A buyer submitted an offer for $520,000 on a house with a condition that the hot water tank (HWT), which is currently rented for $60/month, be purchased outright by the seller and included in the sale price. The seller counter-offered to $525,000 and agreed to purchase the HWT, but only if the buyer paid for half the buyout cost, estimated at $2,000. The buyer rejected this counteroffer. What is the status of the original offer?

Question: A buyer submitted an offer for $520,000 on a house with a condition that the hot water tank (HWT), which is currently rented for $60/month, be purchased outright by the seller and included in the sale price. The seller counter-offered to $525,000 and agreed to purchase the HWT, but only if the buyer paid for half the buyout cost, estimated at $2,000. The buyer rejected this counteroffer. What is the status of the original offer?

Answer options:

• The original offer of $520,000 is still open for the seller to accept. ✅ The original offer of $520,000 was terminated by the seller's counteroffer.
• The buyer must make a new offer if they wish to proceed with the purchase.
• The seller can demand the buyer restart negotiations due to the rejection.

Correct answer: The original offer of $520,000 was terminated by the seller's counteroffer.

Explanation: Under contract law, a counteroffer acts as a rejection of the original offer and simultaneously creates a new offer. Therefore, when the seller made a counteroffer, the buyer's original offer of $520,000 was automatically terminated and cannot be subsequently accepted by the seller.