Buying a house or a property in the UK can be a pretty complicated process – and let’s be honest, a bit stressful too. There’s all the mortgage paperwork, the property chain to navigate, and the negotiation that goes on during a property purchase. No wonder a lot of buyers rely on estate agents, property experts, and local solicitors like Graham Evans and Partners in Swansea to help steer them through it all, and sort out the sale of their property.
But the challenges don’t stop there. Buyers and sellers have got to be able to understand all the terminology used in property listings and the wider property market. Estate agents often use specific phrases to describe a property’s price, or how an offer should be submitted. One of the most common ones you’ll come across is the asking price – which is basically the amount the seller hopes to get when they finally sell.
Sometimes though, when you’re browsing through property listings, you’ll see a property listed with a phrase like “Offers in Excess Of”. And to be honest, this can be pretty confusing for buyers who are trying to decide what price to offer on a property.
“Offers in Excess Of”, often shortened to OIEO, is a pricing method where the seller is saying, “I’m prepared to consider offers at this minimum price – but I’m really hoping you’ll come in a bit higher”. In many ways, it’s like a starting point for offers or bids.
For example, if you see a property listed as Offers in Excess Of £250,000, it tends to suggest that buyers should generally expect to offer more than that if they want to be taken seriously as interested buyers. Estate agents sometimes use this approach to encourage competitive bidding, create a bidding war, and increase the final property sale price.
Many buyers also browse properties on platforms like Rightmove or Zoopla to get a feel for a property with an OIEO price before deciding what to offer.
What Is the Meaning of “Offers in Excess Of” and What Does OIEO Stand For?
The phrase “offers in excess of” is a pretty common one in UK property listings – and it’s a type of guide price that shows the lowest figure the seller is prepared to consider when buyers submit offers.
For instance, if a property has an OIEO price of £275,000, the seller is basically saying that the minimum price they are likely to accept is around that amount. But buyers may still decide to offer on an OIEO property at a slightly lower figure – although in most cases, the seller is hoping to get bids above the listed price.
This pricing method is often used to encourage multiple offers – particularly in an active property market where several interested buyers may be competing for the same property.
Why Estate Agents Use OIEO Pricing When Listing a Property
There are loads of reasons why estate agents choose to use OIEO pricing when listing a house, or marketing a property with an OIEO price.
Attracting More Buyers
One reason sellers use OIEO is to get their property seen by more people. If the OIEO price is lower than what the seller ultimately hopes to achieve, the property is more likely to appear in more search results on Rightmove.
This can increase the number of viewings and generate interest from potential buyers who may later decide to make an offer on a property with an OIEO price.
Encouraging Competitive Offers
Another reason sellers use this strategy is to encourage buyers to come in with their highest offer. When lots of buyers are interested in the same property, this pricing method can create competition, which may lead to the seller getting offers above the stated price.
When a Property Is Hard to Value
In some cases, sellers choose OIEO pricing when the property is hard to value. This can happen if the home is unique, newly built, architect-designed, or located in an area where there are few similar properties for comparison.
When there’s limited data on property values in the area, estate agents might set a minimum price, and then wait to see what offers buyers are willing to make.
When Sellers Believe the Property Is Worth More
Occasionally, sellers think their property is worth more than the estimated valuation, or more than what they originally paid for it. Using “offers in excess of” can encourage buyers to consider paying more than the initial listed price.
Can You Offer Less Than the OIEO Guide Price?
One of the most common questions buyers ask is whether they can offer less than the OIEO price, or submit a lower offer.
Well, the truth is that buyers may submit a lower offer if they genuinely believe the property is worth less than the stated price. While the seller may prefer offers above that figure, it doesn’t mean a bid below it will automatically be rejected.
Buyers might decide to offer less than the asking price for loads of reasons, such as:
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The property has been on the property market for a long time
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Comparable similar properties have sold for a lower price in the area
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The buyer is in a strong position to complete the property purchase quickly
When you submit a lower offer, it can often help if you give a good reason for it, and show that you’re a serious buyer to boot. Estate agents tend to value certainty and speed when deciding to accept an offer, or consider offers from other interested buyers.
Studies have shown that in the UK property market, many homes eventually sell for less than the asking price, even if the property was first marketed as “offers in excess of”.
What Is the Difference Between an Asking Price, Fixed Price, and OIEO?
The asking price is what the seller usually hopes to get when they sell.
An OIEO price, however, represents the lowest figure the seller expects when they receive offers. It signals that the seller would prefer bids higher than the stated amount, although the final decision always depends on what the seller is willing to accept.
A fixed price property, on the other hand, is a set amount the seller is asking for, and they’re less likely to budge.
Most of the time, the final sale price of a property will depend on how many other buyers are out there, the state of the property market, and how many interested buyers put in offers.
How to Make an Offer on an OIEO Property
If you decide you want to make an offer on a property with an OIEO price, then it’s a good idea to research the local property prices and compare it to similar properties in the area.
Buyers should consider what they believe the property is worth, their budget, and whether they are willing to offer above or below the stated price.
When making an offer, it can also help to demonstrate that you are financially prepared to buy the property and can proceed with the purchase quickly. This may make the seller more likely to accept an offer, even if it’s a bit lower than expected.
Other Property Listing Terms: Guide Price, Asking for Offers, and More
In addition to “offers in excess of”, there are other terms you might come across when browsing property listings.
Price on Application
The phrase “price on application” is often used for very high-end or exclusive homes. Instead of showing the price publicly, the estate agent will ask potential buyers to request the property valuation directly.
This approach is often used for luxury homes, where sellers prefer to discuss the pricing privately.
Offers Invited
When you see “offers invited”, it means the seller hasn’t set a fixed price for the property. Instead, they are inviting buyers to put in offers, and help determine the market value and potential sale price.
This approach is sometimes used when a property is tricky to value, or when the seller wants to see how many other buyers are interested.
Is It Wise for Estate Agents to Use OIEO Pricing?
One reason that many buyers get confused is that “offers in excess of” is less straightforward than simply listing a property at a fixed price. Some buyers might think it suggests they need to make a significantly higher bid, which might put them off from making a bid in the first place. Others simply think the OIEO price is the market value of the property.
For sellers who want to sell your home or sell a property quickly, however, this strategy can sometimes help attract more interest and encourage competitive offers.
In the end, whether OIEO pricing works or not will depend on lots of factors, including local property values, the type of property being sold, and the state of the property market.
Both buyers and sellers should take time to research property prices, review similar properties, and consider professional advice before deciding what price for a property is reasonable.
Frequently Asked Questions (FAQ)
Can I make an offer below the OIEO price?
Yes, you can, but sellers often prefer to get offers above that figure.
How do I make an offer on an OIEO property?
First of all, research the local property listings, look at similar properties, then put your offer in using an estate agent, and highlight how ready you are to move forward.
What is the difference between OIEO and a fixed price property?
OIEO is the seller’s minimum price they’ll consider, often to get in higher offers. A fixed price property is a set amount, and not open to negotiation.
Why do sellers use OIEO pricing?
Sellers often use OIEO to get more viewings, encourage competitive bids, and land the highest offer.
What does “offers in excess of” actually mean?
It’s a guide price that shows the seller’s minimum expectation, while also encouraging buyers to bid higher than the stated price.