- Official section
- National V.A and V.C: Contract Law and Purchase Agreements
- Broker weight
- Part of 19% of the national portion
- Expected scored items
- The current PSI broker outline assigns about 19 of 100 scored national items to Contracts
Contracts exam concept
Offer, counteroffer, and multiple offers
Track one offer chain at a time. An offer gives the offeree the power to accept. A counteroffer changes the proposal, usually ends the prior offer, and flips the parties' roles. Multiple offers are separate chains competing for one seller decision. Nothing is binding until the correct offeree accepts the exact open offer and that acceptance is effective under the governing rules.
Last updated: August 1, 2026
What is the difference at a glance?
Short answer: An offer is a definite present proposal that creates power of acceptance in the offeree. A counteroffer materially changes a pending offer, rejects it under the standard exam rule, and creates a new offer with reversed roles. Multiple offers are independent proposals to one seller. The seller need not choose the highest price and may accept, reject, counter, or invite revisions, but cannot lawfully discriminate or safely accept incompatible contracts. Illinois client agents timely present all offers unless waived, and same-agent contemporaneous buyer offers require written disclosure and referral on request.
This page teaches the default examination framework. The exact offer, attorney-review clause, electronic platform, option, auction rule, escalation language, and communication history can alter a real dispute. Multiple-offer existence and terms can also be confidential depending on client direction and applicable duties. Licensees should use approved processes, keep each negotiation chain separate, and avoid custom legal drafting. Sources were reviewed through August 1, 2026.
What changes from one term to the next?
- Terms
- Offer vs. counteroffer
- Difference
- An offer creates power of acceptance. A counteroffer rejects the pending offer under the standard rule and proposes different terms.
- Question cue
- Initial or open proposal versus changed response.
- Terms
- Acceptance vs. counteroffer
- Difference
- Acceptance assents to the open offer without material change. A counteroffer changes a material term.
- Question cue
- Exact yes versus yes, but.
- Terms
- Counteroffer vs. inquiry
- Difference
- A counteroffer conditions agreement on new terms. An inquiry asks about a possibility without necessarily rejecting.
- Question cue
- Changed commitment versus question.
- Terms
- Rejection vs. revocation
- Difference
- Rejection comes from the offeree. Revocation comes from the offeror withdrawing before acceptance.
- Question cue
- Recipient says no versus maker pulls back.
- Terms
- Expiration vs. rejection
- Difference
- Expiration ends the power of acceptance by time. Rejection ends it by the offeree's communicated decision.
- Question cue
- Clock versus choice.
- Terms
- Multiple offers vs. counteroffers
- Difference
- Multiple offers are separate buyer proposals. Counteroffers are seller or buyer responses within particular negotiation chains.
- Question cue
- Parallel chains versus changed link.
- Terms
- Highest price vs. best offer
- Difference
- Highest price is one term. Best offer reflects seller net, financing, contingencies, timing, certainty, and lawful preferences.
- Question cue
- Headline number versus complete risk-adjusted deal.
- Terms
- Highest-and-best invitation vs. counteroffer
- Difference
- An invitation asks buyers to submit new proposals. A counteroffer gives a specific buyer terms capable of acceptance.
- Question cue
- Request offers versus make offer.
- Terms
- Primary vs. backup contract
- Difference
- The primary contract currently controls the sale. The backup is conditional on the stated failure or termination of the primary.
- Question cue
- Active first position versus waiting position.
- Terms
- Multiple offers vs. contemporaneous clients
- Difference
- A property can have multiple offers from unrelated agents. Illinois contemporaneous-offer disclosure specifically addresses two or more clients represented by the same designated agent on the same property.
- Question cue
- Market fact versus same-agent disclosure trigger.
How does the distinction change the answer?
Seller signs exact buyer offer
Scenario: A buyer submits a complete offer expiring at 8 p.m. The seller signs every required page without changes at 5 p.m., and the acceptance is communicated through the authorized channel at 5:20 p.m.
- The offeree accepted the open offer within its deadline.
- No material term changed.
- The signed acceptance was effectively communicated as required.
Answer: A contract forms on the offer's terms.
Seller changes closing date
Scenario: A buyer offers a June 15 closing. Before signing, the seller writes June 30, initials the change, signs, and returns the document.
