Earnest money is the buyer’s demonstration that the offer is serious. In Colorado it is also the thing clients ask about most, usually phrased as “do I lose my deposit?” — and the honest answer is always “it depends on which deadline we are past”.
What earnest money is
It is a deposit made with the offer, credited to the buyer at closing. It is not a fee, and it is not the seller’s money while the contract is alive — it sits with a neutral holder named in the contract until the transaction either closes or terminates.
Who holds it
The contract names the Earnest Money Holder. In most Colorado residential transactions that is the title or closing company; sometimes it is the listing brokerage. The distinction matters, because it determines who you deliver to and who issues the receipt that belongs in your file.
- Confirm the named holder off the accepted contract, not off the original offer
- Deliver by the deadline the contract sets
- Get a written receipt and file it on the transaction
- If a counterproposal changed the amount or the holder, the accepted version wins
When it is due
Often with the offer itself. Where it is not, the Dates and Deadlines table carries an Alternative Earnest Money Deadline — a specific row for exactly this case. It is one of the earliest dates in the transaction and one of the easiest to let slide in a busy week.
| Deadline | Commonly used interval |
|---|---|
| Time of Day Deadline | A time of day, not a date. |
| Alternative Earnest Money Deadline | 3 days after contract date |
How much is normal
There is no required amount. It is negotiated, and in practice Colorado sellers read the number as a signal of how committed the buyer is — a larger deposit strengthens an offer in a competitive situation, and a small one invites questions. What matters legally is not the size but what the contract says happens to it.
What happens when a contract terminates
This is the part worth being precise about, and also the part where a page like this one should refuse to be the authority. The contract sets out the circumstances under which earnest money is returned to the buyer or paid to the seller, and the answer turns on how and when the contract ended:
- A buyer who exercises a right the contract gives them, within the deadline for that right, is in a very different position from one who simply stops performing.
- A buyer who lets a contingency deadline pass without acting has generally used up that right.
- Termination has its own mechanics in the contract, including notice — ending a contract is a step you take, not a state you drift into.
The deadlines that actually protect the deposit
In practice a buyer’s deposit is protected by the contingency deadlines being exercised properly and on time. These are the ones that come up most:
| Window | What the buyer has to do | The form |
|---|---|---|
| Inspection | Object, or use the separate termination right, by its own deadline | NTC43 |
| Title | Object to record or off-record title within the objection window | TON45 |
| Appraisal | Object on value within the appraisal objection window | AVN44 |
| Loan | Act on the loan-related deadlines that apply to the financing | — |
| Association documents | Review and act within the documents termination deadline | — |
| Property insurance | Act by the insurance termination deadline | — |
Disputes
When both sides claim the deposit, the holder is generally not in a position to simply hand it to whoever asks most firmly. Expect the holder to require written agreement from both parties or to follow the process the contract and their own obligations set out. The practical lesson for an agent is upstream: paper every termination properly and keep the written record, because a clean file is what resolves these quickly.
Keeping it clean in Nexus
Nexus holds the earnest money holder as a real party on the transaction, keeps the receipt with the deal rather than in a thread, and puts the alternative earnest money deadline on the same timeline as everything else. Every contingency deadline that protects the deposit is tracked, and Orbit raises the emails that touch them.
Questions
It depends on how and when the contract ends. The contract provides specific rights with specific deadlines, and a buyer who exercises one properly is in a very different position from one who does not. It is a contract question, not a rule of thumb.
Whoever the contract names as the Earnest Money Holder — commonly the title or closing company, sometimes the listing brokerage.
There is no required figure; it is negotiated. In a competitive Colorado market a larger deposit is read as a stronger commitment, which is why the amount is strategy rather than law.
Yes — at closing it is credited to the buyer, so it is part of what they were going to pay, not an extra cost.