3 Important Aspects to a Colorado Contract To Buy and Sell
- There has to be a written contract between the buyer and seller.
- It must be signed by all parties.
- Something of value – generally earnest money – is held in trust during the contract period. Occasionally in lieu of funds, a promissory note will suffice.
Will they cash the check?
Yes. Home buyers need to be prepared their earnest money check to be deposited immediately. The funds should be held in a Trust account at the Title Company or in the Listing brokerage’s Trust account. Bouncing your earnest money check is very bad. It can be considered breach of contract, and in the current Topsy turfy Boulder Sellers market, could cost you your dream home.
How Much Is The Earnest Money Check?
The seller determines the preferred amount of the earnest money check at the time of the listing. Like anything else in a contract, this is negotiable. In Boulder, it is common to see amounts ranging from 1 percent of the purchase price to tens of thousands of dollars. There is no set amount required in Colorado.
What happens to my earnest money? Will I get it back?
Your earnest money check will be deposited and held in trust until closing or the contract terminates. Provided the buyer does not break the contract placing the earnest money in jeopardy, the funds will be disbursed as part of the closing and applied to the home buyer’s down payment and/or closing costs. Any extra funds will then be returned to the buyer unless otherwise agreed to in writing by Buyer and Seller.
Recommended Boulder Real Estate News Blogs By Realtor Bob Gordon
- Home ownership benefits me how?
- Buying versus renting
- Understanding the closing process (not by Bob !)
- Final Walk Through before you close on your new home!
- What is the final Lien Affidavit?