- Official section
- National V: Contracts
- Broker weight
- 19% of the national broker portion
- Expected scored items
- Offer handling is part of about 19 of 100 items
Contracts topic guide
Multiple offers and counteroffers
A multiple-offer question is a timeline plus a duty map. Track each offer independently, identify who represents whom, protect confidential information, and let the seller choose among lawful alternatives.
What does this exam area cover?
Short answer: Know presentation, acceptance, rejection, revocation, expiration, counteroffers, seller selection, confidentiality, offer comparison, escalation clauses, best-and-final requests, backup offers, delivery and notice, Illinois minimum services, contemporaneous-offer disclosure, fair housing, and complete documentation.
The current national outline expressly tests proper handling of multiple offers and counteroffers. Illinois adds agency, minimum-service, confidentiality, and contemporaneous-offer duties. The exam favors accurate presentation and client direction, not secret manipulation of the process.
Practice the topic in Pass Illinois
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.
What is on the official outline?
- Topic
- Prompt presentation
- What to know
- Delivery to the appropriate broker, timely presentation, offer expiration, seller availability, written instructions, acknowledgment, record retention, and continuing duties
- Best exam move
- Do not hold an offer to favor another buyer or to manufacture urgency.
- Topic
- Seller decision set
- What to know
- Accept, reject, counter, invite improved terms, set a review time, continue marketing, choose a backup, or allow expiration, subject to existing obligations
- Best exam move
- The seller decides; the listing licensee explains lawful options and material differences.
- Topic
- Whole-offer comparison
- What to know
- Price, net proceeds, loan type, cash, appraisal risk, inspection, deposit, closing, possession, property-sale contingency, credits, personal property, and certainty
- Best exam move
- Highest price and best overall offer are not synonyms.
- Topic
- Acceptance
- What to know
- Unequivocal assent, authorized signature, timely response, delivery or notice requirements, electronic execution, exact terms, and effective formation
- Best exam move
- Signing alone may not finish formation when the offer requires delivery or notice.
- Topic
- Rejection, revocation, and expiration
- What to know
- Express rejection, withdrawal before effective acceptance, lapse of time, death or incapacity, destruction, illegality, communication, and proof
- Best exam move
- Put every event on the timeline and ask whether acceptance was already effective.
- Topic
- Counteroffers
- What to know
- Material change, new offeror and offeree, rejection of original, counteroffer deadline, acceptance, successive counters, initials, signatures, and clean document control
- Best exam move
- Changing price, financing, closing, possession, or another material term is not mirror-image acceptance.
- Topic
- Confidentiality and disclosure
- What to know
- Client motivation, price ceiling or floor, competing terms, existence of offers, seller direction, buyer authorization, material facts, and truthful communication
- Best exam move
- Never fabricate competition or reveal confidential bargaining information without authority.
- Topic
- Best-and-final process
- What to know
- Equal or targeted invitations, deadline, seller reservation of rights, buyer choice to revise or stand, delivery confirmation, changed circumstances, and documentation
- Best exam move
- An invitation is not a promise that every buyer receives another chance.
- Topic
- Escalation clauses
- What to know
- Triggering offer, increment, ceiling, net-equivalent comparison, proof, appraisal gap, confidentiality, financing qualification, acceptance mechanics, and attorney drafting
- Best exam move
- Calculate only after confirming that the competing offer qualifies under the clause.
- Topic
- Backup offers
- What to know
- Existing primary contract, contingent effectiveness, priority, notice of activation, deposit, due diligence, financing, termination right, continued marketing, and multiple backups
- Best exam move
- A backup does not replace the primary contract unless its activation conditions occur.
- Topic
- Illinois representation duties
- What to know
- Client interests, obedience to lawful directions, disclosure, confidentiality, skill and care, accounting, minimum services under exclusive agreements, and sponsoring-broker supervision
- Best exam move
- Advocate within the law while presenting facts accurately and preserving the client's decision.
