A buyer submits a written purchase offer for a home in Myrtle Beach, South Carolina, offering $380,000 with the seller to pay $8,000 in closing costs. The seller issues a written counteroffer accepting the $380,000 price but reducing the seller-paid closing costs to $4,000. The buyer then issues a second written counteroffer accepting the $380,000 price and the $4,000 in closing costs, but adding a new contingency requiring the seller to replace the HVAC system before closing. How many offers are currently 'open' and available for acceptance?
Correct Answer
B) One offer is open — the buyer's second counteroffer — and the seller may accept it to form a binding contract.
Under South Carolina contract law, each counteroffer terminates the prior offer and replaces it with a new one. The buyer's original offer was terminated by the seller's first counteroffer. The seller's counteroffer was terminated by the buyer's second counteroffer. At this point, only the buyer's second counteroffer — proposing $380,000, $4,000 in seller-paid closing costs, and the HVAC replacement contingency — remains open and available for acceptance by the seller. If the seller accepts all these terms, a binding contract is formed.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Contingencies are conditions written into a real estate contract that must be met before the transaction can close. If a contingency is not satisfied, the buyer can typically cancel the contract without penalty.
Contract termination occurs when a contract is ended or discharged, releasing both parties from their obligations. A contract can be terminated through performance, mutual agreement, operation of law, or breach.
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
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