- Closing date is a material transaction term.
- The seller did not mirror the buyer's offer.
- The seller's changed response proposes a new bargain.
Answer: The seller made a counteroffer, and the buyer now holds the power to accept it.
Buyer asks a question
Scenario: Before accepting a seller counteroffer, the buyer asks whether the seller would consider leaving the patio furniture, while stating no change is being proposed to the pending counteroffer.
- The communication asks for information rather than conditioning assent.
- Its wording preserves the existing offer.
- The surrounding facts do not show a new proposed bargain.
Answer: This is likely an inquiry, not a counteroffer, under the stated facts.
Three offers with different risk
Scenario: Offer A is highest but depends on sale of another home. Offer B is lower cash with no appraisal contingency. Offer C is between them with strong financing and flexible possession.
- Price is only one comparison dimension.
- The seller may evaluate net, certainty, timing, and lawful preferences.
- The listing agent must present the offers and explain their terms rather than choose for the seller.
Answer: The seller may lawfully choose any offer based on legitimate transaction criteria, not automatically Offer A.
Same agent has two buyer clients
Scenario: One designated agent helps two buyer clients prepare offers for the same condominium and knows the seller will review both that evening.
- There are two clients of the same designated agent.
- The offers concern the same unit and will be considered contemporaneously.
- The Illinois rule requires written disclosure and referral upon a client's request.
Answer: The agent must provide contemporaneous-offer disclosure to both clients and honor a referral request.
Seller counters two buyers
Scenario: A seller signs separate counteroffers to Buyer A and Buyer B, each stating that acceptance creates a binding purchase contract. Both remain open, and both buyers accept on time.
- Each seller document is capable of acceptance.
- The negotiation chains do not cancel each other automatically.
- Two timely acceptances can create incompatible contractual duties.
Answer: The seller has created serious multiple-contract liability risk.
The O-F-F-E-R-S negotiation test
- Open proposal: identify the exact offer still capable of acceptance, its parties, deadline, and essential terms.
- Formation response: classify the next communication as acceptance, inquiry, rejection, counteroffer, revocation, or invitation.
- Flip roles: after a counteroffer, rename the counterofferor and new offeree before analyzing the reply.
- Each chain: keep competing buyers, escalation terms, backup status, and communications in separate timelines.
- Rules and duties: apply timely presentation, confidentiality, client direction, fair housing, and contemporaneous-offer disclosure.
- Signed and communicated: confirm authority, signature, effective delivery, complete document, and final contract status.
- Event
- Acceptance
- Who acts
- Offeree
- Effect on current offer
- Forms contract if valid and effective
- Next power
- Contract duties replace offer power
- Event
- Counteroffer
- Who acts
- Offeree
- Effect on current offer
- Usually rejects current offer
- Next power
- Original offeror becomes new offeree
- Event
- Rejection
- Who acts
- Offeree
- Effect on current offer
- Ends power of acceptance
- Next power
- Only renewed offer can revive
- Event
- Revocation
- Who acts
- Offeror
- Effect on current offer
- Withdraws before effective acceptance
- Next power
- No acceptance unless protected option
- Event
- Expiration
- Who acts
- Time or stated event
- Effect on current offer
- Offer lapses
- Next power
- Late response is ordinarily new offer
Where do similar terms create traps?
- Trap
- Assuming a signature always means acceptance
- Correction
- Check every inserted, deleted, and changed material term before classifying the response.
- Trap
- Forgetting role reversal
- Correction
- The original offeree becomes counterofferor, and the original offeror becomes new offeree.
- Trap
- Reviving a rejected offer automatically
- Correction
- Rejection or counteroffer usually ends the original, which requires renewal or a new offer to return.
- Trap
- Calling every question a counteroffer
- Correction
- Distinguish a request for information from a response conditioned on changed terms.
- Trap
- Ignoring communication
- Correction
- Track authorized delivery and effective receipt rather than treating an undisclosed signature as enough.
- Trap
- Assuming highest price must win
- Correction
- A seller may weigh complete lawful terms, net, timing, and performance risk.
- Trap
- Countering several buyers
- Correction
- Use a carefully managed revision invitation or another approved process to avoid multiple acceptances.
- Trap
- Inventing a competing offer
- Correction
- False claims about competition can be deceptive, unethical, and disciplinary.
