Counter-offer (sign-back)역제안 (사인백)

What is it?

A counter-offer is when the side that receives an offer (a written proposal to buy) says "not as written, but I will if you change this", and sends it back with changed terms. Ontario agents usually call it a sign-back, because the changed offer is signed and sent back.

Usually the seller signs back the buyer’s offer, but the buyer can also sign back the seller’s counter-offer. It goes back and forth until both sides sign the same terms.

Price is not the only thing that can change. The closing date, the deposit, the deadlines of conditions (financing, home inspection), included items (fridge, light fixtures) and the irrevocable time can all be countered.

How is it done in practice?

In Ontario, offers are usually written on the OREA (Ontario Real Estate Association) standard form (Form 100), and the sign-back is made on that same paper or electronic document. The common way is below. Confirm the exact steps and wording in the contract you sign and with your agent.

1. Strike out the term you want to change (for example, the price $950,000) and write the new one (for example, $975,000).
2. The person making the change initials each changed spot. If the other side accepts, they initial the same spots. A change becomes part of the contract only when both sides have initialled it.
3. Write a new irrevocable time: "this counter-offer is open for acceptance until <date and time>". If the other side does not accept by then, the counter-offer expires.
4. Sign it and send it to the other side’s agent. The law (the TRESA regulation) requires agents to pass on written amendments to offers to their client as soon as possible, just like the offer itself.
5. If the other side signs it as is within the time, you have a contract. If they change something again, that is a new counter-offer with its own new irrevocable time.

In electronic signing systems a new version may be issued instead of strike-outs. Either way, check every change, one by one, before you sign.

What does it mean legally?

Under the general rules of contract law, a counter-offer rejects the original offer and makes a new one. So the moment the seller sends back $975,000, the buyer’s original $950,000 offer is gone. If the buyer rejects the counter, the seller cannot later say "fine, I accept your $950,000". A new offer has to be written.

A contract is formed when one side accepts the other side’s latest offer (or counter-offer) without changes, within its irrevocable time, and that acceptance is communicated to the other side. Until then, nobody is bound. The contract usually also says how and by when acceptance must be communicated, so check it.

This is the general principle. Ask a real estate lawyer how it applies to your situation.

How many rounds are there?

There is no limit. Sometimes one round settles it; sometimes there are three or four. But remember that every counter-offer carries a new deadline, and during that time the other side can keep looking at other homes (or other buyers).

RECO (the regulator of real estate agents in Ontario) warns sellers that a seller may keep negotiating only to find that the offer was already the best the buyer could present, while the other buyers have found new homes.

Irrevocable times on sign-backs are usually short, a few hours to about a day, so the receiving side cannot hold your offer while negotiating with someone else. There is no fixed rule, so decide with your agent.

In a multiple-offer situation

When several offers come in, the seller can sign back one of them, or ask some buyers to improve and resubmit. The seller decides, with the agent’s advice.

Signing back two buyers at the same time risks being bound to two contracts if both accept. That is why sellers normally sign back only one buyer at a time. This is practice, not law, so sellers should confirm with their agent and lawyer.

As a buyer: a sign-back means the seller is interested in your offer. But the deadline is short, so decide quickly and stay within your budget.

Strategy in plain words

• Decide how far you can go before you write the first offer. Then a counter-offer will not rattle you.
• Look beyond price. Matching the other side’s closing date or shortening a condition period can matter as much to them as money.
• Check every change in every round. People sometimes find that the included items or the closing date changed along with the price.
• A verbal promise is not a contract. Even if your agent reports that "the seller said this price is fine", nothing is settled until the signed sign-back comes back. The law requires agents to use best efforts to make sure real estate agreements are in writing.
• Do not miss the deadline. Irrevocable times on sign-backs run through weekends and holidays. If the time passes before you answer, the counter-offer is gone and the other side is free to deal with someone else.

What to watch for

• Initials from both sides: a change initialled by only one side is not agreed. Check every changed spot before the final signature.
• Get a copy: once the contract is formed, you should receive a copy of the final version signed by both sides. Agents must use best efforts to make sure every party gets one.
• Condition deadlines in a conditional offer may stay the same or move during the sign-backs. Count the days again on the final version.
• If you offer on another home while a sign-back is pending, you could end up bound to both. Finish one before you start the next.

Example