Buying in Fort Collins and Larimer County and hearing a lot about earnest money? You are not alone. You want to write a strong offer without risking more than you need to. In a few minutes, you will know what earnest money is, how it is handled in Colorado, typical amounts in Fort Collins, and how to protect your deposit with smart timelines and contingencies. Let’s dive in.
Earnest money basics in Colorado
Earnest money is a good faith deposit you provide once your offer is accepted. It signals commitment to the seller and is held in escrow while the deal moves forward. If you close, the deposit is credited to your cash to close.
In Colorado, the contract names an escrow agent to hold the funds in a trust account. This is commonly a title company or, in some cases, a brokerage. State rules require proper handling of trust funds, so always confirm the named escrow holder and get a written receipt when you deliver the deposit. You can review trust account and licensing guidance from the Colorado Division of Real Estate.
Who holds your deposit
Your contract will identify the escrow agent that holds the earnest money. In Northern Colorado, a title or escrow company is most common. Ask for wire instructions directly from the escrow holder and verify them by phone before sending funds.
If you ever have a question about timing or release, your agent and the escrow company can help you follow the steps in your signed contract. For form and practice context, see resources from the Colorado Association of REALTORS.
Typical Fort Collins amounts
There is no single rule for how much to offer. Many buyers use about 1 to 3 percent of the price or a flat amount such as $1,000 to $10,000, depending on price point. In multiple offer situations, some buyers choose higher deposits, such as 3 to 5 percent, to strengthen the offer.
Local practice varies by neighborhood, price band, and how competitive that week’s market feels. Ask your agent to check recent accepted offers for the same type of property to see what sellers are expecting in your submarket. For a broad national explainer on how earnest money works, review this guide from Realtor.com.
Contract timelines and deadlines
Colorado’s standard purchase contracts include specific deadlines that control when you may object or terminate and keep your earnest money. The contract often requires you to deliver the deposit to escrow within a short window, commonly about three business days after acceptance. Exact deadlines are negotiable, so read your dates closely.
Key deadlines typically include inspection, appraisal, loan approval, title review, and closing. Colorado forms are time sensitive, and notice procedures matter. For timing norms and form guidance, see the Colorado Association of REALTORS.
Key deadlines to watch
- Inspection objection deadline
- Appraisal deadline
- Loan approval or loan objection deadline
- Title review and cure deadlines
- Closing date
When money is refundable
Your earnest money is usually refundable if you terminate properly before a contingency deadline. Common refundable scenarios include inspection objections you cannot resolve, a low appraisal you do not wish to bridge, financing denial within the loan deadline, or title defects the seller cannot cure.
To protect your refund rights, follow the contract’s notice requirements exactly and send written termination by the deadline. Keep copies of every notice and your escrow receipt.
When money is at risk
Your deposit may be at risk if you default after contingency deadlines or if you back out without a valid contractual reason. Some Colorado contracts include a liquidated damages clause that allows the seller to keep the earnest money if the buyer defaults. If there is a dispute about who gets the funds, the escrow agent will usually hold the money until you reach a mutual release or follow the dispute resolution steps in your contract.
For general state oversight of trust funds and brokerage conduct, see the Colorado Division of Real Estate. For broader buyer and seller resources, the National Association of REALTORS provides consumer guides you may find helpful.
Nonrefundable tactics in bids
In very competitive situations, some buyers make a portion of their earnest money nonrefundable after the inspection period or after certain contingencies are removed. This can make your offer more attractive to a seller.
Use this carefully. A nonrefundable clause increases your financial risk if the deal falls apart for a buyer reason later. If you consider this move, weigh the tradeoff and confirm the exact language in the contract before you sign.
Sample buyer timeline
Every deal is different, but here is how timelines often look in Fort Collins:
- Earnest money delivery: within 1 to 5 days after acceptance, often about 3 business days
- Inspection period: about 5 to 10 days from acceptance
- Appraisal deadline: often within the loan timeline
- Loan approval deadline: about 21 to 30 days
- Closing: about 30 to 45 days from acceptance
Quick buyer checklist
- Confirm the escrow holder and delivery method. Get a written receipt.
- Ask your agent for recent accepted offer norms for your neighborhood and price range.
- Calendar all deadlines. Missed dates can waive protections.
- Send notices in writing per the contract. Save confirmations.
- Coordinate with your lender to hit appraisal and loan dates.
- Keep records of every receipt, amendment, and email.
Fort Collins market notes
Fort Collins and the broader Northern Colorado corridor shift between cooler and more competitive periods. In walkable corridors and newer developments with strong demand, sellers may expect larger deposits or tighter inspection and financing windows. If the home is likely to face appraisal risk, plan your appraisal strategy early and understand how it interacts with your earnest money.
Get guidance before you offer
A right-sized earnest deposit, paired with smart deadlines, can help you win without taking on unnecessary risk. You deserve local, real-world advice based on current accepted offers in your exact submarket. If you want a clear plan before you submit, connect with Meagan Griesel for neighborhood-level guidance and a buyer strategy that fits your goals.
FAQs
How does earnest money work for Fort Collins buyers?
- It is a good faith deposit held in escrow, credited to you at closing, and governed by your Colorado contract’s deadlines and contingencies.
How much earnest money should I expect to put down?
- Many buyers use about 1 to 3 percent of price or a flat amount such as $1,000 to $10,000, with higher sums in competitive situations.
Who holds my earnest money in Colorado?
- A title or escrow company named in the contract usually holds it in a trust account and provides a receipt when funds are received.
When can I get my earnest money back?
- If you terminate properly within inspection, appraisal, loan, or title deadlines, your deposit is typically refundable under the contract.
Can the seller keep my earnest money if I back out?
- If you default after deadlines or without a valid contractual reason, the seller may keep the deposit, especially if a liquidated damages clause applies.
What if there is a dispute about my deposit?
- The escrow agent usually holds the money until there is a mutual release or the dispute is resolved through the contract’s mediation or other process.