- Topic
- Contemporaneous offers and fair housing
- What to know
- Same designated agent, multiple buyer or tenant clients, same property, offers considered together, written disclosure to every affected client, referral request, objective process, and protected classes
- Best exam move
- Keep the Illinois agency disclosure separate from ordinary offers received through different agents.
Which distinctions produce the most mistakes?
- Terms
- Highest offer vs. best offer
- Difference
- Highest refers to stated price. Best reflects the seller's lawful evaluation of net proceeds, risk, timing, contingencies, and other terms.
- Question cue
- Price alone versus complete package.
- Terms
- Acceptance vs. counteroffer
- Difference
- Acceptance agrees without material change. A counteroffer conditions agreement on changed terms.
- Question cue
- Mirror image versus qualified response.
- Terms
- Rejection vs. revocation
- Difference
- The offeree rejects. The offeror revokes before effective acceptance, unless an enforceable option or other rule prevents withdrawal.
- Question cue
- Recipient ends offer versus maker withdraws it.
- Terms
- Offer expiration vs. closing date
- Difference
- Offer expiration limits the time to accept. Closing date sets future performance after a contract is formed.
- Question cue
- Formation deadline versus performance deadline.
- Terms
- Disclosure vs. permission to disclose
- Difference
- Some facts must be disclosed by law or duty. Confidential bargaining information ordinarily requires authority before release.
- Question cue
- Material fact duty versus negotiating secret.
- Terms
- Best and final vs. counteroffer
- Difference
- A request for improved offers invites new proposals without necessarily creating an offer. A counteroffer contains definite terms capable of acceptance.
- Question cue
- Invitation to submit versus binding proposal if accepted.
- Terms
- Primary vs. backup contract
- Difference
- The primary contract currently controls the sale. A backup becomes operative as stated if the primary ends.
- Question cue
- Current priority versus contingent priority.
- Terms
- Multiple offers vs. contemporaneous offers
- Difference
- Multiple offers can come from unrelated buyers and agents. Illinois contemporaneous-offer disclosure concerns competing clients represented by the same designated agent.
- Question cue
- Several proposals versus same agent's competing clients.
- Terms
- Client direction vs. broker decision
- Difference
- The seller directs the lawful negotiating strategy and chooses an offer. The broker provides facts, advice within competence, communication, and documentation.
- Question cue
- Principal decides; agent facilitates and advises.
How should you solve a multiple-offer question?
- Separate each proposal into its own offer, counteroffer, acceptance, rejection, revocation, and expiration chain.
- Identify the client, the designated agent, the sponsoring broker, and any competing client represented by the same agent.
- Confirm which offers were delivered and presented, when, to whom, and under what lawful seller instructions.
- Compare net price, financing, contingencies, dates, possession, credits, property, deposit, and performance risk.
- Protect confidential facts, disclose what law or duty requires, and never invent a competing offer.
- Check whether any response is an acceptance, counteroffer, invitation, backup agreement, or merely negotiation.
- Document the seller's decision and every material communication without practicing law or discriminating.
- Seller response
- Accept one
- Legal effect
- Forms contract if requirements are met
- Primary caution
- Do not accept incompatible contracts
- Seller response
- Reject
- Legal effect
- Ends that offer
- Primary caution
- Document communication
- Seller response
- Counter one
- Legal effect
- New offer to that buyer
- Primary caution
- Original is generally rejected
- Seller response
- Invite revisions
- Legal effect
- Requests new offers
- Primary caution
- Not necessarily a counteroffer
- Seller response
- Choose backup
- Legal effect
- Contingent priority behind primary
- Primary caution
- Define activation
- Seller response
- Take no action
- Legal effect
- Offer may expire
- Primary caution
- Presentation duty still applies
How do the rules work in scenarios?
The highest price is not selected
Scenario: Offer A is $5,000 higher but depends on selling another home. Offer B has verified financing, no home-sale contingency, and the seller's preferred closing date.
- The seller may compare the whole package.
- Offer A carries additional timing and performance risk.
- The choice must remain lawful and free of protected-class discrimination.
