keep copies of everything.
Default, disputes, and remedies
If a buyer wrongfully defaults, a liquidated damages clause in the Colorado contract may allow the seller to keep the earnest money as the seller’s remedy when that option is selected in the contract. If that clause is not selected, the seller could seek other damages. Whether a default occurred depends on the contract terms and the facts.
If the seller defaults, you can seek return of the deposit and may pursue other contract remedies. If there is a dispute about who gets the funds, the escrow holder will typically hold the money until both sides instruct them in writing, a contract dispute process is followed, or a court orders a release.
Competitive strategies in Golden
In a hot Golden listing, sellers look for strong, clean offers. Here are ways buyers often compete:
- Larger earnest money to signal commitment
- Shorter deadlines when you can meet them
- Limited requests after inspection, focused on health or safety
Balance strength with protection. If you increase your deposit or shorten deadlines, understand the risks and plan how you will meet each requirement on time.
Local tips for Golden and JeffCo
- Condos and HOAs: Build in enough time to review HOA documents. Some associations respond slowly. A realistic review window helps protect your deposit.
- Foothill or rural properties: Extra due diligence can include septic, well, wildfire risk, or geological checks. Set an inspection period that fits those needs.
- Title and closing logistics: Many buyers use a reputable title company to hold earnest money and coordinate closing. Jefferson County offices handle recording and public records at closing, while your deposit remains in escrow until the deal closes or ends.
Payment and wire safety
- Use secure, traceable methods like bank wire or cashier’s check.
- Verify wiring instructions directly with the title company using a phone number you obtain from a trusted source. Do not rely on email alone.
- Get written confirmation of receipt from the escrow holder.
Step by step: Protect your deposit
- Before the offer
- Discuss a smart earnest money amount with your agent, based on current Golden competition and your risk tolerance.
- Decide which title or escrow company will hold the funds and include it in your contract.
- Confirm how you will deliver the deposit and how long your bank requires.
- Right after acceptance
- Calendar all deadlines in the contract. Share them with your lender and agent.
- Send the earnest money by the contract deadline. Get a written receipt.
- During due diligence
- Order inspections quickly and review reports as soon as they arrive.
- If issues arise, send written notice by the inspection deadline.
- Monitor appraisal and loan milestones. If you need to terminate, send written notice before the deadline.
- If something changes
- If you cannot meet a deadline, talk with your agent about an amendment before the date passes.
- If a dispute emerges, notify your agent and the escrow holder. Follow the contract’s dispute process.
- At closing
- Review the settlement statement. Your earnest money should apply to your down payment or closing costs.
Common scenarios and how to handle them
- Multiple offers: Increase your earnest money only if you can meet all deadlines and are comfortable with the risk. Consider tightening timelines you control, like inspection scheduling, rather than giving up key protections.
- Low appraisal: If your loan relies on the appraisal and value comes in low, use the appraisal contingency by the deadline. You can renegotiate price or terminate under the contract’s terms.
- HOA concerns: If HOA documents reveal fees or rules you cannot accept, use your document review contingency before the deadline and deliver written termination.
Final thoughts
A clear plan for earnest money helps you compete in Golden while keeping your deposit safe. Decide on the right amount, choose a trusted escrow holder, and track every deadline. Use contingencies wisely, send notices in writing, and keep records of all steps. With the right approach, you can write a strong offer and move to closing with confidence.
If you want a local strategy for earnest money and offer terms tailored to Golden and Jefferson County, reach out to Wesley Charles. Buy With Us · List With Us.
FAQs
What is earnest money in Colorado real estate?
- It is a good faith deposit that shows you are serious, held in escrow and applied to your down payment or closing costs if you close.
How much earnest money is typical in Golden, CO?
- Many buyers start around 1% to 3% of the price. Competitive homes can lead to larger deposits based on price and demand.
Who holds earnest money in a Colorado home purchase?
- The contract names the holder, often a title or escrow company, or sometimes a broker’s trust account.
When is earnest money due after offer acceptance in Colorado?
- Your contract sets the deadline. Many deals target delivery within 1 to 3 business or banking days, but the written date in the contract controls.
Which contingencies protect my earnest money in Colorado?
- Common ones are inspection, financing, appraisal, and title or HOA review, as long as you deliver written notice before each deadline.
What happens to my earnest money if I default as a buyer?
- If you default without a contract‑based reason, the seller may be entitled to the deposit, especially if a liquidated damages clause was selected in the contract.
How do escrow disputes over earnest money get resolved in Colorado?
- The escrow holder usually keeps the funds until both parties agree in writing, the contract’s dispute steps are followed, or a court orders distribution.
Can I wire earnest money safely for a Golden, CO purchase?
- Yes, use verified instructions from the title company, confirm by phone using a trusted number, and get written confirmation of receipt.
