Which statement is correct about counter offers in real estate transactions?

In real estate transactions, a counter offer is a response made to an original offer, with modifications. The statement that a counter offer nullifies the original offer is correct because, once a counter offer is made, it effectively rejects the original offer. This means that the original terms are no longer valid, and the parties must negotiate further based on the new terms presented in the counter offer. It highlights the dynamic nature of negotiation in real estate, where offers and counter offers can lead to a final agreement that reflects the mutual interests of both parties.

The concept underscores the importance of clear communication and understanding during the negotiation process, as it is essential for both the seller and the buyer to be aware that the terms of the initial offer are no longer an option once a counter offer is on the table.