What is a Counter-Offer?

A counter-offer is a response to an original offer that effectively rejects that offer while simultaneously proposing a new set of terms. This means that when the party receiving the original offer presents a counter-offer, they are not simply accepting the initial terms but rather altering the conditions and terms of the agreement. This is crucial in real estate transactions, as the terms can significantly impact the rights and obligations of the parties involved.

By proposing new terms, the party making the counter-offer requires the original offeror to reconsider the deal based on the changes. If the counter-offer is accepted by the original offeror, then a contract is formed based on the terms specified in the counter-offer, rather than the original offer. This concept is fundamental in contract law, as every modification or deviation from the original offer indicates that the parties are not in agreement until the counter-offer is accepted.