- Trap
- Sharing confidential terms casually
- Correction
- Follow client direction, confidentiality duties, applicable law, and sponsoring-broker procedure.
- Trap
- Treating highest-and-best as an auction
- Correction
- It is an invitation for proposals unless a separate auction framework clearly applies.
- Trap
- Making backup dates run too early
- Correction
- Read which deadlines begin at backup signing and which begin only after activation.
- Trap
- Missing same-agent disclosure
- Correction
- Illinois requires written disclosure for contemporaneous offers by two or more clients of the same designated agent and referral on request.
Can you separate the terms in a new fact pattern?
These questions are original study items aligned to the published outline. They are not copied, recalled, or predicted PSI questions.
1. A seller changes the closing date before signing and returns the buyer's offer. What did the seller make?
- Counteroffer
- Acceptance
- Deed
- Assignment
Show answer and explanation
Answer: Counteroffer
The seller materially changed the proposal, so the response is a new offer.
2. After a seller counteroffer, who has the power to accept?
- The buyer as the new offeree
- The county recorder
- The seller only
- The listing photographer
Show answer and explanation
Answer: The buyer as the new offeree
The counteroffer reverses the parties' offeror and offeree roles.
3. Must an Illinois seller choose the highest-price offer?
- No, the seller may compare all lawful terms and risks
- Yes, regardless of contingencies
- Yes, if an agent prefers it
- No, because offers never bind anyone
Show answer and explanation
Answer: No, the seller may compare all lawful terms and risks
Price is only one transaction term, although the decision must remain lawful and consistent with existing obligations.
4. When does Illinois contemporaneous-offer disclosure apply?
- The same designated agent has two or more clients whose offers on the same property will be considered at the same time
- Any two listings exist in a city
- A seller receives one offer
- Two unrelated agents attend an open house
Show answer and explanation
Answer: The same designated agent has two or more clients whose offers on the same property will be considered at the same time
The disclosure addresses a specific same-agent client conflict, not every multiple-offer situation.
5. A seller signs binding counteroffers to two buyers, and both accept on time. What is the main risk?
- The seller may have incompatible contracts with both buyers
- Neither acceptance can ever matter
- Both buyers automatically receive half title
- The listing agreement becomes a deed
Show answer and explanation
Answer: The seller may have incompatible contracts with both buyers
Parallel counteroffers can each be accepted unless the documents prevent that result.
Where do these ideas appear on the outline?
- Topic
- Offer
- What to know
- Offeror, offeree, present intent, definite terms, property, price, payment, closing, contingencies, signature, deadline, delivery, and power of acceptance
- Best exam move
- Choose offer when a definite proposal invites assent that will form the contract without further negotiation.
- Topic
- Counteroffer
- What to know
- Material change, rejection, new offer, reversed roles, counterofferor, new offeree, price, date, credit, contingency, signature, expiration, and communication
- Best exam move
- Treat a changed response as a new offer and relabel the parties before evaluating the next act.
- Topic
- Multiple offers
- What to know
- Independent buyers, competing proposals, presentation, seller choice, timing, confidentiality, lawful criteria, revised offer invitation, escalation, backup, and recordkeeping
- Best exam move
- Analyze each offer separately and do not combine price or terms across documents.
- Topic
- Offeror and offeree
- What to know
- Maker, recipient, power to accept, counteroffer role reversal, withdrawal, rejection, lapse, incapacity, death, option, and proof
- Best exam move
- At each step, name who presently holds the power of acceptance.
- Topic
- Definite terms
- What to know
- Parties, property description, purchase price, financing, earnest money, closing, possession, included property, contingencies, and signature
- Best exam move
- A proposal must be definite enough that acceptance creates an enforceable bargain rather than another negotiation round.
- Topic
- Mirror-image acceptance
- What to know
- Exact terms, unconditional assent, no material change, signature, timely delivery, method, communication, effective date, and objective intent
- Best exam move
- A response saying yes while changing price, closing, or another material term is a counteroffer, not acceptance.
- Topic
- Inquiry
- What to know
- Question, clarification, request, possibility, would consider, no rejection, no changed commitment, context, objective meaning, and open offer
- Best exam move
- Distinguish asking whether the offeror might change a term from conditioning acceptance on that change.
