Not sure how much earnest money to put down on a Durango home? You are not alone. This small but important deposit can help you win the house, and it can also be at risk if you miss key deadlines. In a fast-moving market like Southwest Colorado, you want clear steps to protect your funds while staying competitive.
In this guide, you will learn what earnest money is, typical Durango amounts, who holds the funds, contract deadlines, and when you can get your deposit back. You will also get practical strategies tailored to La Plata County. Let’s dive in.
Earnest money basics in Colorado
Earnest money is your good-faith deposit that shows a seller you are serious about buying. If you close, it is applied to your purchase price. If the deal ends, the contract decides whether the deposit is refunded or forfeited.
In Colorado, the deposit is usually held by a neutral escrow holder. That is most often a title company or, in some cases, a brokerage escrow account. The contract names the holder and spells out how the funds are delivered.
Escrow holders generally will not release funds without a written agreement signed by both parties or a court order. If there is a dispute, the escrow holder may keep the funds in place until a joint release is signed or a court or contract remedy decides who gets the money.
Typical Durango amounts
Local practice in Durango and La Plata County often falls within these ranges:
- Common range: 1–2% of the purchase price or a flat 2,000–10,000 dollars on many single-family homes.
- Entry-level homes: flat deposits toward 1,000–5,000 dollars are common.
- Higher-priced or mountain/second-home properties: sellers often expect 2–3% or more.
- Multiple-offer situations: buyers sometimes go higher, 3–5% or a larger flat sum, to show strength.
Market conditions matter. Durango can have tight inventory, especially for mountain properties, which can push deposits higher. Work with your agent to confirm what is typical for your price point this season.
Who holds it and how you deliver it
Your contract should name the escrow holder and the delivery method. In Southwest Colorado, that is usually a title company.
- Deliver the funds per the contract, often by wire or cashier’s check. Avoid carrying large cash.
- Verify wiring instructions directly with the title company to prevent wire fraud.
- Get a dated receipt and written confirmation that funds were deposited into the escrow account.
Escrow holders generally require written instructions from both parties or a court order before releasing funds if there is a dispute.
Key Colorado contract deadlines
Most residential offers use Colorado Real Estate Commission (CREC) contract forms. Your contract controls the exact dates, but these timeframes are common in local negotiations:
- Earnest money delivery: often within 1–3 business days after mutual acceptance.
- Inspection period: often 7–15 days. Ten days is common in many negotiations.
- Financing or loan deadline: often 21–30 days, depending on lender timing.
- Appraisal deadline: usually tied to financing. Contracts outline what happens if the appraised value is short.
- Title, HOA, and survey deadlines: typically 7–14 days each, as filled in on the contract.
Many provisions require timely written notice to preserve your rights. If you plan to terminate under a contingency, give written notice by the deadline and follow the delivery method in the contract.
When you usually get it back
Buyers typically receive a refund of their earnest money when they:
- Properly terminate within a contingency period in the contract, such as inspection, financing, title, or HOA review.
- Receive a written loan denial within the contract timeline and give notice as required.
- Face a seller default or the seller cannot deliver clear title.
- Sign a mutual written release with the seller.
Keep proof of every notice you send and any supporting documents, such as inspection reports or lender letters.
When it may be forfeited
The seller may have a claim to keep the earnest money if the buyer defaults after contingencies expire and the seller elects a remedy allowed by the contract. Examples include:
- You fail to close or miss a required notice or deadline after protections have lapsed.
- You breach the contract and the remedy selected allows the seller to retain the deposit as liquidated damages.
Even if a seller claims your deposit, disputes can be negotiated. Escrow usually will not release funds without a written agreement or court order, and the holder may interplead the funds if claims conflict.
Durango strategies to stay competitive and safe
You can strengthen your offer without taking on unnecessary risk. Consider the following:
- Pair a strong deposit with protections. Larger earnest money can help in competitive situations, but keep core contingencies unless you understand the risk.
