You maybe browsing websites like Rightmove and might come across the words “OIEO” or “Offers In Excess Of“. You may not know what OIEO means or what you should do with a list price of this nature.
OIEO Meaning: OIEO is an abbreviation of the term Offers In Excess Of. Which actually means the vendors would like to receive offers in excess of the listed price. This is often a ploy by estate agents to drum up extra interest in a house.
Please read on to discover why this pricing strategy can backfire.
Why do estate agents use OIEO when selling houses?
The main reason why estate agents use Offers In Excess Of or OIEO is to drum up more interest in the property concerned. For example, if a house is worth say £350,000. But instead of being listed for this amount, it is list at OIEO £299,995.
For any buyer who has been searching the market for houses of this type, size and location will probably know this house is under-priced. It also opens the house up to those buyers who limit their search to £300,000. This might be enough to encourage both these types of buyer to view the property.
The idea being that house-buying is a highly emotionally charge purchase. If the estate agent has enough buyers view the house, this increases the chances of an offer being made.
It might be the buyers who found the property at just under their £300,000 budget may look to increase their budget. It’s also got the interest of other buyers thinking they may get a bargain. This is even though the price states “Offers In Excess OF”, which won’t stop buyers offering somewhere between £299,995 and £350,000. But is this a good strategy though?
OIEO how much to offer
If you see a house listed with the abbreviation OIEO next to the price you should still only offer what the house is worth to you. Which means you can offer over, under or exactly the OIEO amount. Estate agents are obliged to put forward all offers and the vendor has a choice whether they accept.
You may find the estate agent was trying it on and the house is actually only worth the OIEO price, or less. If the vendor doesn’t receive any offers other than yours, they may choose to accept your offer. This may be the case even if your offer was below the OIEO price.
Is it a good idea to use OIEO or Offers in Excess Of to sell a house?
Many buyers are immediately put off by the term “offers In Excess Of” or OIEO. This is because it’s confusing and can come across as a bit arrogant. It’s as if the vendor feels their house is worth more than it is.
Put another way, it can come across as if the market value is the price listed. But the vendor considers that their house is worth more than its market value.
So in my opinion don’t use this strategy, as it may well backfire on you. It may alienate a portion of your potential buyers. Which could mean the difference between selling your house vs the house sale stagnating.
I hope this article has helped about OIEO Meaning
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Article written by Russell Bowyer who has been investing in property since purchasing his first commercial property in the 1990's for his own Chartered Accountancy business. But his first property investment project was to turn an old dilapidated restaurant into a large 5-bed home, which he purchased for £117,500 and sold for £450,000 (to see an "after" photo of the house before it was sold see here: About). Russell owns a number of investment properties, which includes houses, flats and HMO's. More recently he has turned his creative side to investing in property using lease options. His largest lease option deal to date was to acquire 12 properties worth over £2 million for just £12, which means he paid just £1 to acquire each property!
