Earnest Money Overview


Deposit to Escrow

Earnest Money is provided by the Buyer to the Seller to show how earnest they are about completing the sale. In Colorado it is often 1% of the list price for the home but can vary.

There are two ways the earnest money can be delivered: with the offer (in-hand) or after the offer is accepted.

The money is held in escrow. The terms of the contract specify the escrow-holder. Often this is the company which will be closing the transaction, but it can also be held by either the Buyer’s Brokerage or the Seller’s Brokerage.


Release from Escrow

What happens to the money depends on what happens in the transaction.

In a successfully closed sale, it is credited back to the Buyer as part of what they pay for the property.

If the transaction does not successfully close, well, see § 4.3.2 of the CBS(R) along with other relevant clauses.

Sometimes, depending on the contract terms, all or a portion of the Earnest Money might be non-refundable, either immediately or in a stepped fashion as certain things occur during the transaction.