Trying to buy or sell in Denver with a contingent offer on the table? You are not alone. Contingencies can protect you, yet they also shape how competitive your offer looks to the other side. When you understand Colorado’s due diligence approach and how local timelines work, you can negotiate with clarity and confidence.

This guide breaks down what a contingent offer really means in Denver, how Colorado contracts handle due diligence, the most common contingencies, typical timelines, and smart ways to strengthen your position. Let’s dive in.

Contingent offers in Denver

A contingent offer means your contract depends on certain conditions being met. In Colorado, most residential deals rely on standardized forms and well-defined timelines for due diligence, financing, appraisal, title, and HOA review. The market does not prohibit contingencies, but how you use them affects your leverage.

Colorado practice centers on a negotiated due diligence period and fee, separate from specific contingencies like financing or appraisal. Local agents generally work from accepted forms and follow deadlines that align with lenders, title companies, and HOA document delivery.

For background on standard practices, review consumer resources from the Colorado Division of Real Estate and contract guidance from the Colorado Association of REALTORS.

Colorado due diligence vs. inspection

Colorado’s due diligence period is broader than a typical inspection-only contingency that you might see in other states. It is a negotiated window that lets you inspect, investigate, and decide whether to move forward.

• You and the seller agree on the due diligence length and fee at contract acceptance.
• During this period, you can complete inspections, review HOA documents, assess title items, and conduct environmental tests.
• If you terminate within the agreed period according to the contract terms, your earnest money is generally handled by the contract rules, while the due diligence fee is typically nonrefundable to the seller.

Sellers tend to prefer shorter due diligence periods and larger due diligence fees in competitive neighborhoods. Buyers should balance speed with realism so there is enough time to complete inspections and key reviews.

Common contingencies you will see

Financing contingency

This protects you if your lender does not approve your loan on agreed terms. Contracts usually set a loan commitment deadline and define your obligation to use best efforts to obtain financing. In Denver, sellers often want a strong pre-approval letter and may push for a shorter financing deadline. Federal loan programs have specific requirements. You can review high-level program standards at HUD’s FHA resources.

Appraisal contingency and gap

If the property appraises below the purchase price, this contingency can allow you to terminate or renegotiate. In hot conditions, buyers sometimes limit this contingency or agree in advance to cover an agreed appraisal gap. Sellers like appraisal certainty, while buyers should be clear on how much extra cash they can safely commit if the appraisal comes in low.

Title review contingency

You will receive a title commitment and have a deadline to object to defects or unacceptable exceptions. Older Denver properties can have easements or old encroachments that take time to address. Keep deadlines realistic so the title company and lender can resolve issues before closing.

HOA and condo document review

For condos and many townhomes, you will receive governing documents, rules, budgets, and other disclosures. You can typically terminate within a set window if the documents reveal issues you cannot accept, such as large special assessments or restrictive rules. HOA resale packages can take days to assemble, so plan timelines accordingly.

Sale of your home contingency

Your purchase depends on selling and closing your current home. Sellers often counter with a kick-out clause that allows them to keep marketing the home and accept backup offers. You might be asked to show proof your home is on the market and to meet tight milestones. Shorter windows, larger earnest money, and flexible possession terms can help your case.

Insurance availability

Lenders require evidence of hazard insurance. If coverage is not reasonably available or is prohibitively expensive, some contracts allow termination. Older or unique construction can affect premiums, so start this process early.

Environmental and special inspections

• Lead-based paint disclosure applies to homes built before 1978. Learn more from the U.S. EPA’s lead-based paint disclosure guidance.
• Radon testing is common in Colorado and often part of due diligence. See the EPA’s radon overview and local guidance from the Denver Department of Public Health and Environment.

How contingencies impact leverage

Market conditions drive how sellers view contingencies. In a low-inventory environment, sellers usually prefer shorter timelines, larger due diligence fees and earnest money, and limited appraisal risk. In a more balanced market, fuller protections are often acceptable.

For current local conditions and market reports, review updates from the Denver Metro Association of REALTORS.

