Contracts
In Colorado, if both the buyer and seller agree to terminate a contract and return the earnest money to the buyer, they should:
AA. Just verbally agree to do so
BB. Execute a written 'Termination Agreement' signed by both parties, directing the earnest money holder to return the funds✓ Correct
CC. Contact the Colorado Division of Real Estate for approval
DD. File with the county court
Explanation
When both parties agree to terminate the contract, they should execute a written Termination Agreement (Colorado Commission uses the Earnest Money Release form) signed by both buyer and seller. This directs the earnest money holder to release the funds and provides written evidence of the termination, protecting both parties.
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