Humber/Ontario Real Estate Course 4 Exam Practice

What action is necessary for a seller to counter a buyer's initial offer at a higher price?

1. Amend the original offer to reflect the new price

2. Sign a counter offer form stating the new price

3. Alter the irrevocable clause in the original agreement

4. Sign the original agreement along with a counter form

5. Seek legal advice for the counter offer

6. Agree verbally with the buyer

The correct answer is: Sign a counter offer form stating the new price

To formally counter a buyer's initial offer at a higher price, the appropriate action is to sign a counter offer form that clearly states the new price. This process is essential because it creates a distinct, documented proposal that the seller can present to the buyer, effectively outlining the seller's revised terms. Using a counter offer form serves several purposes: it signifies the seller's intent to negotiate rather than accept or reject the initial offer outright, and it provides clarity and a formalized method of communication regarding the specific changes in terms. This documentation is crucial in real estate transactions to avoid misunderstandings and to establish a clear record of the negotiation process, especially in case further legal discussions are required. Other options may seem practical but do not fulfill the necessary legal or formal requirements that ensure both parties are clear on the terms being negotiated.