How much to offer (OIEO)

You may have seen an OIEO tag on certain property listings in portals (Rightmove, Zoopla) and in estate agent windows. If you like the property, but are unfamiliar with the term, you might not know where to start.

In this article, we break down OIEO and help you decide how much to offer.

What does OIEO mean?

While there’s plenty of complex property industry jargon around, OIEO is straightforward enough. It’s an acronym for ‘Offers in Excess Of’, a common term in real estate marketing. But what does ‘offers in excess of’ mean?

It means that the homeseller desires an offer greater than what’s advertised in the property price tag. It’s a clear message that the occupier is unlikely to accept anything lower, because they already know the minimum price they want for their home.

How does OIEO compare to ORIO and Guide Price?

A property advertised with Offers in the Region of (ORIO) or Guide Price suggests a starting point for negotiations. OIEO however, is a firm indication to the buyer of the minimum the homeseller wants.

Asking price and OIEO

The key difference between an asking price and OIEO is that an asking price is what the seller is looking for, whereas an OIEO is the minimum price the seller expects.

Why do estate agents use OIEO?

The main reason an agent would use OIEO is because their primary client, the homeseller, requested it. Naturally, most homeowners want to sell their homes for a price that’s higher than similar properties on the market. An OIEO tag, in theory, allows homesellers to dig their heels in and not settle for anything less than a specified amount.

While the homeseller is usually at the centre of any agent’s decision to market with OIEO, there are a number of other factors that could lead to the decision being made:

1. Selling at an auction

If the homeowners decide to sell at an auction or open house event, selling at OIEO can have its advantages. By marketing the property at a lower price than the Home Report’s valuation, OIEO should encourage a bidding war between parties. If the gamble pays off, the homeseller may achieve the price they wanted.

2. The property or area is hard to value

While local estate agents are experts at valuing properties, some homes can be hard to accurately value. This can happen for a number of reasons:

• The property has received a recent drastic makeover.
• The property has certain features (a historic building, unusual cosmetic features, large tracts of land) that make it hard to value.
• The property is located in an area where the values of nearby properties are dissimilar.

3. The homeseller has a strong attachment to their home

In some cases, the homeseller has such a strong attachment to their home that it has influenced their decision to place an OIEO tag on their property. They have a very firm idea of their property’s worth because of its sentimental (rather than physical) value. No amount of persuasion or knowledge can change their minds, and the agent has complied with their wishes.

4. Agent and homeseller agreement

Both the agent and homeseller have agreed that the only way forward to achieve the best price possible is with OIEO. It’s the same idea with an auction house. A low price will attract a wide range of potential buyers, and the resulting bidding war will push the final price to one the homeseller is happy with.

5. The homeseller thinks they know best

Some homesellers doubt the judgement of their agents. The vast majority of agents want the best for their client - they can only build their brand by offering a reliable service. However, some sellers believe their homes will only receive low offers, and that they’ll have to settle for a price below market value. So they instruct their agent to market their properties with OIEO.

6. The agent thinks it’s best

In a strong seller’s market, where there’s potential for bidding wars, the agent may recommend an OIEO tag as the best course of action.

How much should you offer an OIEO?

You should always offer what you think the property is worth. If you go to a viewing and like the property, you should consider submitting an offer, even if it has an OIEO tag. Agents have to pass on all offers to the seller (unless instructed otherwise).

Can you offer less than OIEO?

Yes, you can offer less than OIEO, but your offer will probably be rejected. If a seller has a very clear idea of their home’s worth, there’s not a lot you can do to persuade them. That said, every situation is different.

Homesellers always want to sell for more than their property’s market value, and some OIEO properties may be priced above their actual market values. If you offer less than the property’s OIEO price tag, you may still be giving the homesellers a good deal.

To make sure your offer is considered, add a note explaining why your offer is the best option. You may be able to finance the move instantly, or have enough cash to buy the property outright. Chain-free buyers (first time buyers) also have a bit more leeway in offer negotiations.

Top tip: If the property has been on the market for a while, and has reduced its price once or twice, the homeowner may be eager to sell, and you’re more likely to have your offer accepted below OIEO. Double check the prices of comparable properties in the area to see if its price reflects them. A similar property sold at a much lower price would indicate the OIEO is overpriced.

Before you make an offer…

1. Know your limit

Always work within your means. Don’t offer more than a certain amount. You have mortgage repayments to be thinking about.

2. Find your confidence

There’s nothing to lose! Be a confident buyer, even if it’s your first time.

3. Be ready to move on

Never get too hung up one one house. Properties sell quickly, and as the age-old saying goes, there’s plenty more fish in the sea.

Is it a good idea to sell my house with offers in excess of?

It depends. In some cases, an OIEO can see your property overpriced, leading to little interest and your listing price being reduced. Some tried and tested methods, like Guide Prices and Offers In the Region Of, may work better.

In other cases, an ‘offers in excess of’ tag could incite a bidding war, leading to offers driven above what you expected.

Ultimately, it’s a decision that you should arrive at with the advice of a trusted property expert - your estate agent. A good agent will impart the right advice, knowing exactly how to market and sell a property like yours.

Compare the best agents

As with insurance and phone deals, it’s worth shopping around. The logical way to find the best agent for your home sale is to compare the best agents in your area.

Our free Agent Comparison Tool pulls data from the Land Registry and property portals to collate the highest performing estate agents in your local area. To save you the time and trouble, the tool ranks them according to:

1. Most likely to sell your house quickly
2. Most likely to achieve your asking price
3. Most experienced in your area

Once you’ve found the best for your home sale, you can request a free valuation using our useful dashboard. It’s that simple. Sell your property quickly and get on with the house buying process.