New York Real Estate Salesperson ExaminationContractsMedium
A buyer submits an offer to purchase a property. The seller makes a counteroffer, changing the closing date and increasing the earnest money deposit. Which of the following is true regarding the buyer's original offer?
- AThe buyer can accept the original offer even after receiving the counteroffer, as long as it's within the original offer's timeframe.
- BThe original offer can only be reactivated if both parties agree in writing.
- CThe original offer remains open until the seller's counteroffer is formally rejected by the buyer.
- DThe seller's counteroffer automatically terminates the buyer's original offer.
Show answer & explanationAnswer & explanation
Correct answer: D. The seller's counteroffer automatically terminates the buyer's original offer.
A counteroffer acts as both a rejection of the original offer and a new offer. Once a counteroffer is made, the original offer is terminated and can no longer be accepted.
Why the other options are wrong
- A. This is incorrect; the original offer is terminated by the counteroffer and cannot be subsequently accepted.
- B. While parties can create a new agreement, the original offer itself is terminated by the counteroffer and cannot be simply 'reactivated' as presented.
- C. This is incorrect; a counteroffer terminates the original offer immediately.
Counteroffer Effect
A counteroffer serves as a rejection of the original offer and simultaneously creates a new offer.
- Terminates original offer.
- Shifts roles: original offeree becomes offeror.
- Must be accepted to form a contract.
Memory trick: Countering an offer is like hitting a reset button, the old offer is gone.