Offered $180k for $189k house listing. Counter offer at $191k...?

There are likely other offers. You have no way of knowing, offers can not be disclosed.

you may have to review the law of offer and acceptance in your state and that would require an attorney. here's what i think happens [and your state's laws may say differently]: the usual deal on a RE sale is that the published offer [price] can be accepted and the first such acceptance takes the deal. However, if the potential buyer offers a lower figure, or wants various terms and conditions which amount to a counter offer, the old offer goes off the table and bargaining begins. the issue with the short sale is that the bank hasn't approved the sale price in advance -- and you were told this. it follows that the listed price is not a firm offer to sell, but only an indication of the likely price and that the bank will bargain if anyone shows 'serious' interest. under these conditions, it is perfectly acceptable for bank to consider all offers received within a reasonable time [60 days??] and then to counter offer to whichever potential buyer seems most likely to pay and make that counter at the highest price offered, or even higher. it is a bargaining situation, not a firm offer to sell.

Did you ask for any help with closing costs in your offer? This may be why they went over the list price. Typically, sellers only raise the list price if they have had mulitple offers or if the buyer wants help with closing costs.

When I bought my first home, I paid 1k over listing so that the seller would give me 3% towards closing costs. If you aren't asking for closing costs and it's been on the market for 6 months (you cannot know that there have been no offers... that's not public information) - I would go over asking (unless it's priced at a bargain). Ask your realtor what the comps in the neighborhood are going for... that will help you decide the true value. You might come back at 182k if you really want the place and you aren't asking for help with any costs... if they raise the price again, consider walking away.

In your offer, did you ask for seller concessions, like the seller pays closing costs, or other credits?

If so, the 191,500 may be to cover those monies, essentially splitting the difference.

Or maybe the property is a short sale and the bank will not accept any offer below a certain amount.

If your Realtor has not already explained this to you, something is wrong. Read your offer or ask your Realtor to do his or her job and educate you on the process.

It is also possible that the seller has had higher offers, or they just didn't like your offer and want to make sure you are serious.

Ask your agent for a CMA to make sure you are in the ballpark.

If this doesn't seem right to you, then go ahead and make an offer elsewhere.

Many times, the bank (or seller) will under price the house to get multi-offers, that drive the price up.

Before you make any offer (or a counter in your case), find out what the property is actually worth. Have your realtors give you recent SOLD comps of like properties. You may find that 191,000 is actually a great price or that 180,000 is still to much.

Walk away. Either the seller is crazy or there are other offers on the table for the house.

By now your realtor should have created a CMA (comparative market analysis - a list of "sold" houses just like the one you want to buy). It will indicate how much the house should sell for in this market. That way you aren't shooting in the dark.

If it were me, and there were multiple houses on the market, I would tell my agent to pull the offer and keep going. Who knows, the seller might re-consider. Afterall, price is just one factor in selling a house.

Sounds like another potential buyer bid either at or over the listing price. You may be in the middle of a bidding war.

Clearly your offer won't cut it. So raise it or walk away.

It may be an error. Contact the seller to verify.

stick to your guns and be prepared to walk away there are a lot of houses out there