Answer: The seller may select Offer B even though its stated price is lower.
Changed closing date
Scenario: A buyer offers $410,000 with a June 10 closing. The seller signs but changes closing to June 28 before returning the document.
- Closing is a material term.
- The response does not mirror the buyer's offer.
- The seller has become the offeror of new terms.
Answer: The signed change is a counteroffer, which the buyer may accept, reject, counter, or allow to expire.
Escalation calculation
Scenario: A buyer offers $500,000 and agrees to exceed a qualifying competing net offer by $2,000 up to $520,000. A qualifying offer has an equivalent net price of $514,500.
- Add the stated $2,000 increment to the qualifying net offer.
- The result is $516,500.
- The result remains below the $520,000 ceiling.
Answer: The escalation formula produces $516,500, subject to the exact clause and acceptance requirements.
Same agent, competing buyers
Scenario: One Illinois designated agent is preparing offers for two buyer clients on the same home and knows the seller will review them together.
- The buyers are separate clients of the same designated agent.
- Their offers will be considered contemporaneously.
- Every affected client must receive the required written disclosure and may request referral.
Answer: Give Illinois contemporaneous-offer disclosure to both clients and honor any referral request.
What are the common exam traps?
- Trap
- The seller must accept the highest price.
- Correction
- A seller may lawfully weigh the full offer, not price alone.
- Trap
- A licensee may delay one offer to help a preferred buyer.
- Correction
- Offers must be handled and presented according to duties and lawful instructions.
- Trap
- A signed change is an acceptance.
- Correction
- A material change creates a counteroffer even when the document is signed.
- Trap
- The original offer revives when a counteroffer is rejected.
- Correction
- The standard rule treats the original as rejected unless it is newly offered.
- Trap
- A listing agent may invent an offer to create urgency.
- Correction
- Fabricating competition is deceptive and violates professional duties.
- Trap
- Best and final guarantees every bidder another round.
- Correction
- The seller may accept an offer or change strategy unless bound by a specific commitment.
- Trap
- An escalation clause compares only headline prices.
- Correction
- The clause may require a qualifying offer and net-equivalent comparison after credits or terms.
- Trap
- A backup offer automatically displaces the primary contract.
- Correction
- It activates only under its written conditions after the primary ends.
- Trap
- Every multiple-offer setting triggers contemporaneous-offer disclosure.
- Correction
- The Illinois rule focuses on competing clients of the same designated agent.
- Trap
- The broker chooses which offer is best.
- Correction
- The seller chooses after receiving accurate information and lawful advice.
Can you answer these original practice questions?
These questions are original study items aligned to the published outline. They are not copied, recalled, or predicted PSI questions.
1. Which offer must a seller accept when three offers arrive?
- The first delivered
- The highest price
- The one recommended by the broker
- None automatically; the seller makes a lawful choice
Show answer and explanation
Answer: D
No general rule requires acceptance of the first or highest offer. The seller evaluates complete terms subject to duties and law.
2. A seller signs an offer after increasing the price. What has the seller made?
- Acceptance
- Counteroffer
- Option
- Backup automatically
Show answer and explanation
Answer: B
Changing a material term prevents mirror-image acceptance and creates a counteroffer.
3. Which fact ordinarily requires the most caution before disclosure?
- A known material defect
- The client's confidential price ceiling
- The property's street address
- The scheduled open-house time
Show answer and explanation
Answer: B
A client's bargaining limit is confidential information unless disclosure is authorized or required.
4. An escalation clause adds $3,000 to a qualifying net offer of $442,000 and caps price at $450,000. What price does the formula produce?
- $442,000
- $445,000
- $450,000
- $453,000
Show answer and explanation
Answer: B
The qualifying price plus the increment is $445,000, which is below the ceiling.
5. When does Illinois contemporaneous-offer disclosure apply most directly?
- Two listing agents work in the same city
- A seller receives any two offers
- The same designated agent represents competing buyers whose offers will be considered together
- A buyer asks for an appraisal
Show answer and explanation
Answer: C
The state disclosure addresses the conflict created when one designated agent represents competing clients on the same property.
