If a seller receives an offer and makes a counteroffer while wanting to hold the earnest money, what should the listing agent do?

The correct approach is to present the counteroffer to the buyer, as this is a fundamental duty of a listing agent. When a seller receives an offer, the agent must communicate any changes or terms proposed by the seller, which includes counteroffers. Presenting the counteroffer ensures that the buyer is fully informed of the seller's intentions and allows for a transparent negotiation process. It reflects the agent's obligation to act in the best interests of the seller while facilitating effective communication between both parties.

In real estate transactions, maintaining clear lines of communication is essential, and presenting the counteroffer is a standard practice that aligns with ethical guidelines and legal requirements within the agency relationship. It’s important for the buyer to understand any changes the seller is proposing, which can lead to further negotiation or resolution.

The other options don’t fulfill the necessary responsibilities of the listing agent. For instance, rejecting the buyer's initial offer without presenting the counteroffer removes the opportunity for negotiation. Returning the earnest money prematurely could complicate the transaction and might not be appropriate until the offer and counteroffer processes are resolved. Calling the buyer to discuss the situation may not provide the formal documentation needed for the negotiation and could potentially cause confusion, as the counteroffer itself must be presented in writing.