So it's a bit confusing, but our offer was rejected. It's okay. It's supposed to happen this way.
We offered a certain amount with it being contingent on the sale of our house. We also wrote into the offer that we were bumpable. Meaning: if they got another offer, they could entertain it, let us know and give us 72 hours to come up with another offer/plan (getting more loan money so we could still get the house...not! what we would have done).
Their agent sat with them for almost two hours explaining that this was a good offer.
They rejected and lowered their price lower than what we had even offered, by quite a bit.
So, if it's supposed to be our house, it will be there when we can buy it. Alia has just said this means we have to sell our house faster. I could feel her shaking her head about this whole situation. I think she feels really bad (or is it badly), but extra motivated now (as if she wasn't motivated before).