'OIEO' - Ignore? Is it a sign a seller believes their house to be worth more than it truly is?

eddddy

danieljm said:

With the likes of aforementioned in mind, am I being unreasonable to go and tell them 180k-ish on such a property, pointing out exactly why?

Having just re-read your post - I would be very cautious about doing the above.

Essentially, it sounds like you're trying to tell the estate agent that they don't understand their local market, or how to value properties - and you know better than they do.

That's likely to annoy them - and might make them keener to prove you wrong.



It might be better to simply say something like "that's all you're prepared to pay" and/or "if your offer isn't accepted you'll look at other similar properties with lower asking prices" etc.


In simple terms, the estate agent wants somebody to buy the property (so they get commission), and you want to buy the property - so maybe you should work together with the estate agent on that, and not regard them as an enemy.

 

Exodi

eddddy said:

In my experience, it's often just a tactic that estate agents use to 'hoodwink' sellers.

For example....

• The seller says "I want an asking price of £270k"

• So the estate agent says "OK - well let's say OIEO £250k to generate lots of interest. Then people will probably bid against each other up to around £270k"

• But in reality, buyers see OIEO £250k - and so offer between £240k and £245k

An estate agent recently confirmed to me that, on his patch, almost nobody offered above an "offers over" price.

But I guess it varies based on local market conditions, levels of demand, number of competing buyers, mindset of the seller, etc

For sure it's a tactic by estate agents.

Using your example, I believe listing a property for OIEO £250k would show it on Rightmove searches for £250k houses, bringing in a bigger audience. The agents logic being more potential buyers, more chance of a higher offer (not that I agree with this).

As you say though, most buyers see 'OIEO £250k', their mind just sees the number '£250k' and then offers slightly lower (as everyone loves a discount).

I can provide a good anecdote on this actually, the house I own now was listed OIEO of £325,000. I bid £280k, the buyer reluctantly refused, so I counter-offered £290k and we did the deal. There was some other factors (long story short the seller had never lived in the house so was unsure of the state of the electrics/heating/etc, they were aware I made my offer considerate of the fact that some work may need to be done, though luckily this was over-hyped and it actually needed very little (a few hundred £)).

In this example, you can see that 'OIEO' may actually have proved counterproductive. For all we know, a buyer with £320k may have looked at this house and said "oh, they wouldn't even entertain my offer then".

GoogleMeNow

eddddy said:

In my experience, it's often just a tactic that estate agents use to 'hoodwink' sellers.

For example....

• The seller says "I want an asking price of £270k"

• So the estate agent says "OK - well let's say OIEO £250k to generate lots of interest. Then people will probably bid against each other up to around £270k"

• But in reality, buyers see OIEO £250k - and so offer between £240k and £245k

An estate agent recently confirmed to me that, on his patch, almost nobody offered above an "offers over" price.

But I guess it varies based on local market conditions, levels of demand, number of competing buyers, mindset of the seller, etc

This ^

Exactly how it happened to us.  We were, however, lucky that we had a lot of offers and in fact did achieve a higher price than the OIEO £250k that it was advertised for and the EA was correct that there were more people through the door and more bids against each other which raised the price considerably.  I was worried initially when low-ball offers came through though!!

theartfullodger

Years ago I offered more than 20% lower than the oieo price.  (?28% off ?) Got rudest bluntest ever refusal from vendors by estate agent.  Thanked them calmly & politely.

Made exact same offer a week later. (quick cash purchase..)

Accepted.  

A good investment.

Properties are worth ONLY what two people agree the price of, seller and buyer.  

Mgman1965

I have found OIEO is what is put after a property has been on the market a while and been reduced at least once.

Comes on market 250k

No interest, so reduced to 245k

Still no interest, so put to OIEO 240K / 245k

House near me been on the market for "guide price" 850k for nearly 6 months not sold or been reduced. 

Herzlos

It makes more distinction in a competitive market; we went £16K over the 'offers over' (Scotland) price, and only won it by about £1k (I think there were 4 bids at closing).  If there's no competition amongst buyers then it doesn't really help.

Of course, there's nothing stopping you offering less; they can only either reject it, accept it or make a counter offer.

RHemmings

Mgman1965 said:

I have found OIEO is what is put after a property has been on the market a while and been reduced at least once.

Comes on market 250k

No interest, so reduced to 245k

Still no interest, so put to OIEO 240K / 245k

House near me been on the market for "guide price" 850k for nearly 6 months not sold or been reduced. 

That's something that I've observed too. Price drop combined with OIEO. To me it makes me think that the seller is having difficulty realising that their house is not worth the previous asking price. 

Grumpy_chap

danieljm said:

I hate these OIEO listings. We've been looking at houses recently. We have a viewing coming up on Tuesday on one place which really fits out expectations.

My only reservation is that they have it listed for 'OIEO 190k. From researching similar properties, a larger one on the same street sold at 180k in April gone, and another - an identical plot in tidy condition - sold for 180k in Apr 22, when the market was less stagnant and before interest rates climbed sharply.

They seem to be selling it on the fact that it has been renovated over time since 2015, had electric works and that it has 'new' windows and doors (it doesn't) when it reality they've really been in place since 2020 or before as per street view so what other truths are they bending?

With the likes of aforementioned in mind, am I being unreasonable to go and tell them 180k-ish on such a property, pointing out exactly why?

Any advice for OIEO?

I would ignore the labelling of the asking price.
Also ignore the labelling of the windows as "new" and entering into discussions as to whether they really are new (or not).  It's all just noise.

You say the property seems to fit your needs, so do the viewing and hopefully you will still like it. 
At that point, assess what the property is worth to you and then make that offer. 
Just make the offer politely and firmly, but without going into "pointing out exactly why" as that could come across otherwise than you intend.

The Vendor may reject your offer outright, in which case you move along, or may negotiate to try to reach an amicably acceptable conclusion.  It really all depends on why the OIEO has been used as the descriptor and there is no point trying to second-guess that.

lookstraightahead

Total sales patter. I'm not even sure vendors understand how irritated potential purchasers get when they see this. I either ignore it completely, it ignore the house completely.

Just offer what you want to offer. If they refuse, be prepared to walk away.

It's to try to encourage a bidding war, which tbh ain't happening in the current climate. 

Vannaa

Mgman1965 said:

I have found OIEO is what is put after a property has been on the market a while and been reduced at least once.

I offered 5% under OIEO for a property that had been on the market for 5 months and had had two price reductions. Offer was accepted immediately.