When a seller makes a counteroffer to a buyer's original offer, what is the legal effect?
Correct Answer
B) It rejects the original offer and creates a new offer for the buyer to accept or reject
A counteroffer legally rejects the original offer and creates a new offer. The original offer is terminated and cannot be accepted. The buyer, now in the position of offeree, may accept, reject, or counter the seller's new offer.
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Related Topics & Key Terms
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Related Concepts
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.
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
Equitable title is the buyer's interest in a property after a purchase contract is signed but before closing, giving the buyer the right to acquire legal title in the future. The seller retains legal title until the deed is delivered at closing.
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