Does a Counteroffer Agreement Become Separate and Supersede the Purchase Agreement?

I saw this question asked by a seller in the real estate advice section of Trulia and felt I should explain this process a bit better.

First it's very important to understand I am licensed in California and I'm explaining how it works to our state.

In terms of the question my first reaction was neither. It most cases the counter offer is "made part of" the purchase contract. When a offer is given to a seller from a buyer they review the offer and if they do not except all terms they want to counter. The counter is to say I agree with those terms of the purchase offer except these items. Usually foremost is price.

Then the buyer can except those items, saying I except all those items on the purchase contract and your counter one or make a counter two. This can go back and forth as many times needed until both buyer and seller agree. In order to say to stay in contract the Realtors need to make sure all parties involved are adhering to the time frames on the contracts as well.

All terms on the counters and purchase agreement are incorporated into one agreement to open escrow. The escrow officer will then create escrow instructions according to the purchase contract and all counter offers involved. The escrow officer will send out those instructions for everyone to sign again.

There is one exception to this rule and that is foreclosures. Many foreclosures are run by asset manager companies that are outside the state of California. Sometimes they like to make their own contracts that can blanket the country.

You have to be very careful when purchasing a foreclosure and should be using a experienced full time Realtor. There are some banks that send a "counter" which reads at the top that it does "Supersede" the California purchase contract.

If you are purchasing a foreclosure and sign one of those contracts where it states "Supersedes" everything in place on that contract becomes the new agreement and you may loose rights here in California that are written into the California purchase agreement to protect you. If you are signing one of those contracts make sure you read it in detail and have a Realtor, Attorney, or both advising you on the contract.