What defines a "counter offer" in a real estate transaction?

A counter offer in a real estate transaction specifically refers to an offer that modifies the terms of the original offer. When one party receives an offer from another party, they have the option to accept it, reject it, or make a counter offer. A counter offer does not just reject the initial offer; instead, it proposes new terms, which could include changes to the purchase price, contingencies, deadlines, or other relevant considerations involved in the transaction. This new proposition indicates that the original offer is no longer valid because the terms have been altered.

Understanding this concept is crucial in real estate negotiations, as initiating a counter offer often leads to further discussions and adjustments until the involved parties reach an agreeable contract. It’s important to note that once a counter offer is made, the original offer is effectively terminated, and the initial offeror must then decide whether to accept, reject, or counter the new terms proposed.