The property search can be stressful at times, but just when you find the right home, it states an “offers over price“ or “offers in excess of“ which you either can’t afford or are not willing to pay.
So can you offer less than offers over price or offers in excess of? You can offer less than the offers over price on a house, but be prepared to have your offer rejected. Offers over is similar to offers in excess of (OIEO) but treat it no differently to a guide price. If the house has been on the market for a while the seller may consider your offer, especially if you are proceedable.
What is meant by overs over price?
When a house is listed with an offers over price or on Rightmove who use “Offers in excess of” or “OIEO“, means the seller is hoping to sell their house for more than the listed price.
It’s a tactic often used to generate more interest in a property as the offers over figure is usually below its real value. But don’t be fooled by this, as estate agents may be playing games.
What does offers in excess of Really Mean?
Houses listed as offer in excess of mean the seller is looking for buyers to offer in excess of the specified listing price.
Estate agents are legally obliged to put forward all offers, but are often reluctant to do so if it’s below the offers in excess of figure, as the price should already be below market value.
Guide price vs offers over vs OIEO
You should always consider the list price of a house as the negotiation starting point. This is no matter if it’s described as guide price vs offers over vs offers in excess of (OIEO). For all these listing descriptions you can offer less than the price listed.
If you think about list price for property as the starting point for price negotiation, it’s no different to properties sold at auction. In an auction, properties have a guide price which is usually the starting point.
However, very often the auctioneer has to begin an auction for a property at below the guide price. But it may not sell if the reserve is not met.
It’s no different with list price, be it with ‘offers over‘, ‘guide price‘ or ‘offers in excess‘ of (OIEO).
When should you offer less than the offers over price or offers in excess of?
- If you don’t mind having your offer rejected.
- If the house has been on the market for a while.
- After doing your research to show the house isn’t worth the offer over price.
- If your bid is higher than other bids, that are also below the offers over price, but is also lower than the listed price.
- You are in a strong buying position to proceed with the purchase.
Let’s take a look at these in more detail.
1. If you don’t mind having your offer rejected
If you don’t mind having your offer rejected. You should offer less than the offer over price or the offers in excess of in any event. The worst that will happen is your offer is rejected.
You may get resistance from the estate agent if you offer less than the offer over price, but ignore this as they are working for seller. Stick to your guns and offer what’s right for you. There’s always another house around the corner.
2. If the house has been on the market for a while
The offer over price tactic being used by the estate agent may simply be a ploy to get offers over, when in fact the house isn’t actually worth this in the first place.
If the offer over price is genuinely below its market value, the property should sell. But as already explained, buyers are not keen on this tactic.
A good indication of this is when a house has been on the market for a while. The top reason why houses don’t sell is because it’s over priced.
Time is the best value guide when it comes to property listings. The longer a house remains unsold, the more likely it’s over priced.
3. After doing your research to show the house isn’t worth the offer over price
If you’ve done your research. You’ve worked out what this property is worth to you. Then offer what you think is right.
When I see an ‘offers over‘ in the heading, I ignore it and go by the listed price and treat it as a normal listing. I will have done my research on what I consider the house to be worth on Rightmove and Zoopla etc. and will then offer what it’s worth to me regardless.
4. If your bid is higher than other bids, that are also below the offers over price, but is also lower than the listed price
If the offers already been placed on a house before yours are under the offer over price, it doesn’t make sense to offer over. This would indicate the house has been listed at too high a price in any event.
However, estate agents aren’t obliged to tell you how high or low the other offers are. They often do with a bit of prying, but I never truly trust estate agents, as they often make up ghost offers to get you to offer.
A tip to use is to ask the estate agent why the vendors haven’t accepted any of the offers so far made. Especially if they try to suggest that the sellers have had offers over the offer over price.
5. You are in a strong buying position to proceed with the purchase
When you submit any offer, the estate agent will normally want to know your position. They will enquire into how proceedable you are.
- Are you a cash buyer?
- Do you require a mortgage?
- And have you already sold your house?
- Are you chain-free?
Sellers don’t always take the highest offer and if you are in a strong position, a sensible seller should consider any reasonable offers. Even offers that are less than the offers over price.
What should you do before offering on a house?
Before you make any offer on a house you should do your research. Also, only ever offer what the property is worth to you. The estate agent may tell you the seller won’t accept an offer below the offers over price. But they are legally obliged to put all offers forward.
It might be that your offer is the only one made. Whilst the sellers may reject your offer to begin with, they may come back to you later when their house hasn’t sold.
But don’t start with an offer of what you think it’s worth, always reduce this by at least 10% or an even cheekier offer than that. This gives to wriggle room to up your offer, should the seller reject your first offer.
Also be careful in the offering process, which for most will be via an estate agent. It’s never a good idea to tell a home owner their property isn’t worth what it’s listed for.
People get very upset at this. Instead turn it around on you and tell the homeowner or the estate agent that your offer is what you can afford or that this is what the property is worth to you.
Is listing a house with an offers over price a mistake?
I’m not convinced that listing a house with an offers over price is the right approach. Many buyers are put off when they see an offers over price. Most buyers like to grab a bargain, but this implies you’re offering over what its potentially worth.
Some buyers are happy to pay more than asking price on a house. But this usually only happens if there are strong market conditions. Or if there’s a competitive bidding process. But in this case it’s the buyer’s choice to over-offer.
But when the listing is trying to force buyers to offer over the listed price, this can go against the grain for many.
This listing tactic therefore cuts down on your potential buyers and may work against you.
You are far better to list a house for what it’s worth or even a bit under. If the price is right and if the listing generates interest, you may end up with a bidding war in any case. Generally houses only sell for what they are worth to a buyer, but at a price the seller is willing to accept.
What does offers over mean in Scotland?
In Scotland the offers over price is the lowest price the seller will accept. You can still make an offer for less than the offer over price in Scotland.
But be aware you need to use a solicitor to put the offer on the property in Scotland which costs money.
Offers in excess of OIEO can I offer less?
Even if a house has been listed as offers in excess of or OIEO you can offer less. No matter how the listing is describe, you should only offer what this house is worth to you after doing your research.
Why do estate agents say offers in excess of?
The reason why estate agents say “offers in excess of” is they are looking for buyers to make offers in excess of the stated price.
This technique is used by agents to drum up more interest in a property. The offers in excess of (OIEO) price is supposed to be set at below market price, but this isn’t always the case.
Please don’t forget to read this before you leave…
Please don’t forget to also read this article to discover how you could save £71,475 on your next mortgage if you sell your house and rent before buying again. As I said earlier, even I was amazed when I did the calculations!
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