Here are common trade-offs you will navigate:

• Shorter due diligence vs. time to complete inspections
• Earlier loan commitment vs. realistic underwriting timelines
• Appraisal gap coverage vs. your cash exposure
• Larger due diligence or earnest money vs. your risk if you terminate

You can strengthen your offer with a detailed lender pre-approval, clear proof of funds, and contingency timelines that match real-world scheduling for appraisers, inspectors, and HOA documents.

Typical timelines and steps

Every contract is negotiated, yet these ranges are common in Denver and align with lender and vendor schedules:

1. Contract acceptance to due diligence start: immediate upon signing.
2. Due diligence period: often 7 to 15 days in active markets, longer if negotiated.
3. Inspections and investigations: schedule immediately after acceptance, then complete during due diligence.
4. Appraisal: often 1 to 2 weeks to schedule and report, so order early.
5. Loan commitment: commonly 21 to 30 days, but confirm with your lender.
6. Title commitments and objections: delivered early, with a defined objection deadline.
7. Contingency removals and clear to close: due before closing on the agreed date.

Buyer checklist

• Confirm your deadlines for due diligence termination, loan commitment, appraisal, title objection, and HOA review.
• Get a thorough pre-approval from a reputable lender and include a clear letter with your offer.
• Budget for the due diligence fee and earnest money. Know what is refundable versus nonrefundable.
• Order inspections immediately. If time is tight, prioritize roof, structure, foundation, and HVAC.
• Plan negotiation strategies for requested repairs, credits, or price adjustments.

Seller checklist

• Review the strength of each contingency and the removal deadlines.
• Request proof of funds and a detailed lender pre-approval when possible.
• Consider countering to shorten timelines or add protections like a kick-out clause for a buyer sale contingency.
• Engage a title company early to identify potential title issues and keep the closing on track.

Risks, remedies, and deadlines

Contracts spell out termination rights and remedies if a party misses a deadline. If you terminate properly within a contingency or due diligence period and deliver notice as required, the contract generally governs where earnest money goes. The due diligence fee is typically nonrefundable to the seller, even if you terminate within the period, subject to your contract. Missing a deadline can expose you to loss of deposits or other contract remedies.

Unusual situations like estates, foreclosures, or complex title items can benefit from attorney review. For consumer guidance on disclosures and process basics, visit the Colorado Division of Real Estate.

Ways to make your offer stand out

• Align deadlines with the reality of inspections, appraisals, title, and HOA document delivery.
• Provide a strong lender pre-approval that identifies loan type and terms.
• Consider a larger due diligence fee or earnest money if your financial risk tolerance allows it.
• If you include an appraisal gap, cap it at a level you can comfortably cover.
• If your purchase depends on selling your current home, prepare your listing early and offer flexible possession to help the seller.

A clear plan and steady communication reduce surprises. With the right timing and terms, you can protect yourself and still present a compelling offer.

Ready to tailor a game plan to your goals in Denver County? Connect with Unknown Company for a no-pressure conversation and Get a Free Home Valuation. We will map timelines, clarify contingency options, and coordinate lenders, inspectors, title, and HOA steps so you can move forward with confidence.

FAQs

What is a contingent offer in Denver contracts?

• It is an offer that depends on specific conditions like financing, appraisal, title, or HOA review, all managed by Colorado’s standardized forms and deadlines.

How is Colorado’s due diligence different from an inspection contingency?

• Colorado’s due diligence period is broader and time-limited, often with a nonrefundable due diligence fee, and allows wide investigations and termination per contract terms.

Will a seller accept a sale-of-home contingency in Denver?

• It depends on market conditions; sellers often add a kick-out clause and prefer short timelines, strong deposits, and proof your current home is actively listed.

How long should I set contingency periods in Denver?

• Due diligence often runs 7 to 15 days, loan commitment is commonly 21 to 30 days, and appraisals can take 1 to 2 weeks, but align with your lender and vendors.

What happens to earnest money and the due diligence fee if I cancel?

• If you terminate properly within the contract terms, the contract governs earnest money; the due diligence fee is typically nonrefundable to the seller.

Can I waive the appraisal contingency to be more competitive?

• You can, but it raises cash risk if the appraisal comes in low; many buyers instead use a capped appraisal gap that fits their budget.

How do HOA and condo reviews work in Denver?

• You receive governing documents and financials to review within a deadline, and you can usually terminate within that window if unacceptable issues appear.