- Topic
- Rejection
- What to know
- Offeree decision, communication, termination of power, counteroffer, no automatic revival, later new offer, record, and finality
- Best exam move
- Once rejection is effective, the offeree cannot later accept unless the offeror renews or makes a new offer.
- Topic
- Revocation
- What to know
- Offeror withdrawal, communication before acceptance, direct notice, reliable indirect information, option exception, expiration, and proof
- Best exam move
- Revocation normally must become effective before acceptance and cannot defeat a binding option during its protected period.
- Topic
- Expiration and lapse
- What to know
- Stated deadline, reasonable time, calendar calculation, receipt, time zone, weekend, extension, late acceptance, counteroffer, and waiver
- Best exam move
- A late signature is usually a new offer unless the original offeror validly treats timing differently.
- Topic
- Communication
- What to know
- Delivery, receipt, email, electronic signature, portal, agent authority, actual notice, proof, timestamp, acknowledgment, and complete document
- Best exam move
- Do not stop at a signature; determine whether and when the acceptance reached the required person or system.
- Topic
- Seller choices
- What to know
- Accept, reject, counter, invite highest and best, allow expiration, backup position, no duty to highest price, net terms, risk, timing, and lawful decision
- Best exam move
- The seller chooses among lawful alternatives after the licensee timely presents and explains the offers.
- Topic
- Offer comparison
- What to know
- Price, seller net, financing, cash, appraisal, inspection, title, closing, possession, earnest money, credits, home-sale contingency, and certainty
- Best exam move
- Compare economic value and performance risk rather than ranking on price alone.
- Topic
- Highest-and-best invitation
- What to know
- Invitation, not counteroffer, equal deadline, buyer choice, revised offer, no guarantee, seller reservation, communication, confidentiality, and documentation
- Best exam move
- An invitation to improve does not create a contract and should not be phrased as acceptance or a binding counteroffer.
- Topic
- Escalation clause
- What to know
- Qualifying competing offer, increment, ceiling, proof, net comparison, cash versus credit, cap, appraisal, seller acceptance, confidentiality, and ambiguity
- Best exam move
- Calculate only after verifying the triggering offer and every defined comparison term.
- Topic
- Backup offer
- What to know
- Existing primary contract, activation event, notice, priority, buyer withdrawal, deposit, contingency dates, closing period, release, and no interference
- Best exam move
- A backup contract does not replace the primary contract until the stated activation event occurs.
- Topic
- Illinois agent duties
- What to know
- Timely presentation, all offers, client waiver, best interests, lawful directions, reasonable skill, confidentiality, minimum services, notices, negotiation, and records
- Best exam move
- Present every offer as required and let the client make the decision without steering for licensee self-interest.
- Topic
- Contemporaneous buyer clients
- What to know
- Same designated agent, two or more clients, same parcel or unit, preparing offers, making offers, simultaneous consideration, written disclosure, physical or electronic, referral request, and confidentiality
- Best exam move
- Give the specific Illinois written disclosure and provide another designated agent when an affected client requests referral.
How do you make the distinction stick?
- Session
- Session 1
- Focus
- Track one offer chain
- Proof you are ready
- Label offeror, offeree, open offer, response, deadline, and contract status after every step in 25 timelines.
- Session
- Session 2
- Focus
- Classify responses
- Proof you are ready
- Sort 30 communications into acceptance, counteroffer, inquiry, rejection, revocation, expiration, or invitation.
- Session
- Session 3
- Focus
- Compare complete offers
- Proof you are ready
- Rank price, net, financing, appraisal, inspection, closing, possession, deposit, credits, and home-sale risk in 12 offer sets.
- Session
- Session 4
- Focus
- Manage multiple-offer tools
- Proof you are ready
- Resolve highest-and-best invitations, escalation formulas, backup activation, simultaneous counteroffers, and confidentiality in 15 scenarios.
- Session
- Session 5
- Focus
- Apply Illinois duties
- Proof you are ready
- Explain timely presentation, client waiver, minimum services, lawful direction, confidentiality, contemporaneous disclosure, and referral without notes.
- Session
- Session 6
- Focus
- Run the O-F-F-E-R-S test
- Proof you are ready
- Score at least 90% and state open proposal, response, roles, chain, duties, and communication for every miss.
