By Prerna Kapoor, CLHMS | REAL Brokerage | June 6, 2026
Earnest money is one of those parts of buying a home where the numbers feel arbitrary until they’re not. You put it down to show a seller you’re serious. If everything goes well, it rolls into your down payment at closing. If something goes sideways, the rules around when you get it back, and when you don’t, can cost you thousands.
I’ve been on both sides of this with clients this spring. One buyer in Aurora got every dollar back after walking away during inspection. Another in Castle Pines lost the full deposit because of a deadline that quietly passed while they were waiting on a lender. Same contract, very different outcomes.
Here’s what Colorado buyers should actually know about earnest money in 2026, including how much to put down, when it’s protected, and the mistakes I keep seeing cost people real money.
What Earnest Money Is (and Isn’t) in Colorado
Earnest money is a good-faith deposit you pay shortly after a seller accepts your offer. In Colorado, it’s typically wired or delivered to the title company or the seller’s brokerage within 1 to 3 business days of mutual contract acceptance.
It’s not a fee. It’s not extra money on top of the purchase price. At closing, it gets credited toward your down payment and closing costs. You see it line-item on your Closing Disclosure as “Deposit” or “Earnest Money.”
What trips buyers up is thinking of earnest money as a separate cost. It’s not. It’s a portion of what you were going to pay anyway, just paid earlier so the seller knows you’re committed.
How Much to Put Down in 2026
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The Colorado Real Estate Commission’s standard contract doesn’t dictate an amount. It’s negotiable. But the market sets expectations, and right now along the Front Range I’m seeing patterns by price point.
For homes under $500,000, earnest money is usually $5,000 to $10,000. For homes in the $500,000 to $1 million range, expect $10,000 to $25,000. Above $1 million, deposits often run 1% to 3% of the purchase price, sometimes higher in competitive luxury segments like Cherry Creek or Castle Pines Village.
If you’re in a multiple-offer situation, going higher on earnest money can strengthen your offer without raising your price. It signals confidence and shifts some risk back onto you. That’s a real tradeoff and worth thinking through carefully, not just doing because someone said to.
If your offer is on a home that’s been sitting, you have more room to keep earnest money modest. A motivated seller is usually more focused on getting under contract than on the deposit size.
When You Get Your Earnest Money Back
The Colorado contract has built-in contingencies that protect your deposit if certain things don’t work out. The big ones to know:
Inspection objection. If you discover something during the inspection period that you can’t resolve with the seller, you can terminate and get your earnest money back. The deadline is usually 5 to 10 days after mutual acceptance.
Loan objection. If your lender can’t get you to clear-to-close terms that meet what’s in the contract, you can terminate. The loan objection deadline is set in the contract, often 25 to 35 days after acceptance.
Appraisal objection. If the home doesn’t appraise for the agreed price and you can’t reach a new agreement with the seller, your deposit is protected. Appraisal deadlines are typically around 25 to 28 days in.
Title objection. If the title commitment shows issues you can’t accept, you can walk. This deadline is usually a few days after you receive the title commitment.
The key word in all of these is deadline. Colorado’s contract operates on a timeline, and if you blow past a deadline without terminating in writing, your contingency dies and your earnest money is at risk.
When You Don’t Get It Back
This is where people lose real money. Here’s where I see deposits go to the seller:
You change your mind after all contingencies have passed. Once your inspection, loan, appraisal, and title deadlines are behind you, the deal is effectively locked in. Walking away at that point is a default, and the seller can keep your earnest money. I’ve seen buyers do this when they got cold feet, found a home they liked better, or had a relationship change. The reason doesn’t matter to the contract.
You miss a deadline by even one business day. The contract doesn’t care that you were going to terminate. It cares that you didn’t terminate by the deadline. I’ve watched a $15,000 deposit go to a seller because a buyer’s lender wanted “just a couple more days” and no one filed the loan objection in time.
You can’t close on the closing date and don’t have a legitimate contingency to fall back on. Buyer’s remorse, job changes, or family pressure don’t count as legal reasons to terminate.
Mistakes I Keep Seeing
A few patterns from this year’s transactions worth flagging:
Waiting too long to wire earnest money. The contract typically requires delivery within 1 to 3 business days. Buyers who delay because they’re “still moving money around” can trigger a default that gives the seller termination rights before you’ve even started the inspection clock.
Wiring to the wrong account. Wire fraud is real in Colorado real estate, and earnest money is a prime target. Always call the title company at a number you looked up yourself (not from an email) to verify wire instructions before sending. Colorado lost millions to wire fraud in 2025 alone.
Treating the contract deadlines as flexible. They’re not. Your agent should track them, but you should also know what they are. Put them in your calendar with reminders 48 hours ahead.
Not understanding what “in writing” means for objections. A text to your agent doesn’t terminate the contract. A formal Notice to Terminate or Inspection Objection has to be signed and delivered to the seller by the deadline. Verbal conversations don’t count.
What to Do Before You Write an Offer
If you’re getting close to making an offer in 2026, here’s what I’d want a buyer to think through first:
Know how much earnest money you can comfortably afford to have tied up for 30 to 45 days. It comes back at closing or in a termination, but it’s not liquid while you’re under contract.
Have a serious conversation with your lender about what your loan timeline actually looks like. The contract loan deadline should match what your lender can realistically deliver, not what sounds good on paper.
Read the contract before you sign it. Not the executive summary your agent emails. The actual contract. Understand the dates you’re agreeing to. If something doesn’t make sense, ask before you sign, not after a deadline has passed.
Pick a real estate agent who tracks deadlines obsessively and will pick up the phone the day before a deadline to walk through your options. The cost of an inattentive agent on this part of the process can be your entire deposit.
The Bottom Line
Earnest money isn’t a fee. It’s a credit toward your purchase that signals you’re serious. Colorado’s contract has strong contingencies that protect your deposit when something goes wrong with the home, the loan, the appraisal, or the title. What it doesn’t protect against is missing a deadline or changing your mind after contingencies have passed.
If you understand the timeline and have an agent who’s tracking it with you, earnest money is rarely a problem. It’s when no one’s paying attention to the dates that buyers lose real money.
If you’re thinking about writing an offer this summer and want to walk through what your deposit might look like, I’m always happy to talk through it. No pressure, no pitch.
Prerna Kapoor | REALTOR® | Luxury Home Specialist
REAL Brokerage | 720-949-5450 | info@prernakapoor.com
CLHMS • RENE • PSA • ABR | International Sterling Society Award Winner
Prerna specializes in residential real estate across Parker, Aurora, Lone Tree, Castle Pines, Highlands Ranch, Cherry Creek, Greenwood Village, and Centennial. She speaks English, Japanese, and Hindi.
