Counter Offer

The term “counter offer” is used to describe a situation wherein an offer is made to someone, and they make an alternative offer in return. That alternative offer is the counter offer. When a counter offer is made, the prior offer is accepted as rejected, and it is understood that the contract won’t be accepted unless the counter is accepted. To explore this concept, consider the following counter offer definition.

Definition of Counter Offer

Noun

  1. An offer made in response to a prior offer.

Origin

1780-1790

Counter Offer Letter Sample

In certain situations, such as a job offer, or a property sale, or even the negotiation of a salary, an individual may create a counter offer letter in response. For example, a counter offer letter may be offered in response to an offer letter sent from an employer to a job candidate. The candidate may be very interested in the job, but may not be happy with the proposed salary. In that case, the candidate would draft and send a counter offer letter.

One should take care in writing a counter offer letter. If the person receiving the offer does not like it, or is otherwise offended by it, then he may not only reject the counter offer, but withdraw the initial offer too. Then the person who proposed the counter offer is left with nothing. The best way to be confident about a counter offer letter is to research what would be the average salary, price of property, or whatever is being proposed. Once you have a better idea of the worth of the thing that you’re negotiating, the better position you are in to negotiate.

Here’s an example of a counter offer letter wherein the person is requesting a higher salary for a job she has been offered. The author of the letter asks what may end up becoming her future boss for a meeting to discuss the salary that was offered to her:


Dear Mr. Smith,

I truly appreciate your offer of the position of Supervisor of the Help Desk at “IT & Me” in Brooklyn, New York. The chance to work for such a prestigious technology company is a thoroughly exciting prospect.

Before I make a final decision, though, I would like the opportunity to meet with you regarding the salary you have offered. I am confident that, with my experience and networking capabilities, I will be able to bring additional revenue to the company.

Please advise as to whether we can meet to discuss this before I make a decision with regard to accepting your offer.

Respectfully yours,

Karen Carpenter


Real Estate Counter Offer

A real estate counter offer occurs when someone wants to purchase a home, makes an offer to the seller, and the seller is not satisfied with the proposed offer. The seller then makes a counter offer, which tells the buyer that his offer will be accepted so long as one or more of the proposed terms of the offer changes to the seller’s liking.

Some of the more common reasons why a real estate counter offer is made include:

  • To change the total amount that is to be paid for the property
  • To increase the size of the initial deposit to be paid
  • To change the closing date
  • To change the seller’s obligation with regard to paying for certain fees or reports

There is no limit to the number of counter offers that can be made by either the seller or the buyer. In some states, the seller is not required to respond to a real estate counter offer. Most offers include a date of expiration. If the seller does not respond by that date, the listing agent can notify the buyer that the seller is not accepting the counter offer. However, the seller himself is not usually bound by law to reject the offer in writing.

Salary Counter Offer

When a candidate for a job is made an offer with regard to salary, the candidate may then choose to provide a salary counter offer if the proposed offer is less than satisfactory. Counter offers are not necessarily limited to new job proposals. For example, a counter offer may be made in response to an offer for a promotion that comes with a less than desirable salary. Companies can also make counter offers to current employees who are considering leaving their jobs to join another company in an effort to get them to stay.

Studies show that over half of all job candidates do not make counter offers when offered a starting salary to join a new company. Reasons for not asking for an increase in salary include:

  • Not wanting to appear greedy
  • Not being comfortable asking for a higher salary
  • Fear they will not be hired if they ask for more money

However, in spite of this discomfort, many companies actually expect prospective employees to make a salary counter offer. Over half of all employers say they would be willing to consider a counter offer, and about the same number say they make a lower initial offer because they expect candidates to negotiate for a higher salary.

Candidates who elect to make a salary counter offer should do so based on research, rather than what they feel they deserve or what they need to make monthly payments on their bills. The counter offer should be made with respect to the salary that is typically offered for that exact same job title and responsibilities and should be based on the applicant’s experience, skills, education, and location.

Counter Offer Example Involving Property in North Carolina

An example of a counter offer can be found in the matter of Normile v. Miller, a case decided in 1985. Here, Hazel Miller owned real estate in Charlotte, North Carolina. In August 1980, Miller put the property up for sale, and that same day, Michael Normile and Wawie Kurniawan checked it out with an interest in purchasing it. Afterwards, they made an offer to Miller to buy the property. Miller signed the offer after proposing several changes as a counter offer.

Normile wasn’t thrilled with the counter offer and thought that he had first option on the property, meaning that no one else could make an offer on or buy the property, so he could take some time to make up his mind. As it turns out, however, someone else – a Lawrence Segal – did make an offer to purchase the property, which was very similar to that which was made by Normile and Kurniawen, and Miller accepted Segal’s offer without making any changes.

Miller revoked her counter offer to Normile and Kurniawen and literally told them, through her agent, “you snooze, you lose. The property has been sold.” Later that same day, Normile and Kurniawen signed off on the counter offer and provided the initial $500 deposit through their agent in an attempt to buy the property anyway. Segal and Normile and Kurniawen then proceeded to file separate lawsuits against Miller to determine who should be truly allowed to purchase the property.

The trials in the matter were consolidated. After trial, Miller was ordered to transfer ownership of the property to Segal. Normile and Kurniawen appealed, however the Court of Appeals unanimously affirmed the decision of the trial court. The matter then went before the North Carolina Supreme Court. The Court affirmed the Court of Appeals decision with some modifications.

The first issue to be considered by the Court was whether the time period in which the offer could have been accepted was a legitimate term of the counter offer. The Court decided that no, it was not. The next question then became whether Miller had accepted Normile and Kurniawen’s offer before that time period expired. The Court concluded that no, she had not.

Said the Court:

“…regardless of whether or not the seal imported the necessary consideration, we conclude that defendant-seller made no promise or agreement to hold her offer open. Thus, a necessary ingredient to the creation of an option contract, i.e., a promise to hold an offer open for a specified time, is not present. Accordingly, we hold that defendant’s counteroffer was not transformed into an irrevocable offer for the time limit contained in the original offer because the defendant’s conditional acceptance did not include the time-for-acceptance provision as part of its terms and because defendant did not make any promise to hold her counteroffer open for any stated time.“

The Court concluded its decision by stating:

“In this case, plaintiff-appellants received notice of the offeror’s revocation of the counteroffer in the afternoon of August 5, when Byer saw Normile and told him, “[Y]ou snooze, you lose; the property has been sold.” Later that afternoon, plaintiff-appellants initialed the counteroffer and delivered it to the Gallery of Homes, along with their earnest money deposit of $500. These subsequent attempts by plaintiff-appellants to accept defendant’s revoked counteroffer were fruitless, however, since their power of acceptance had been effectively terminated by the offeror’s revocation…

…Since defendant’s counteroffer could not be revived, the practical effect of plaintiff-appellants’ initialing defendant’s counteroffer and leaving it at the broker’s office before 5:00 p.m. on August 5 was to resubmit a new offer. This offer was not accepted by defendant since she had already contracted to sell her property by entering into a valid, binding, and irrevocable purchase contract with Plaintiff-appellee Segal.”

Related Legal Terms and Issues

  • Closing Date – The last date by which something can be submitted for consideration.
  • Listing Agent – An individual who does not directly sell a home or piece of property, but who markets the home or property to help it sell.

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