What’s the Meaning of OIEO in Property Sales?

You may have seen us talk about property jargon in the past and over time, we hope we manage to explain more than enough of the varied terminology you’ll encounter when selling a house. One acronym you’ll see a lot of is OIEO, and whilst it might sound a little like the chorus of Old MacDonald Had a Farm, we can guarantee there is nothing agricultural about it. OIEO stands for Offers in Excess Of and is used by those selling property where they set a clear starting point offers can be made at. In this edition of our blog, we break down everything about OIEO so you know whether it’s a tactic worth employing, or one that could see the sell house fast aims you have dissipated.

What does offers in excess of mean?

When a property is listed as OIEO (Offers In Excess Of), it means that the seller is looking for offers on the property that are over the amount it is listed for. Compared to the more typical listings where a price is a guide price that may see buyers come in with offers under the listed price, OIEO means offers above that price are all that will be entertained.

Can you offer below offers in excess of?

The seller has the house listed at this price and will only take offers above this amount. You could be thinking about OIRO. This is Offers in The Region Of. This is where an offer could be made on a property that is either more or less than the listed price. Some buyers will test the water with an offer below the OIEO value and a seller may find that, if the property has been sitting on the market, it could be better to accept it. Much depends on how the market is at the time, how long the property has been listed for and whether the price they have it listed at is significantly higher than others in the area.

Are there benefits to listing a home as OIEO?

There can be a few benefits choosing to list property like this, but it also comes with an element of risk. In terms of benefits, let’s take a look.

Price compromise

The estate agent may see the property worth one price, but a seller may think it is worth more. By listing a property with offers in excess of, it shows interested parties that you have a very exact starting point and would be expecting offers above that price. Estate agents sometimes suggest OIEO for properties that are harder to value. For example, if lots of money has been spent on upgrading the home, and it is now significantly different to others in the area, it may be harder to price it accurately. Likewise, new houses could have been built around it that are of a much higher value, and now it becomes more difficult to find a suitable price for the older building.

A guaranteed minimum sale price

When a property is OIEO, it may have been listed this way to allow the seller to cover all the costs of selling a house. Some property firms offer to sell your house for free, with all legal costs covered, however, in most cases, there will be a bill for a host of services that selling a house requires. By listing a property as OIEO, the minimum figure listed ensures the funds for covering legal costs as well as representing a suitable house price are covered.

Build up interest in the property

Listing a property as accepting offers in excess of can potentially see more competition for the home. Listing with an OEIO lower than market value can see a spike in interest with competing bids battling against each other. This can then see the home eventually sell for more than the actual market price although this is of course, not guaranteed.

Are there disadvantages listing a property as accepting offers in excess of?

If a property is listed as OIEO, it can be beneficial to the seller as we mentioned above but it can also have the opposite effect.

Puts buyers off

If a buyer sees a property listed as OIEO, they may feel that the opportunity for any type of negotiation is lost and just back out from making an offer altogether.

Limits your market

Everyone has a budget and, in most cases, going over budget is either a complete no-go area or something that causes considerable stress as a buyer tries to juggle finances to make things happen. When properties are listed as OIRO, the buyer is aware that they may be able to offer a little lower than the listed price and still see it accepted, with OIEO, the buyer knows there is no wiggle room so look at alternate properties more suited to their budget.

Too much competition

It is often said there is no such thing as too much good competition, but in terms of property, it can be too much of a bad thing. If a home is listed as OIEO, it can begin a bidding war, but this could see multiple buyers pull out as they feel the market has got too hostile and costly. This could then limit it to just one party who could then still pull out should conveyancing raise any issues, or the costs put too much strain on their budget.

How much should be offered on a property listed as accepting offers in excess of?

Offers would typically be in excess of the amount advertised but if the property has become an unsellable house, the owner may be welcoming of offers close to the listed price. This will depend on how long it has been on the market, whether it is significantly different to other properties in the area and whether the price is a true reflection of the current market.

Ultimately, offers on properties with OIEO should be weighed up in two ways, speed or value.

Someone operating as a cash house buyer, for example, may have no chain and can purchase the home right away with an offer that is of less value than the highest one. This may generate a little less cash for the seller but completes the deal quickly.

If looking for the highest price, it could be that this is only possible upon the completion of their own property selling, and this could take months to go through. Sometimes the best offer is not in fact the highest one.

This is where Bettermove step in. We operate a totally stress-free route. to sale where your home will sell in as little as thirty days. With no legal fees and a fully managed process, the stress and risk associated with more typical sales paths is completely removed. We price your property realistically to encourage cash buyers to come forward and make an offer. With Bettermove, it’s never a case of over-promise and under-deliver. Instead, it’s a property sale that concludes just the way you want it to. With cash in the bank, a fast sale and no costly surprise fees. Contact our team today to find out more.