The Colorado Real Estate Commission's approved Contract to Buy and Sell Real Estate runs to twenty pages. Most buyers read the price line, the closing date, and nothing else. That is understandable and it is also where almost every avoidable disaster in a residential purchase begins, because six or seven other lines in that document decide what happens when something goes wrong — and something usually goes wrong.
The price is the least interesting number
A seller comparing four offers is not ranking them by price. They are ranking them by the probability of closing, multiplied by the net proceeds. A cash offer twenty thousand below the top number, with a fourteen-day close and no appraisal contingency, beats the top number attached to a 5%-down loan with a forty-five-day timeline more often than not. We have watched it happen on both sides of the table repeatedly.
So the useful question is not "how high can I go" but "what am I offering that is not money".
Earnest money
One to three per cent of the purchase price, held by the title company, credited to you at closing. A larger deposit signals seriousness without costing you anything — provided you meet your deadlines. It is at risk only if you default outside your contractual protections, which brings us to the part that actually matters.
The three contingencies
Every one of these is a right to terminate, and every one of them expires on a date you agreed to. Miss the date and the protection evaporates while your earnest money stays where it is.
Inspection
You get a period to inspect and to object to what you find. The objection is a negotiation: you ask for repairs, a credit, or a price reduction, and the seller can agree, counter, or refuse. If you cannot reach agreement by the resolution deadline, you can terminate and take your earnest money with you.
On the houses we sell, a general inspection is rarely enough on its own. A sewer scope on anything built before about 1975 costs a couple of hundred dollars and has saved our clients five figures more times than we can count. On a post-and-beam mid-century, a structural engineer looking at the roof deck is worth the same again.
Appraisal
Your lender orders an appraisal. If it comes in below the contract price, the lender will only lend against the lower figure, and you cover the gap in cash or renegotiate. The appraisal contingency lets you terminate if you cannot do either. Waiving it in a rising market was normal in 2021 and is largely unnecessary now.
Loan
Also called the loan objection deadline. It protects you if your financing does not come together. This is precisely why a full underwritten pre-approval matters more than a pre-qualification: with the first, the probability that this contingency ever gets used is close to zero, and the seller can see that.
The deadlines are the contract
There is a table on page one listing every date. Print it. Put it on the wall. Your broker should be tracking it, but the consequences of a missed date land on you, not on them.
What we do differently
Before we write, you get a written comparative market analysis on that specific address and a written contingency strategy: which protections we are keeping, which we are trading, and what each trade is worth in dollars. If we are recommending you waive something, you will see the number attached to the risk before you decide. If the number is bad enough, we will tell you to walk — and we have.
If you are about to write your first offer on a designed house, this is what our buyer representation involves, and a first conversation costs nothing.
This article is general information about the Colorado residential market, not legal, tax or financial advice, and it is published on a demonstration website for a fictional brokerage. Consult your own attorney, accountant and lender before acting on anything in it.
