Contracts
When a seller counters a buyer's offer, the original offer is:
AStill valid until the buyer responds to the counter
BAutomatically accepted by the seller
CRejected, and the buyer is released from the original offer✓ Correct
DHeld in escrow by the listing broker
Explanation
A counteroffer rejects the original offer and substitutes new terms. 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
Escrow
A neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
Earnest MoneyA 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.
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