When a buyer makes an offer on a home, they typically include earnest money — a deposit that shows they’re serious about purchasing. Think of it as putting some “skin in the game.”

How Much Is It?

• In Colorado, earnest money is usually 1% to 3% of the purchase price, though it can vary.

• On a $600,000 home, that means $6,000 to $18,000.

Where Does It Go?

• It’s held in a trust or escrow account, not given directly to the seller.

• If the deal closes, it gets applied toward the buyer’s down payment or closing costs.

When Do You Risk Losing It?

Earnest money is generally refundable — if the buyer follows the contract’s contingency timelines. A buyer may lose it if:

• They walk away after contingencies are resolved

• They miss inspection, financing, or appraisal deadlines

• They simply change their mind without a contractual reason

Why Sellers Care

For sellers, earnest money provides confidence. It weeds out casual offers and shows the buyer is committed to moving forward.

Why Buyers Benefit

Putting down earnest money makes your offer more competitive, especially in multiple-offer situations. It tells the seller: “I’m serious, and I’m financially prepared.”