Originally published September 7, 2022. Colorado real-estate contracts and forms change. This educational overview is not legal advice and does not determine the rights or remedies in any transaction.
Earnest money can be an important part of a residential offer, but it is not a shortcut to a predetermined result. For a Colorado sale, the signed contract, its notices and deadlines, any amendments, and the applicable closing or escrow instructions govern the transaction. A seller should review those documents with the professionals involved before deciding what to request or sign.
The Colorado Division of Real Estate publishes current Commission-approved contracts and forms. Its current residential contract warns that it has important legal consequences and that parties should consult legal, tax, or other counsel before signing. Use the version and addenda appropriate to the actual transaction; a general article cannot supply a clause or replace a contract review.
Identify the earnest-money amount, delivery method, deadline, and the party designated to hold funds. Confirm the relevant instructions with the closing or escrow professional named in the transaction. Do not assume that depositing a check, releasing funds, or changing instructions is appropriate because it was common in another deal. The written agreement and the closing professional’s process matter.
Read the executed contract and every signed amendment together. The practical task is to identify outstanding conditions, deadlines, required notices, and any documented extensions or resolutions. Avoid characterizing a provision as a “loophole” or assuming a missed date automatically gives either side a particular remedy. If the parties disagree about a contingency, performance, notice, or deposit, pause and obtain transaction-specific guidance.
A failed or delayed closing can involve facts and documents that are unique to the transaction. The disposition of earnest money is not determined by a simple rule that one party “keeps” it. Sellers should review the signed documents with their broker and closing professional, and seek advice from a qualified Colorado real-estate attorney when a legal interpretation, dispute, release, or remedy is involved. Do not sign a release, amendment, or other instruction until you understand what it does.
Mountain Rose Realty can help sellers organize the property and transaction questions for their broker and closing team. For legal interpretation or a deposit dispute, consult a qualified Colorado real-estate attorney. To discuss selling a Telluride-area property, contact Mountain Rose Realty.
