What is the difference between purchase price and offer price?

• A. The purchase price is the price agreed upon in the final contract; the offer price is the price the buyer offers.
• B. They are always the same.
• C. The purchase price equals the estimated property value.
• D. The offer price is set by the seller.

Answer: (A)

In real estate, two prices come into play: the offer price and the purchase price. The offer price is the buyer’s proposed amount when they submit an offer to purchase. It’s not binding until the seller accepts or a counteroffer is made and agreed upon. The purchase price is the amount that ends up in the signed purchase agreement—the final price both sides agree to and that becomes the amount paid at closing. They can be the same if the seller accepts the initial offer, or different if negotiations lead to counters or changes. This isn’t necessarily the same as the estimated property value (appraisal), and the offer price isn’t set by the seller—it’s determined by the buyer and then negotiated with the seller.