How should you study this area?
- Session
- 1. Offer timelines
- Focus
- Presentation, acceptance, rejection, revocation, expiration, delivery, and electronic communication
- Proof you are ready
- Build five independent timelines without mixing the offer chains.
- Session
- 2. Seller choices
- Focus
- Whole-offer comparison, net proceeds, financing, contingencies, dates, deposits, and lawful discretion
- Proof you are ready
- Rank six offers using an objective comparison grid.
- Session
- 3. Counteroffers
- Focus
- Mirror image, material change, successive counters, deadlines, signatures, and document control
- Proof you are ready
- Classify ten responses as acceptance, counter, rejection, or inquiry.
- Session
- 4. Confidentiality
- Focus
- Material facts, client motivation, price limits, competing terms, seller authorization, and truthful statements
- Proof you are ready
- Sort twelve facts into disclose, protect, or seek guidance.
- Session
- 5. Advanced offers
- Focus
- Best and final, escalation clauses, net comparison, backup priority, activation, and risk
- Proof you are ready
- Solve six escalation and backup scenarios.
- Session
- 6. Illinois duties
- Focus
- Minimum services, designated agency, contemporaneous offers, referral, supervision, records, and fair housing
- Proof you are ready
- Score at least 90% and justify each answer with a duty or contract rule.
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.
Multiple Offers and Counteroffers FAQ
Must an Illinois seller accept the highest offer?
No. Subject to existing contracts and unlawful discrimination, a seller may weigh price, financing, contingencies, closing timing, possession, deposit, property-sale risk, and other terms. The listing licensee presents and explains offers but does not choose for the seller.
What may a seller do after receiving multiple offers?
A seller may accept one offer, reject offers, counter one offer, invite revised offers, or allow offers to expire, subject to the documents, agency duties, and legal obligations. Accepting incompatible contracts can create liability.
Does a counteroffer reject the original offer?
Under the standard exam rule, a counteroffer rejects the original and creates a new offer. The original offer does not automatically revive if the counteroffer is rejected unless the facts show a new offer or different agreed result.
Can a seller counter more than one buyer at a time?
Doing so can expose the seller to multiple acceptances and conflicting contract duties. A licensee should explain the risk, follow the sponsoring broker's process, use attorney-approved forms where authorized, and avoid creating incompatible binding agreements.
May a listing broker reveal another buyer's offer price?
Not merely because it may improve bidding. Disclosure depends on the seller's lawful direction, agency and confidentiality duties, applicable law, ethics obligations, and the terms under which information was provided. A licensee should not invent or misstate a competing offer.
What is an escalation clause?
It is a term that raises a buyer's price when a qualifying competing offer exists, usually up to a ceiling and by a stated increment. Drafting must address proof, net-price comparison, confidential terms, limits, and acceptance. Custom legal drafting belongs with an attorney.
What is a backup offer?
A backup offer is intended to become primary if the existing contract ends under stated conditions. It should define priority, notice, deadlines, deposit handling, contingencies, and the buyer's ability to withdraw before activation.
What is Illinois contemporaneous-offer disclosure?
When the same designated agent represents two or more buyer or tenant clients who are preparing or making offers for the same property that the agent knows will be considered at the same time, the agent must give written disclosure to every affected client. A client may ask for referral to another designated agent.
How should a licensee document a multiple-offer process?
Keep each offer chain separate, preserve delivery and presentation records, record lawful seller instructions, confirm material communications in writing, track expirations and responses, and retain required records through the sponsoring broker.
Are these questions copied from PSI?
No. Every practice item is original and aligned to the public contracts outline.
Primary sources
- PSI Illinois Candidate Information Booklet dated June 24, 2026
- Illinois Real Estate License Act of 2000
- Illinois Administrative Code, Real Estate License Act rules
- Cornell Legal Information Institute, contract
- Cornell Legal Information Institute, offer
- National Association of REALTORS, handling multiple offers
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.