Do not count recognition as mastery. Close the notes and explain the rule, apply it to a new fact pattern, and identify why each distractor fails.
Turn the comparison into a test-day decision
From concept to decision
Drill this topic, then review the explanation
Pass Illinois gives you original national and Illinois questions, topic-by-topic study, clear explanations, timed practice, flashcards, progress tracking, and Math Coach. Start free, find the weak distinction, and focus the next session there.
Questions students ask about Offer vs. Counteroffer vs. Multiple Offers
What is an offer in a real estate transaction?
An offer is a definite proposal showing present intent to be bound if the offeree accepts. A real estate purchase offer normally identifies the parties, property, price, essential payment and closing terms, and an acceptance deadline, and it is signed as required. Advertisements and listings are generally invitations to negotiate rather than offers to everyone.
What is a counteroffer?
A counteroffer is a response that rejects the pending offer under the standard exam rule and proposes a new offer with changed terms. The original offeree becomes the counterofferor, and the original offeror becomes the new offeree. The new offeree may accept, reject, counter again, or allow it to expire.
What are multiple offers?
Multiple offers exist when a seller has more than one buyer proposal to consider. They are independent offers, not a single auction or automatic bidding contest. The seller may accept one, reject offers, counter one, invite revised offers, or allow them to expire, subject to existing obligations, lawful instructions, and fair-housing rules.
Does a counteroffer terminate the original offer?
Under the standard exam rule, yes. A material change communicated before contract formation rejects the original and creates a new offer. A mere inquiry or request for information may not be a counteroffer. Contract-specific attorney-review procedures can also change the analysis, so read the clause.
Must an Illinois seller accept the highest offer?
No. A seller can compare price, net proceeds, financing strength, appraisal exposure, inspection, closing date, possession, property-sale risk, deposit, credits, and other lawful terms. The decision cannot violate an existing contract or fair-housing and civil-rights law.
Must an Illinois licensee present every offer?
A licensee representing a client must timely present all offers to and from the client unless the client has waived that duty. Exclusive brokerage agreements also include minimum offer-and-counteroffer services. The licensee presents and advises, while the client chooses.
Can a seller counter more than one buyer at the same time?
It creates serious risk because more than one buyer could accept, leaving the seller with conflicting contracts. A seller can instead invite buyers to submit improved offers without making binding counteroffers, but the communication must be carefully worded and handled under brokerage and legal guidance.
What is Illinois contemporaneous-offer disclosure?
When the same designated agent represents two or more clients making or preparing offers for the same property that the agent knows or has reason to know will be considered at the same time, the agent must disclose that situation in writing to those clients. A client requesting referral must be referred to another designated agent.
Can a listing licensee reveal another buyer's price?
Not merely to increase bidding. The licensee must follow the seller's lawful direction, agency and confidentiality duties, the way the information was received, applicable law, and company procedure. A licensee must never invent a competing offer or misstate its terms.
Are these official PSI exam questions?
No. They are original questions aligned to the national Contracts outline effective June 24, 2026 and current Illinois law. The PSI bulletin, Illinois statutes, administrative rules, federal fair-housing authority, and official Illinois court opinions were reviewed through August 1, 2026.
Primary sources
- PSI Illinois Candidate Information Booklet dated June 24, 2026
- Patel v. McGrath, Illinois Appellate Court offer, counteroffer, and attorney-review analysis
- Ansonia Properties v. Vasilj, official Illinois Appellate Court order addressing offer timing and counteroffers
- 225 ILCS 454/15-15 and 15-75, current Illinois offer-presentation, client, and minimum-service duties
- 68 Illinois Administrative Code 1450.830, current contemporaneous-offer disclosure rule
- 68 Illinois Administrative Code 1450.900, current Illinois unprofessional-conduct rule
- 68 Illinois Administrative Code 1450.775, current Illinois transaction-document rules
- U.S. Department of Justice, current federal Fair Housing Act overview
The current official outline controls the tested scope. Statutes, regulations, and official agency materials control when a general study rule and a jurisdiction-specific rule differ.
Editorial status
Checked against primary sources
The Pass Illinois editorial team last checked this guide on August 1, 2026. Every practice question is an original study item, and the source links above let you verify the rules that support the lesson.