When it comes to buying a house, there are a lot of different terminologies to get your head around – offers in region of, guide price, offers in excess of…
But what do they all mean and how are they different? This is something we’re going to answer for you, as well as what’s an acceptable offer for ‘offers in region of’ and why ‘offers in excess of’ would be included in the listing price.
Got a question you want to find a quick answer for? Use the menu below:
- What does offers in region of mean?
- Offers in region of – what’s an acceptable offer?
- What does offers in excess of mean?
- Why is offers in excess of included in the listing price?
- Should you offer less than the asking price?
What does offers in region of mean?
Offers in region of, or OIRO, gives the buyer a rough idea of how much the seller would like to achieve for their property. It shows the buyer that the seller is open to some negotiation, as they don’t have a set price they’re asking for.
With offers in region of it can be hard to know where to price your offer, as you may go lower than the price stated, whilst others may go higher, leaving you outbid and unlikely to get the property.
What is the difference between guide price and offers in region of?
Guide price and offers in region of are similar in that it shows the buyer that the seller is open to some negotiation on price. Both of these terms can be used when the seller and estate agent are unable to agree on an exact asking price.
Guide price, however, more states the figure that the owner is hoping to achieve, whereas offers in region of is giving more of a wide band around the price for buyers to submit offers at.
Offers in region of is more commonly used when the house is of a higher value.
Offers in region of – what’s an acceptable offer?
It can be hard to determine what’s an acceptable offer for a house that’s listed as ‘offers in region of’, as there is a wide band around the price that a buyer could offer. What’s deemed an acceptable offer will largely be down to the seller, and you should use the estate agent to help guide you when you’re wanting to put in an offer.
To help give you an idea of what is seen as an acceptable offer, these are the points you should consider before putting an offer forward:
- Whether the property needs work done – If the property you’re wanting to offer on requires work, then you can submit an offer that is around or slightly below the listed price. However, a property needing ‘work’ is relative to each person’s needs, so the seller may feel their property is perfect, so it’s a good idea to speak to the seller about what your needs with the property will be to allow you to reach a fair conclusion
- Similar properties in the area – If there are similar properties in the area for sale, then it makes the property not worth as much, as it’s not ‘one of a kind’. This will allow you to submit a slightly lower offer without it seeming unreasonable
- How long the property has been on the market – The longer a property has been on the market, the more urgently the seller will want to sell it, meaning they will be more open to negotiation on price
- How keen the seller is to move – If the seller is wanting to move fast, they will naturally be more open to negotiation if it means it allows them to sell the property faster. If you ask the seller how quickly they want to move and they answer ‘fast’, then you will be able to submit a lower offer
- How keen the buyer is to buy – If a buyer is really keen to buy a property and the seller is aware of this, they will normally push for a more top end offer, as they feel they have the power and don’t need to be willing to negotiate down on the price
- The market conditions – Depending on if it’s a buyer’s or seller’s market will have an impact on what sort of offer gets accepted. For example, if it’s a seller’s market, buyers will have to put in higher offers as there’s less choice of housing and the seller has the power to push for more
- What you want the property for – If you’re an investor wanting to buy the property to renovate and sell on or to rent out, then you won’t be emotionally invested in the property, making you less inclined to put in a higher offer
- What type of buyer you are – If you’re a cash buyer, you may be able to get away with putting in a lower offer as you have a lot of desirable aspects. For example, you’re a chain-free buyer and you’re able to move quickly, as you don’t require a mortgage to be able to buy the property
What does offers in excess of mean?
Offers in excess of, or OIEO, means that the buyer would like an amount more than what it is listed at on property portals. Generally speaking, it’s very set that the buyer won’t accept any less than the price.
Often, offers in excess of can be used if the estate agent values the property at one price but the seller thinks their property is worth more. There’s pretty much no room in negotiation, as the seller has a set idea of what they’re after.
As a buyer, you will have to at least offer the price the property is listed at to even get the attention of the seller.
Why is offers in excess of included in the listing price?
There are many reasons why a property may be listed as offers in excess of. Firstly a seller may mark their property as offers in excess of to make allowances for the fees which will come off the sold price, as it allows the seller to get their desired price for the property.
Another reason a property may be marked as offers in excess of is that the seller and the estate agent can’t agree on a price, with the agent feeling it’s worth less than what the seller thinks. This means the property is listed as OIEO to get a compromise between both parties.
A property may also be hard to value, meaning the property is listed as offers in excess of. Property is hard to value when there aren’t any comparable houses in the area and/or there have not been any houses sold recently nearby.
Also, if a house hasn’t been sold for 15 to 20 years it’s hard to value, as the market changes a lot over this period and so it can be hard to know where to start in terms of a listing price.
Offers in excess of may also be used to encourage interest from buyers. The property can be listed at a competitive price to make it look like a good deal, but also by stating offers in excess of means that those interested will know they won’t be able to pay this price and will need to offer more.
Another reason a house may be marketed as OIEO is if it’s being marketed by an open house event or auction, as it’s a way of encouraging interest and bids, which could lead to a potential bidding war, which in turn will get the seller a good price for the property.
Should you offer less than the asking price?
Offering less than the asking price can be perfectly fine, depending on a few factors. A cheeky offer will be okay, providing it’s no less than 5-10% of the asking price, or the seller may see the offer as lowball and be offended by the offer, leading them to not want to deal with you anymore.
Of course, if the property is listed with ‘offers in excess of’ it wouldn’t be right to offer below the asking price, as the seller and estate agent are telling you upfront that anything below that price won’t be accepted and there’s no room for negotiations.
If a property has been listed on the market for a while, the seller will likely be more open to taking a lower offer, so it’s worth having a chat with the estate agent to get an idea of how much movement on the price the seller is willing to accept.
If you’re in doubt about anything, not just about making an offer, it’s always a good idea to have a chat with the estate agent, as they’re in direct contact with the seller at all times and so will be able to give you a more accurate idea about what the seller’s expectations are.
Well, that’s everything you need to know about offers in region of, including what’s an acceptable offer, what offers in excess of means and when it’s okay to offer below the asking price.
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Millie is a perfectionist with a passion for property and writing articles. You’ll find her researching the latest housing trends and the newest up and coming areas worth investing in.