Prospective buyers made an offer on a property. The seller did NOT accept, but made a counteroffer. What is TRUE after the buyers signed the counteroffer?

The correct answer states that both contracts are valid. When a seller makes a counteroffer in response to the prospective buyers' original offer, the original offer is effectively rejected. However, the buyers' original offer and the seller's counteroffer can both exist in a state of validity until one party takes decisive action, such as accepting one of the offers or counteroffers.

Since the buyers signed the counteroffer, they have now accepted the new terms proposed by the seller. This means that the counteroffer becomes a binding agreement as long as it is accepted. It’s important to recognize that the original offer simply becomes void when the counteroffer is made, but it may still have implications in negotiations or if the counteroffer is rejected later.

Ultimately, the focus here is that both the original offer (which was initially valid) and the counteroffer can coexist in terms of the negotiation process — at least until one is acted upon. However, upon signing the counteroffer, the original offer is no longer open for acceptance. This illustrates the dynamic nature of real estate negotiations, where offers and counteroffers can shape the terms of an agreement before reaching a final contract.