OIEO - Offers

[francienolan]

Hello!

We have seen a house we like and are contemplating making an offer.

It is on for offers in excess of 230k. It has been on the market for several months--some houses in this area go quickly, others have hung around longer than they would have this year. I've been keeping and eye on what's on the market and what's being reduced etc for a couple of years and it seems like it has gone from being a seller's market to a buyer's market in this area during that time.

So my question is, in your experience, is OIEO usually indicative of the lowest price a vendor would accept? In this case, 230k? Or are offers (very) slightly under acceptable, at least as a starting off point to negotiate?

When we consider the location and how long we would want to stay in the house (it's a more long term option than many of the others we have seen) we do think it is worth somewhere in the neighbourhood of the 230k, whether that be a couple thousand above or below. Obviously we don't want to pay more than necessary, though.

My husband and I both go back and forth a little on whether to offer 230k or a couple thousand under. Both of us are of two minds! This is our first time buying a house so it would be nice to hear from others who have done/are doing this on this type of situation.

If it has been on the market for 'several months' that could be one of two things........ they are being stubborn about the price and will not, under any circumstances go below the £230K, or they have simply not had offers as people are put off by the 'OIEO' (which SO many people don't like), so they would snatch the hand off if someone were to offer them something relatively close to the asking price.

Nne of us can tell, so, If I were in a position to move (you say you haven't bought before so does this mean you are first time buyers with finance in place?), then I would put in an offer below the asking price and then gauge the response. You can always go back with either an asking price offer, or a compromise somewhere in between, bt it you offered a couple of thousand over, you'd always be wondering if you could have saved yourself £5k or £10K.

Thank you Backforgood! Good things to consider.

(you say you haven't bought before so does this mean you are first time buyers with finance in place?)

Yes, that's right.

With our current house we offered the full price (was on OIEO). The house and the location suited us well so we were happy to pay the price.

I just bought a house that was OIEO £340k - this was the minimum the assisted move people had set for the lady moving into a retirement complex. i offered £340k (house needs lots of modernising including a new boiler) and was being faffed around with for days. When I finally asked "Why the hold up are they expecting more money" the assisted move guy said yes - when I asked him what he said £1000!!! So I said I would be happy to split the difference and ended up paying £340500 but have been left loads of stuff like a washing machine (which I didn't need!) f/s fridge freezer, f/s dishwasher, shed full of tools, garden furniture (good quality stuff), curtains and blinds (admittedly crap but doing a basic job for now) so really don't think I've come off worst!

On OIEO I would always offer under that OIEO price. Always room to negotiate!

You can only try.

However I think OIEO often means that the vendors have a very fixed idea about what their house is 'worth', even if there is plenty of evidence otherwise.

But it depends of course on whether it's priced reasonably compared to recent sold prices (NOT asking prices) of similar in the area.

Ours was on OIEO 235, we ended up paying 237. However it had only been up a week, a smaller and older house down the road was up for OIEO 225 for months and ended up selling for 210. I think it depends on so many things!

OIEO and we got £10k of the price. You never know unless you ask.

Dd bought at 335k... was originally in at 375k and then reduced to oieo 350k
As always, offer what you think it's worth based on sold prices, if you can justify the price then offer it

Personally I'd ignore the OIEO and take that price as the asking price ......then offer whatever you want to offer. Your offer could be below that price if you want it to be.....the worst they can say is 'no'. It is probably an indication that they aren't prepared to go far below the price mentioned, so a significantly lower offer won't be entertained. You can offer the price mentioned or a price above.

You have to consider how long the property has been on for. If it's been on for a while, the seller will have to be more flexible to get a sale and be more open to offers below the figure mentioned. Check how lomg it's been on for and also if it is priced a bit high compared to similar properties. If however it's just come into the market and if you really really want it and also if you know lots of people want it, you might need to offer in excess of the figure mentioned.

These days with a slowish market in most places, sellers say OIEO to try their luck and because they don't want to take a price much below the figure mentioned. However, in the end, many do accept offers below that figure because those are the only offers they get. In today's market, I'd always try to lower offer first unless it was an unusual property in hot demand which I'd wanted for years and knew nothing similar would come up again. Unless people are beating down the door to offer in excess of the price mentioned (unlikely today) you can start low and always increase your offer if needed.

I'd always be disappointed if my first offer was accepted - it'd make me think I could have got the property cheaper and I'd always wonder about it.

Remember you can make more than one offer. Rarely is your first offer accepted, so don't stress about having to return with another offer.

And remember you can always go up.......and up and up and up if needed and you are prepared to. You can't really go down! Expect it to take a couple of days to get to an offer being accepted or realising that what you're prepared to pay just isn't enough for the seller and then walking away.

Especially as first time buyers, every £K counts. You do what to get it as cheaply as you can. Be realistic and not looking to go low just for the sake of it. Know the SOLD prices (look on right move for Sold instead of prices advertised at) of similar properties so you can be sensible in your offer. Also gather info about the seller from the estate agent - why are they selling and where are they going? This helps you guage how flexible they might be.

Some sellers over-price. Most will realise when they get no offers and be willing to accept a lower price, although it can take a while for them to reach that realisation. Others are unrealistic and remain unrealistic and unloveable on price....often those who don't need to move. If you get one of the latter there's not much you can do. The property you like probably isn't unique and given time there will be others that appear with vendors who are not fixated on a price they could have achieved 3 years ago but will never get at the moment.

Let us know what you decide to offer and how you get on. Best of luck.

Thanks very much everyone!

We did research on sold prices and no house in the same village has sold for under 260k in the last few years. Considering the location and size of the house we had pretty much settled on just going in with 230k and hoping to secure it (also that price is well under budget so it still leaves us spare money for redecorating). When I called the agent another offer had also gone in so he put our offer forward with that and we were accepted!

Afterward I found out our offer was almost exactly the same as the other one but as we aren't in a chain we were chosen by the vendor. Very glad it worked out that way!

Congratulations - you can be pleased you weren't pushed into a higher offer by the OIEO phrasing, which is designed to do that.

Hope everything proceeds smoothly for you now.

Top tip - when you get requests from solicitors or estate agents or lenders asking for documents or information, always try to complete that stuff and return it the same day or at least make a start on it. Your response to questions is one of the few things you can control in the whole process, so be speedy because the longer the process drags on for, the more chance of breakdown. Oh and keep telling the Estate Agent and solicitor anything which has happened from the lender or surveyor etc and update each with anything that has happened via the other and advise them to keep the seller updated. Communication and making clear that you are pushing forward from your end is also really important in keeping chains for breaking down - lack of information leads people to worry. Best of luck.

The house we are buying was on at OIEO £180k. We offered £180k and they didn't accept. The house had been on the market for a few months and they had had other offers. We really loved it so we went £185k and at that they took it off the market and agreed to leave all white goods.

The vendor was in no great rush to move though. They were both self employed tradespeople so could move their business when ready and they weren't looking at properties until they had a decent offer. They could afford to hold out for a price above £180k. Not all vendors would be able to so I think it would depend on the vendor's circumstances to some extent.