A Virginia buyer submits an offer to purchase a home in Alexandria for $550,000. The seller counters at $565,000. The buyer then counters back at $557,000. The seller accepts $557,000 in writing and communicates acceptance to the buyer's agent. Which statement accurately describes the legal status of the original $550,000 offer at this point?
Correct Answer
B) The original $550,000 offer was terminated when the seller issued the $565,000 counteroffer
Under the mirror-image rule applied in Virginia, a counteroffer simultaneously rejects the original offer and creates a new offer. When the seller countered the buyer's $550,000 offer with a $565,000 counteroffer, the original $550,000 offer was immediately and irrevocably terminated. All subsequent negotiations were based on the new offers created by each counteroffer.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A financing contingency makes the purchase contract conditional upon the buyer obtaining mortgage approval within a specified time period. If the buyer cannot secure financing, they can cancel the contract and receive their earnest money back.
An inspection contingency gives the buyer the right to have the property professionally inspected within a specified time frame and to negotiate repairs or cancel the contract based on the findings.
Liquidated damages are a predetermined amount of money specified in the contract that the non-breaching party is entitled to receive if the other party breaches. In real estate, the earnest money deposit typically serves as liquidated damages.
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