This form is used by an agent when an offer or counteroffer for the purchase or lease of property is received and rejected by the client, to prepare a counteroffer on modified terms.
The seller’s counter to a purchase offer
All too frequently a purchase offer submitted to a seller has numerous and major deficiencies to be cured before the seller agrees to sell.
With extensive changes to be made, sellers agents best simply just start over by using a fresh purchase agreement form to prepare and submit the counteroffer. When prepared, reviewed and acceptable to the seller, the purchase agreement is signed by the seller and agent and submitted to the buyers agent as the seller’s offer. Thus, the counteroffer is documented as an original purchase agreement offer without any reference to the rejected offer. [See RPI Form 150]
Major changes include:
- changes in the price or terms of payment;
- satisfaction of conditions (contingencies);
- condition of property disclosures and due diligence procedures; and
- closing activities and time of closing.
Minor changes needed for an offer to purchase to be acceptable to the seller are best documented by using a counteroffer form. Here, the terms of the buyer’s purchase agreement are made part of the seller’s counteroffer, subject to the changes noted in the counteroffer form. [See RPI Form 180]
Minor changes include:
- previously undelivered documents disclosing property conditions;
- the documentation and deadline for mortgage approval;
- elimination of seller payment of buyers mortgage costs;
- verification of down payment funds;
- the selection of the title or escrow company;
- the time for closing; or
- the prerequisite purchase of other property.
Additional or modified provisions may be needed but are not boilerplate copy included in counteroffer forms. Counteroffer provisions changing the terms of a purchase agreement offer are entered on an addendum to be attached to the counteroffer form. [See RPI Form 180-1]
The sellers agent, confronted with a purchase agreement offer that is unacceptable based on a review with the seller, usually determines what terms the seller will agree to. When differences in terms are likely to be resolved by negotiations, sellers agents are prone to contact the buyers agent to discuss possibilities for eliminating differences before a counter offer is submitted.
However, handling negotiations for a change in the terms of the buyer’s purchase offer needs to be quickly reduced to a writing in a counteroffer, signed by the seller and submitted to the buyers agent.
Without the seller’s signed counteroffer, the seller has not manifested their intent to be bound by any terms of sale. The buyer needs a writing so they can accept and enter into a binding agreement – not oral arrangements bantered around by loosely operating transaction agents. [See RPI e-book Real Estate Practice, Chapter 40]
Analyzing the counteroffer addendum
When preparing a counteroffer and additional or modified provisions are not pre-printed copy in a boilerplate addendum but are needed, an agent uses the Addendum — Counteroffer published by RPI. The form allows the agent to add wording to the counteroffer as an attachment to the counteroffer form. [See RPI Form 180-1]
The Addendum — Counteroffer contains three sections:
- Facts: The counteroffer the addendum is attached to is referenced, as well as the buyer’s and seller’s identities and real estate involved. [See RPI Form 180-11]
- Agreement: The terms and conditions to be made part of the referenced counteroffer are entered. [See RPI Form 180-12]
- Signatures: The person making the counteroffer which includes terms in the addendum signs and dates the form, and the person receiving the counter signs their name and dates the form to agree to the counteroffer terms. [See RPI Form 180-1]
Form navigation page created 11-2023.
Book: Real Estate Practice, Chapter 40
Form-of-the-Week: The Counteroffer and Counteroffer Addendum – Forms 180 and 180-1
Client Q&A: What to expect when making an offer?
Video: Counteroffers to Promote Clarity
Form-of-the-Week: Counteroffer and Rejection of Offer — Forms 180 and 184
Article: The votes are in: Sellers often accept the first offer they receive
Client Q&A: How do I negotiate a counteroffer?