- Use an appraisal gap approach rather than waiving the appraisal. You can agree to cover a specific shortfall amount if the appraisal misses the price, while keeping a ceiling on your exposure.
- Keep inspection periods efficient. A 7–10 day inspection window can be competitive while giving you time for professional reviews.
- Align your financing timeline with your lender. Confirm how long they need for underwriting and appraisal so you can meet the contract dates.
Local conditions shift with seasonality. During peak recreation seasons and for unique mountain homes, sellers may expect larger deposits or tighter timelines. Ask your agent what is common for your property type right now.
Protect your funds: handling and documentation
Treat documentation like a safety net. The more organized you are, the better your position if there is a disagreement.
- Deliver the deposit on time and obtain a receipt.
- Send notices in writing and to the exact addresses or emails listed in the contract.
- Save inspection reports, lender denial letters, and email delivery confirmations.
- Verify wire instructions by calling the title company. Do not rely solely on email.
What to confirm in your offer
Before you sign, make sure your contract clearly states:
- Earnest money amount, escrow holder, and delivery instructions.
- Exact deadlines for earnest money delivery, inspection, financing, appraisal, title/HOA, and closing.
- The default remedies selection. Understand whether liquidated damages or other remedies apply.
- Notice methods you must use for objections or termination.
- How appraisal shortfalls are handled and your options to cure or terminate.
- Any source-of-funds requirements for larger deposits and anti-fraud steps.
Quick buyer checklist
- Get a strong lender pre-approval and confirm realistic timelines.
- Choose an earnest money amount you can afford to risk if protections lapse.
- Name the title company in the contract and confirm delivery instructions.
- Deliver your deposit on time and get a receipt.
- Track all contingency deadlines and send required notices before they expire.
- Keep all supporting documents in one folder.
- Ask your agent before waiving key protections or offering an unusually large deposit.
Local takeaways for La Plata County
- Expect 1–2% or 2,000–10,000 dollars on many single-family homes, with higher percentages for luxury and second-home properties.
- Multiple offers can push deposits and shorten timelines. Balance strength with safeguards.
- Title companies in Durango are the common escrow holders. Get wired funds confirmed and documented.
Buying in the San Juans should be exciting, not stressful. With clear timelines, tight documentation, and a smart offer strategy, you can compete for the right home and protect your earnest money at the same time. If you want help crafting a confident plan for your price point and property type, connect with Holly Matson to talk strategy and next steps.
FAQs
How much earnest money should I put down in Durango?
- Many buyers offer 1–2% of the price or 2,000–10,000 dollars on typical homes, with higher percentages for luxury or unique mountain properties. Your agent can tailor the amount to current competition.
When do I have to deliver the earnest money in Colorado?
- Delivery is set by your contract. In many local deals, funds are due within 1–3 business days after acceptance. Meet the exact written deadline on your signed contract.
Who holds my earnest money in La Plata County?
- Usually a title company acts as escrow holder. Some deals use a brokerage escrow account. Your contract should name the holder and give delivery instructions.
If my inspection finds issues, do I get my deposit back?
- You may, if you terminate or resolve the issue within the inspection timeline and follow the contract’s written notice rules. Keep copies of your inspection report and all notices.
What if my loan is denied?
- If financing is a contingency, you typically must provide timely written notice and a lender denial within the contract deadline to preserve a refund of your earnest money.
Can a seller keep my earnest money if I change my mind?
- If you terminate outside of contract protections or miss deadlines, the seller may claim the deposit under the contract’s remedies. Your exact rights depend on the signed agreement.
How are disputes over earnest money handled?
- Escrow holders usually keep funds in place until there is a joint written release or a court or contract process decides. They may interplead funds if claims conflict.
What documents should I keep to protect my refund rights?
- Save your deposit receipt, inspection reports, lender denial letters, and all emails or delivery confirmations showing timely notices sent per the contract.
