OIEO

[hazandduck]

Sorry if this has been asked a million times but what are sellers expecting when they put a house at ‘offers in excess of.’

Do they expect people to offer that amount? Or 5k over or what? As lots of people initially offer lower than asking price don’t they? Or is it a massive insult if you offer that price.

I just find it confusing and don’t want to offend potential sellers if we love the house.

hi, I'm not a seller but I am in the process of buying a house that was market with " offers in excess of...". After two viewings, surveyor report and contacting the local council for more area info, it was not worth the market price whatsoever. It was actually in need of a alot of work. We made an offer based on the factors and reno costs to get the house up to scratch.. the vendor accepted . It helped that it was on the market for nearly 6 months I guess. Personally, I wouldn't really take notice of it, but it is an indication of the sellers expectations, but as we know the market is not moving for many because sellers expectations are mostly unrealistic. It really depends on how much you like their house, what you believe it's worth, and also take into consideration negative equity that could impact re-mortgaging. Unfortunately, all of this matters now for buyers and why many buyers are unwilling to meet sellers expectations. It's just the times right now and imo will be for a few years.

V good post from @cupcakesarelife.

Just offer what you think the house is worth, having done careful research and considered your own circumstances. Many properties are being reduced by unrealistic sellers/ agents across multiple regions so asking prices are very often too high in the current market.

Thank you both for your comments. It was reduced yesterday by 50k. We’ve had our eye on it for ages as it’s been on the market a couple of months, I think it sold then came back on for some reason. We’ve booked a viewing in light of this reduction in price but we also have a property to sell. And if they expect offers over we most likely won’t be able to afford it if our house doesn’t get what it was valued at last year. Agh it’s such a daunting process I keep thinking are we mad to even try and move now!

My current house was sold with OIEO £340k so I offered £340k - vendor refused saying she wanted more and we ended up settling on £340,500!! She just wanted over that amount even by £1k so we split it

you are not alone. many people in chains are in the same position, and I guess all sellers (inc top of the chain) are going to have to "get real" soon. I should have mentioned that we are chain free, so that probably helped our situation. I know friends in chains are considering renting for the short-term etc, it really depends on your situation. if you need to move, you need to move I guess. i hope they'll be reasonable and you get the house you like. good luck!

@blobby10 wow that’s the sort of deal we’d like 😂

@cupcakesarelife yes exactly it seems to be happening everywhere! Thank you very much. We don’t have to move we actually love our house so much and have had the most amazing decade here. We just have done all the work on it and feel like we’ve outgrown it and want a bigger place now. But taking that leap is terrifying!

We have been advised to put our house at OIEO 600k so I have that figure in my head and would accept 600, anything higher I'd look at as a bonus

Hi @cupcakesarelife - did you get the survey before or after making your offer? I'm reading it as the survey was done which then fed into your offer?

Also, what info did you request from the local council?

Trying to navigate the OIEO also!

I take OIEO as shorthand for “I want to dick you about”

three house we viewed FOUR YEARS ago with OIEO pricing are still for sale 😵‍💫

they all seemed to have unrealistic pricing or are “thinking about” moving

hi @Mover2024 sure, happy to answer. in short, we got the survey after making the first offer... then the survey mentioned a roof problem and got another 20k deducted.

In long form: We made an initial offer about £100k under asking due to the reno costs, local area factors and schools. The main issue was that this house needed a lot of work, more than was shared before the first viewing and the photos made it look like a cosmetic-only job! (we asked a reputable builder to go to the house with us on the second viewing and he gave an estimate and we provided this evidence to the vendor). The builder actually gave £120k+ but we thought 100k was reasonable.

Council wise, I learnt abit more about the soil type the house sat on and any issues with neighbours extensions and possible subsidence risk in the area. They were pretty open, but weren;t able to comment about subsidence risk (we had to wait for the surveyor's report for this) but I think it's freedom of information, so ask away if you have concerns about soil, and they will know if other properties had underpinning. not that underpinned properties are a bad thing at all (to us anyway), but just tells us more about the soil and risk to us long-term. you can also find out about any old extensions to the house the vendor may have forgotten about etc. the council will tell you.

we also checked .gov for flood risk. enter the postcode of the property and read the entire page... don't skim it :)

We also contacted the schools to see if the house was within catchment of good schools and learnt that it doesn't cater to girls much (the area mainly has single sex schools) - there are quite a few boys' schools close to the property which is great for boys/sons, but the girls schools were about 2 miles+ away. Initially the estate agent tried to sell that the property was close to "excellent schools", but they were all actually ofsted "good" rated (fine with us, but obv not excellent) and only really catered to boys. the distance to girls schools would be a problem if we wanted to sell later on or if we have daughters!

Factoring all of this in, and after the surveyor report came back, we negotiated an extra 20k off due to a pretty bad roof. When I say "off", it's not a discount at all, it's just to get the house to modern standards and takes into account the area and local factors too (which I think matter to couple, and families a lot e.g. schools).

The reasons above is highly likely why the vendor never got even a call of interest in the property for 6 months. we were the first to show interest.

the main feedback was from other viewings was that there was too much work to be done. The seller had gone through two agents, the latest one was not very good for us as buyers, and kind of difficult to trust. for example, we asked if the house ever had an extension, and they were adamant it didn't, but the council confirmed it did. just silly things like that. we were close to not making an offer at all, but i really saw a home in this house so we tried (everything!) to get it.

I think the seller got a fair price in the end. i personally don't think it's right to sell a property at a high price if you've done nothing to it for 30 years inc re-wiring. Clearly other buyers felt the same way, and the vendor probably had a reality check about the market by Dec 2023. He is a nice chap and i understand he wanted more most likely (who wouldn't) but that's not life and the current market.

