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All you have to do is politely decline the counter offer (in other words, don't sign it, and confirm with your agent that you don't want to negotiate further). As a courtesy, your agent will communicate with the listing agent about your position and decision.
If the seller walks away, there is usually no way to salvage the deal. If the seller makes another counter-offer, the buyer can either accept it, reject it, or make a new offer themselves. And if the buyer accepts the original offer, then both parties will move forward with the sale.
A withdrawal may be communicated by any usual means of communication, including a phone call, a text message or an email. To be effective, however, it is crucial that a withdrawal (also called a revocation) be communicated to the party who received the offer (called the offeree) before the offer is accepted.
Withdrawing a Counter Offer: Legally, all that is necessary to withdraw a counter offer is to communicate it is withdrawn. This may be done verbally, but it is better to do so in writing by using the Withdrawal of Offer (C.A.R. Form WOO) or simply to confirm and document a prior oral withdrawal in writing.
Revocation of Offers and Counteroffers The general rule is that an offer or counteroffer may be revoked at any time before acceptance by the other side.