In real estate, what is a "counteroffer"?

A counteroffer is a response that proposes new terms to an initial offer. When one party receives an offer and wishes to change the terms, such as the price or contingencies, they create a counteroffer, effectively rejecting the original offer while simultaneously proposing different conditions. By doing this, the second party opens the door for negotiation and discussion, allowing both parties to reach a mutually agreeable arrangement.

In this context, it’s important to understand that simply agreeing to the original terms does not constitute a counteroffer. A counteroffer must change the original terms in some way. Other choices relate to different aspects of the negotiation process. For example, a formal acceptance of the original offer would mean that no changes are being proposed, while requesting additional financing or making a legal argument does not involve altering the terms of the original offer. Thus, the essence of a counteroffer lies in its role as a negotiating tool that invites further dialogue by modifying the initial proposition.