Personally, I wouldn't purchase a house in these times unless it was the right price taking into account all the factors that matter. Life is very expensive at the moment and i have seen friends struggle with their mortgages with high interest rates and i don't want that for my future. but also, maybe we were lucky! but I'm not sure if we are lucky, considering the next challenge will be all the reno work, so fingers crossed that will go well and not spiral out of control in terms of £ 😓

I hope that was helpful.

that sounds amazing! I really hope your next house will be another fantastic home too :)

I tend to ignore it tbh and treat it as asking price. Same with guide prices and OIRO.

We bought our current house for under OIEO price late last year (we already had a buyer for ours and the sellers were desperate for a buyer to keep the dream property they had offered on).

@cupcakesarelife thank you so much, that's super helpful! Will definitely go with a builder and will definitely speak to the local council and look further into school catchments.

This has been very eye opening. Really grateful. Thanks again x

What is this obsession with not offending people. Offer what you can afford, they can accept it or not. If they are "offended" then that's their problem

@Mover2024 best of luck! we only did these extra steps because we knew the house was not worth the asking/guide/OIEO. So, we were committing to "proving" it's true value. Tc

Thank you! @cupcakesarelife - completely understand that and we're the same. Will definitely be taking similar steps to you

@cupcakesarelife just an update. We've booked a viewing now. It's been up since August and reduced twice since then (by £25k overall).

The EA says they were under offer months ago but then the vendor died so it went it to probate and because that takes ages the previous buyer had to pull out as they had a buyer. Apparently there is currently an offer on the table but the buyer is trying to find a buyer for theirs so they are still open to offers.

I don't know whether to believe or not as sometimes I think EA's sugar coat to make it seem better than it is!

I'm in Scotland and it's different here. All sales are "offers over" with the minimum actual amount being the minimum the seller would accept.
Usually the sale will go to a closing date and everyone interested will bid what they are willing to pay.
Seller gets to pick which bid they want. That is then binding.

No gazumping etc.
chains rarely break down here.

All the ways of going about buying and selling have some issues? But I prefer this way.

You literally offer the highest amount you are willing to pay. Then if you get it great and if you don't then you don't best yourself up as you just can't afford it.

that's sad to hear about the vendor. I hope the probate grant won't take long, but this will be off-putting for other buyers. Usually the family want a quick sale because their own costs start adding up, so this may all work for you.

are you in a chain? if not, use this heavily to your advantage.

EAs always sugar coat things and probably lie all the time too. I know I shouldn't say that and generalise but I am still ticked off with the EA we had to deal with for the house we are now purchasing (lied all the time). They work for the vendor. At the viewing, show zero emotion, Just inspect the house properly. Make videos/take photos.

Offer what you think it's work in current market (and what you can afford). Before you're viewing, you could email the council ahead of time, check flooding risk yourself. Stake out the road the property is on ahead of time even.

Re: Apparently there is currently an offer on the table but the buyer is trying to find a buyer for theirs so they are still open to offers.

If you want the house after the viewing, I recommend doing a second viewing to make sure you're happy. I don't think the market is that hot to need to offer after a first viewing but listen to your gut. I think buyers without a chain, cashbuyers and FTBs are a vendor's dream, so use that to your advantage. Who cares about the other offer, you have more to offer if you;re not in a chain. If the vendor/family are very keen to sell they'd choose you over a buyer in a chain because chains can fall through. and they do. often.

Send the offer in polite email.

The very best of luck! I feel so excited for you!

this sounds like how it should be in England!

We offered 5K under the asking price for a house as it needed that much repair work done to it - the vendor refused our offer so we found another house.
It remained on the market for a further three years until he finally sold it for £1 over the asking price!!

He went around town telling people "I'm going to get over my asking price"

Lol. Just not a serious seller, clearly. Glad you found something else. There is always something else eventually! :)

I agree that OIEO is very much dependent on a seller’s expectation, and that can be unrealistic.

Two years ago we viewed a house OIEO £1m. We loved the house but after doing research, thought it was massively overpriced so didn’t even make an offer as knew it would be rejected (would have offered £850k). The agent agreed with me that it’s overpriced but said the seller had been given that valuation during the house boom during the pandemic so won’t consider anything less*. Two years later it’s still on the market with several agents, now at OIEO £1.1m! It was a beautiful house in a nice village, and if he just lowered his expectations, it would have sold a long time ago.

*A couple of weeks later the agent called me trying to pressure me to make an offer, claiming that £1m is a fair price and denying that he admitted otherwise!

@cupcakesarelife very sad! I said as much to the EA. Sorry to hear that. I read an article recently that said grants of probate are taking the longest they have ever taken currently, with some taking up to a year.

We aren't in a huge rush though so would be happy to wait. We are in a chain unfortunately. Our house is going up shortly but we and our EA anticipate it will sell quickly as nearby neighbours have of recent, we just need to price right. We've adjusted our expectations accordingly as the worst thing to do in this market would be to overprice. We will also likely have first time buyers so hopefully that makes everything a bit easier.

Noted about showing zero emotion, I will have to try hard as that's difficult for me! 😅

Will also contact the council this evening, thank you. Have already looked up flood risk and it's "very low risk". Have also looked into schools. All are ofsted "good" with one "outstanding" but maybe a bit far to be in catchment.

Yes, we're going to walk around the area and get a feel for it. Booked another viewing on an adjoining road just for comparison purposes also.

Thank you! Will definitely be keeping you updated!