An offer to purchase real estate is terminated by all of the following EXCEPT:
Audio Lesson
Duration: 2:45
Question & Answer
Review the question and all answer choices
Death of the offeror
Death of the offeror terminates the offer because the offeror cannot perform their contractual obligations after death. Most states require estate representatives to be appointed before any real estate contracts can be enforced.
Counteroffer by the offeree
A counteroffer terminates the original offer because it rejects the original terms and proposes new ones. This creates a new offer that the original offeror can accept or reject.
Inquiry about terms by the offeree
Rejection by the offeree
Rejection by the offeree terminates the offer because it definitively communicates the offeree's unwillingness to accept the original terms. Once rejected, the offer cannot be revived unless the offeror renews it.
Why is this correct?
An inquiry about terms does not terminate an offer because it demonstrates the offeree's interest in potentially accepting but needs clarification. The offer remains open until the offeree either accepts, rejects, or makes a counteroffer.
Deep Analysis
AI-powered in-depth explanation of this concept
Understanding offer termination is crucial in real estate practice because it determines when a binding contract exists and when parties are no longer obligated. This question tests your knowledge of what actions legally end an offer. The core concept is distinguishing between actions that terminate an offer versus those that simply preserve it. When analyzing the options, remember that only communications that definitively reject or change the offer will terminate it. Inquiries don't show intent to reject, while death, counteroffers, and explicit rejections all demonstrate the offer is no longer active. This question is challenging because it requires understanding nuanced communication differences and their legal consequences. This connects to broader real estate knowledge about contract formation, agency relationships, and transaction timelines.
Knowledge Background
Essential context and foundational knowledge
The termination of real estate offers is governed by contract law principles. Generally, offers can be terminated by the offeror (revocation), the offeree (rejection or counteroffer), operation of law (death or incapacity), or lapse of time. Inquiries about terms are considered requests for information, not rejections, which preserves the offer. This distinction is important in real estate transactions where parties often negotiate through multiple communications before reaching an agreement.
Think of an offer like a restaurant reservation. If you call to ask about menu options (inquiry), your reservation still stands. If you ask to change the time or order something different (counteroffer), the original reservation is canceled. If you say you're not coming (rejection), your reservation is gone. If the restaurant closes permanently (death of offeror), your reservation is terminated.
When encountering offer termination questions, mentally map the situation to the restaurant reservation analogy to determine if the action preserves or terminates the offer.
Remember that only actions showing clear intent to reject or change the offer terminate it. Inquiries are typically just requests for information and preserve the offer.
Real World Application
How this concept applies in actual real estate practice
A buyer submits an offer on a $300,000 home with standard contingencies. The seller's agent calls the buyer's agent to ask about the buyer's financing timeline and requested closing date. This is merely an inquiry about terms, not a rejection. However, if the seller had responded with a counteroffer at $325,000, that would terminate the original offer. If the buyer had then died before responding to the counteroffer, the counteroffer would be terminated, but the original offer was already terminated by the counteroffer.
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