A counteroffer is a rejection and counter of the original offer. To accept a counteroffer, you must accept each term of the counteroffer in writing before the counteroffer expires. You must be very careful when accepting a counteroffer because you need to initial or sign all material terms of the counteroffer for the counteroffer to be effective. If you fail to initial a material term changed in the counteroffer, then you did not properly accept the counteroffer and the offeror can decide to make an offer to someone else.
As an example, let’s say you are buying real estate and you submit an offer to a seller for $500,000. The seller makes you a counteroffer for $550,000. The seller’s counteroffer serves as a rejection of your original offer and the counteroffer can only be accepted by you if you initial all material changes to the contract. A change in sale price is a material change and must be initialed or signed for the counteroffer to become effective. If you do not initial next to the increase in purchase price, then you have failed to properly accept the counteroffer and the seller could choose to sell to someone else.
It is possible for a party to think he or she accepted a counteroffer only to find out later that he or she did not initial a material term and the other party already moved on to another offer. To prevent this situation from happening to you, make sure that you read the counteroffer carefully and initial every material change to properly accept a counteroffer.
You can also request that a counteroffer addendum be prepared that reflects all counteroffer changes, specifies the timeframe you have to accept them, and specifies how the counteroffer can be accepted. The Florida Association of Realtors has a standard counteroffer addendum that you can use. The addendum approach can be helpful because it ensures that you will not lose an offer because you missed an initial. The addendum can be especially helpful if there were multiple counteroffers, and the contract is convoluted because of all the changes.