What is a "Counteroffer"?

A counteroffer may be made when the terms and conditions of the original offer were not accepted.  Either a buyer or seller of real estate may make a counteroffer.  Some people believe that if the counteroffer is not accepted, that the terms and conditions found in the original offer stand.  This is a common misunderstanding.  For clarity, let’s consider an example.

A prospective purchaser makes an offer to a seller in the amount of $100,000.  The purchasers offer has some of the standard contingencies such as a home inspection, an attorney approval contingency and a mortgage contingency.  The proposed closing date is 45 days from today.  The seller is excited about the prospect of selling their home.  Everything about the purchase offer is acceptable, except for the price offered.  The seller makes a counteroffer in the amount of $105,000; all other terms and conditions found in the original purchase offer remain the same. 

In the example in the previous paragraph, the only thing the seller changed is the price.  However, the seller, in effect, has rejected the first offer and made a new offer, called a "counteroffer", to the prospective purchaser.  Some real estate agents believe that if the buyer doesn’t accept the counteroffer in the amount of $105,000, the seller still can accept the original offer made in the amount of $100,000.

 Unfortunately, no.  Since the seller made a counteroffer, the original offer was “rejected”.

If you would like some guidance and counsel or have a question, click the “Contact Me” button below.  I’ll be happy to speak with you about this, and, if necessary, refer you to a competent real estate attorney for further information.