What does offers in excess of mean? In England

[DespairingHomeowner]

Can I please ask if I understand asking price & OIEO correctly...

1 - asking price : price for deal to be done there and then, serious offers might be at worst 10 pc below, more realistically within 5pc of asking

2- OIEO: why do this?

Concretely, am going to view 2 houses this weekend, first has asking price of 550, just on, but seems to me worth about 530

Second: would be 530 or so (asking price of v similar properties) but vv dated kitchen and needs some roof repairs, do I just ask agent what they are actually looking for, or is there a ‘formula’ I should know?

Recently bid on a house of ‘guide price’ 535, they wanted 510, eventually went to OIEO 500 and achieved that

I’m a bit confused so any help appreciated:)

Sorry, second is OIEO 500, but I’d expect an asking price of 530 based on comparable properties asking prices in last few months.... why OIEO, & is there a standard asking price to calculate from that?

We did OIEO at estate agent's advice. It was our bottom line. We wanted to buy a house we'd seen but it didn't stack up if we didn't get that amount. I realise now that MN hates it.
We only considered offers over that amount.

@PastMyBestBeforeDate: thank you

What would you consider appropriate offers for OIEO 500? Something like 505-525? Do you think the outcome was any difffor you vs an asking price of eg 5-10 pc over your bottom line?

House went on last weekend (it’s back on after being under offer so a bit wary tbh, but I do know the owners were in middle of buying which is attractive as I need to get my skates on finding somewhere!)

In my mind, everyone likes to feel they have 'got a bit of a bargain' - doesn't matter if you are buying a house or a car or a phone or a jumper, it's a lovely feeling to think you got it for less than the original asking price.
Some people will be very thorough with their research but many more won't.
If people have £520 they can spend as a maximum, they are MUCH more likely to try and buy a house marketed at £550, than OIEO £500. No-one is going to feel "that's a good buy" if you have paid more than the number written down in the marketing bumph.

Absolutely ask the agent. "What price are the vendors looking for to accept an offer?"

@BackforGood - that’s what I was thinking, OIEO 500 = ?505, it’s more than the asking price.??!!!

@BritInAus

Absolutely ask the agent. "What price are the vendors looking for to accept an offer?"

Thank you: this does seem a bit more sensible

I was asked earlier by an agent what my budget was, I said 550 (realise I should have said not much) & he’s emailed over a load at 575 so that seems to be his particular price structure...

Even in Scotland it can vary. We live in an area with good schools so there was an asking price of offers over £265k, home report (survey carried out by the vendor) value of £285k and we paid £295k. Around the same time I knew someone who paid less than home report value in a less desirable area.
Long story short ask the agent or your lawyer if you want a more objective answer.

I think we would have taken the price we listed but they offered about 2% over. They'd offered below which we'd refused. So that was their second offer.

They try for a high price but will tell the vendor to expect a bit lower. Say 5%. It’s not an exact science! It’s what one person will end up paying! It only needs one person to buy a house. OIRO tends to be a bottom line for most. Not much above will be good enough to buy it and occasionally only a bit below. A sale to a good buyer should count for something and the “bird in the hand” principle should always be considered. Grab a good enough offer. A better offer may never appear. If vendors have over priced and won’t negotiate, don’t overpay.

Thank you @PastMyBestBeforeDate and @Guymere

Based on this, seems like my range should be 490 -510 then?

It’s the second weekend for the OIEO house, went (back) on on the 5th of October, & vendors have a purchase in progress, so I guess they haven’t had the price they need offered vs waiting around for a high offer...

@Casmama: thank you, I thought the Scottish way was meant to be more straightforward, but now I’m not so sure :)

Don’t be bullied into offering a price that’s too high because the vendor is desperate. Pay what it’s worth. Not what they want because they are over-stretching for their next house.

