Definition of Counteroffer

What is the definition of the term "counteroffer"? What does the term "counteroffer" mean?

Let's say that you are trying to sell an asset - for this definition, let's say that you are trying to sell your offer.

You list your home at $299,000 - this is the original listing price.

Definition of Counteroffer - Financial DictionaryNow, let's say that somebody offers you $225,000 for your home - this initial offer would certainly classify as a "lowball offer".

Now, if you make an offer in response to the first offer ($225,000), then this would be a "counteroffer". In short, a counteroffer is a response to a previous offer.

The $225,000 offer is unacceptable, so you come back with a counteroffer of $285,300. After some thought, the person who made the initial offer decides to accept and pay $285,300.

By its very nature, a counteroffer is a response to an initial offer that is deemed to be unacceptable.

Another example of a counteroffer:

A painting is listed for $10,500.

You decide to offer $9,200 for the painting. The person selling the painting deems this initial offer to be unacceptable, so they come back with a "counteroffer" of $10,250.

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