Contracts
What happens to the original offer when a seller submits a counteroffer?
AThe original offer remains open until the buyer withdraws it
BThe original offer is terminated and replaced by the counteroffer✓ Correct
CBoth offers exist simultaneously and the buyer may accept either
DThe original offer automatically becomes binding
Explanation
A counteroffer is a rejection of the original offer. Once a counteroffer is made, the original offer is terminated and the buyer is no longer bound by it.
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
Right of First RefusalA contractual right giving a party the opportunity to match any offer received before the owner can accept it from a third party.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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