You never know if more than one person wants a house. With a gem, the buyers can compete to get the house. It’s vital to know your top price and stick to it. We stuck at a price for a flat we liked. Didn’t get it. Two months later, I got a call from the agent. Were we still interested? No: we had completed that morning on another flat. The first vendor got £2000 more from the other “buyer” but they couldn’t actually get a mortgage! So going with the best buyer is vital for a sale. That’s not always the person who makes the highest offer but vendors don’t always see it that way.

It's also worth checking whether oieo is just standard for the estate agent, rather than the specific instructions of the seller. If it's just what the agent likes to use, then the seller may be open to lower offers!

@UnconsideredTrifles: thank you, just had a look

This agent does a mix of guide price (about 1/3), asking price (most) and not much OIEO...

OIEO is common in my area. Sometimes the price is low and there are multiple bids over the price as it’s a strategy to generate lots of interest. At other times, houses which are OIEO are priced high and sit on the market for ages.
Often, it’s the lowest price the vendor will accept.

The conclusion being, that I would just offer what I’m willing to pay for the house. Houses just find their value once potential buyers start viewing.

There’s a house for sale here priced at OIEO £250k. There are two almost identical houses on streets close by priced at £325k and £350k.

The vendors of the first house are either desperate to get rid, which I doubt, or have priced it such to generate more interest/viewings. I’m almost certain it’s the latter. I reckon they’re wanting £300k plus but have priced it that way thinking they’re being smart.

The whole thing is a minefield. As someone has said, just offer what you think it’s worth and be prepared to walk away.

@Remona: they’ve had a sale fall through so very likely

250k vs 350k is a massive difference. I think there’s a lot more to it. I’d think that to get lots of viewings/bids on a 340-350k house, you’d list it at OIEO 330k (that’s still the same price bracket on Rightmove).

Londoner here so please ignore the prices.

A 3 bedroom large flat in an Edwardian double fronted house in a good location. .Recently reduced from £1.1m - it was under offer at that price but a chain fell through. Listed at OIEO £1m. They listed it that way to get within Rightmove search thresholds. On the viewing, given the price drop the estate agent said the vendor was looking for £1,050,00. It has just had a sale agreed at £1,015,000.

@Bouledeneige: thank you for the numbers - London too, but rather more modest area

I ignore it. I still would offer below it but be prepared to negotiate. There's a house I'm keeping an eye on (just put mine on the market) and it has been reduced once and is now 'offers over'. But it's been sitting for a while as it needs a lot of work and is next door to a restaurant. If I pursue it I'd go 5% below that to start.

I’m surprised the flat was listed for OIEO 1M. Similarly priced house near me was up for OIEO 1.025M. I think that was with the view not to come up on Rightmove for people looking at up to 1M as it was worth a bit over.

OP, let us know how you get on with the viewings tomorrow.

Agree with others, it depends on the area, EAs practices, vendors' personal circumstances.

We viewed our now-house last July and it was OIEO 500k. We took it literally (and thought it was worth it) and offered 510k, which was accepted. Our house took a while to sell though, the sale fell through 4 times, but the vendor had stuck with us and it was eventually a happy ending for all. When we exchanged in January 2020 and had an honest conversation with the seller (a recent widower in his mid-70s), he said offers below £500k really offended them as he expected people to honour the OIEO instructions.

And by the way, we think what we've paid is about right and the vendor was not greedy/unreasonable. There was an almost identical house on the same road for sale at £550k (which we also viewed). We thought the price was totally OTT and it had been on the market for ages. About a month after we moved into our new house, the other house dropped in price to OIEO £530k. Of course we've been nosey and looked it up on Land Registry once the sale gone through - they've sold for... £510k!!! So they must've realised they were overpriced but still stuck with the OIEO label just to see if there were any desperado buyers out there.

Ours was OIEO 200k, because there were no comparable houses really and very very few in my postcode had sold so pricing was difficult.

It went for 220k but I'd never do OIEO again as so many people offered 200k not really getting the 'excess' bit!

I wish I'd listed it for 225k and held our for asking. And I was offended when I had offers below 200k!! I told estate agent beforehand to decline them.