Counteroffer

Key Takeaways

• A counteroffer rejects the original offer and terminates it, so the original terms can no longer be accepted.
• Changing any term creates a counteroffer, including the closing date, the earnest money amount, or who pays a fee, not only the price.
• Each counteroffer flips the roles, so the party who sent the last set of terms is now the offeror waiting on an answer.
• In Washington, the date the final counteroffer is accepted and that acceptance is delivered sets mutual acceptance, and statutory clocks run from it, including the seller's five business days to deliver the disclosure statement under RCW 64.06.020.

What It Means

A counteroffer is a reply that changes a term of the offer it responds to. It looks like a step toward agreement, and in practice it is, but legally it does two things at once. It rejects the original offer, which ends that offer for good, and it puts a fresh offer on the table for the other side to accept, reject, or counter again. The roles swap with each round: the seller who counters a buyer's offer becomes the offeror, and the buyer becomes the party holding the power of Acceptance.

The consequence students underestimate is that a rejected offer does not come back. Once a seller counters at a higher price, the buyer's original price is gone. If the buyer then walks, the seller cannot change course and accept the earlier number, because there is nothing left to accept. The seller would have to make a new offer and hope the buyer says yes. Negotiation ends the moment one side accepts the other's current terms without changing anything, which is the point of Mutual Acceptance.

How It Works in Washington

Washington ties real deadlines to the moment negotiation stops, which makes the last counteroffer in a chain the one that matters. RCW 64.06.020 requires the seller of improved residential real property to deliver a completed seller disclosure statement, the form brokers call Form 17, not later than five business days, unless otherwise agreed, after mutual acceptance of a written contract to purchase. Every counteroffer pushes that date, because mutual acceptance does not exist until one party signs the other's terms without alteration and delivers that acceptance.

The buyer's clock then runs off delivery. Under RCW 64.06.030, within three business days of receipt of the disclosure statement, or as otherwise agreed, the buyer may approve it or deliver a written notice of rescission. If the buyer delivers no rescission notice inside that three business day period, the statute treats the disclosure statement as approved and accepted by the buyer. Counting those days from the wrong signature is a common and expensive error.

Example

Alden lists a Kirkland townhouse at $610,000. Priya offers $585,000 with a 30-day closing and $10,000 in earnest money. Alden counters at $600,000 with a 45-day closing, which kills Priya's $585,000 offer outright. Priya counters back at $592,500, splitting the $15,000 gap between $585,000 and $600,000 evenly and accepting the 45-day closing. Alden signs that Purchase And Sale Agreement without changing a term and his broker delivers the signed copy on a Monday, so mutual acceptance is that Monday at $592,500, which is $17,500 under list.

The clocks start there. Alden's five business days to deliver Form 17 run Tuesday through the following Monday. Priya receives it that Monday, so her three business days to deliver a written rescission notice run Tuesday, Wednesday, and Thursday. Had she instead walked after Alden's $600,000 counter, Alden could not have reached back and accepted her $585,000, because his own counter had already ended it.

Common Mistakes and Exam Traps

• A counteroffer is a rejection, so a seller who counters cannot later accept the buyer's original offer if the buyer walks away.
• An acceptance that adds or changes a condition is a counteroffer no matter what the parties title the document.
• Mutual acceptance is not the offer date and not the closing date; it is the moment the last set of terms is accepted without change and that acceptance is delivered.
• Only the party who received an offer can accept or counter it, so a different buyer cannot step in and accept an offer made to someone else.