When a buyer makes an offer on a property, the seller can do one of three things: They can accept, they can reject, or they can counter. If they accept, then the contract is ratified with the conditions set forth in the initial offer. If they reject, then there is no contract. A counteroffer, or counter for short, keeps the conversation alive for at least one more round.

A counteroffer tells the buyer that they may be interested in accepting their offer, under certain further conditions. An offer can be countered for any reason. Very commonly, a seller may counter because they would like a higher offer. Other reasons for countering may include escrow period, contingency withdrawal, and so on.

If a listing receives multiple offers, the seller may counter more than one offer. Generally, the objective is to get each of the buyers to strengthen their bid, at which point they will select the one that is to their satisfaction.

A buyer can accept or reject the counteroffer, or counter the counteroffer, accepting some or all of the terms put forth and adding more conditions yet. This process could feasibly go back and forth until both parties are satisfied with the terms, and the final offer is accepted.