Humber/Ontario Real Estate Course 2 Exam Practice

What is the outcome when a buyer counters a seller's offer and the seller promptly accepts?

1. A new offer is created, and previous terms become void.

2. The counteroffer becomes the new binding contract.

3. The initial offer remains the effective agreement.

4. Both parties must renegotiate to finalize the details.

5. Neither party is obligated to proceed until a formal signing.

6. The buyer can still back out without penalty.

The correct answer is: The counteroffer becomes the new binding contract.

When a buyer counters a seller's offer and the seller promptly accepts, the counteroffer becomes the new binding contract. This means that the terms and conditions proposed in the counteroffer are now the agreed-upon terms that both parties are legally bound to follow. The original offer made by the seller and any previous terms are no longer valid once the counteroffer is accepted. This emphasizes the importance of carefully reviewing and considering all aspects of a counteroffer before accepting it, as it will become the new contract between the buyer and seller. The other options are incorrect because they do not accurately represent the legal outcome when a counteroffer is accepted promptly by the seller.