We offered on a house this week. It was one we’d looked at a couple months ago when it hit the market but discarded because it was out of our price range. Then it sat, and by the time we went to tour homes for the first time, the price had dropped.
Why drop your price in a hot market? Because in a hot market your house should sell. A seller’s market doesn’t mean prices are arbitrary, it means inventory is low and expensive, but the seller still needs to find the equilibrium price at which buyers will start to offer.
When you offer on a house, you consider the price of the house, the square footage, what’s included or excluded from the sale, and you compare all of that to other houses in the area. Then you send over a contract — that’s all an offer is, a contract you intend to make good on — saying how much you want to pay and what concessions you are or aren’t willing to make.
If your offer is accepted, things move very fast for you. You have a day or two to come up with “earnest money,” confirming your intent to make good on the contract. Then you get an independent inspection, review a bunch of documents, and take the next week to figure out if you’d actually want to live in the place. If you do, you’re “under contract.”
Colorado is a “buyer friendly” state, meaning you have a lot of rights when you’re under contract. For example, as long as you want and are able to buy the home, the seller has to sell it to you. If someone comes in with $40 grand more in cash the day you go under contract, you still get to buy the house. If you, on the other hand, decide you don’t want to buy it, you can walk away. There are some sunk costs, like the inspection, the further you get in, but it’s nice to know it’s our house to buy if we want it.