Buying or selling a property is an exciting journey, but the jargon along the way can be confusing. One common phrase you might come across is “offers in excess of” (OIEO). What does this actually mean, and how does it affect your buying or selling strategy? In this guide, we’ll clarify the purpose and implications of “offers in excess of” to help you make informed decisions throughout your property journey.
What Does “Offers in Excess of” Really Mean?
In the property market, “offers in excess of” signals that the seller is looking for offers above a particular price, which is often set by the seller or their estate agent as a minimum starting point. This strategy invites potential buyers to start their offers from this price and upward. For example, if a property is listed with “offers in excess of £300,000,” it means the seller hopes to receive offers higher than £300,000.
Why Do Sellers and Agents Use “Offers in Excess of”?
There are a few reasons why “offers in excess of” (OIEO) is a popular approach in property transactions:
- Attracting Broader Interest
A lower starting price can appeal to a wider range of buyers who may initially overlook the property if it were listed at a higher price. This tactic helps drive more viewings, which can lead to a higher level of interest and potentially a better final sale price.
- Encouraging Competitive Bidding
Setting a starting point for offers can create competition among buyers. When multiple buyers are interested, they may try to outbid each other, which can drive the final sale price above the starting point, benefiting the seller.
- Gauging Market Value
For sellers uncertain of their property’s true market value, listing at “offers in excess of” allows them to see how much interest and what price offers come in at. This method can reveal valuable insights into the local market and the level of interest in the property’s specific features.
When is “Offers in Excess of” Most Commonly Used?
You’ll often see “offers in excess of” used in the following scenarios:
- In High-Demand Markets: In areas where there is more demand than supply, listing at “offers in excess of” can generate significant interest and higher offers as buyers compete in a fast-moving market.
- For Unique or Highly Sought-After Properties: When a property has distinctive or rare features, such as a prime location, historical value, or custom renovations, OIEO can help sellers attract buyers who recognize the property’s unique qualities and are willing to pay a premium for them.
Other Pricing Terms to Know
While “offers in excess of” is common, there are other pricing terms in the property market you should be aware of:
- Fixed Price: The property is listed at a specific price, with no negotiation. Buyers must decide whether they’re willing to pay this exact amount.
- Guide Price: A guide price offers a suggested starting point for offers, but the seller may be open to offers above or even below this price, depending on market interest.
- Auction: In this approach, properties are sold through an auction process where buyers submit bids in real-time, with the highest bidder securing the property.
Is Using “Offers in Excess Of” a Fair Strategy?
The “offers in excess of” approach can be advantageous for both buyers and sellers when everyone understands its meaning. Sellers may achieve a higher sale price, while buyers can gauge competition and decide how much they’re willing to offer for the property. However, it’s important for buyers to research the market and get a sense of the true value of the property before making an offer.
Need Help Navigating the Market?
Now that “offers in excess of” is no longer a mystery, you’re one step closer to feeling confident about your property transaction. If you’re still unsure or have additional questions, consulting a professional estate agent can help. At JW Woods, we’re here to guide you, offering insights into pricing strategies, local market trends, and everything in between.
Happy house hunting, and remember, informed decisions are the best decisions in property!
Adapted from Moveiq
