In real estate negotiations, what is a "counteroffer"?

A counteroffer is defined as a response to an initial offer that modifies its terms, prompting further negotiation. In the context of real estate negotiations, when one party makes an offer to purchase or lease a property, the other party can choose to accept it, reject it, or make a counteroffer. The counteroffer includes different conditions or terms than the original offer, which indicates that the receiving party is not fully accepting the initial offer but is willing to negotiate.

For example, if a seller receives an offer from a buyer for a specific price but believes the price is too low, the seller might respond with a counteroffer that modifies the asking price or adjusts other terms of the sale, such as closing costs or the timeline for the sale. This process facilitates negotiation and helps both parties work towards an agreement that is satisfactory for everyone involved.

Understanding counteroffers is crucial in real estate as it impacts how negotiations unfold and may affect the willingness of either party to reach a successful agreement.