Why OIEO is Used in Property Prices
There are a few reasons why offers in excess of may be used when selling a property:
OIEO may be used when a property is hard to value. The seller and their agent hope that by stating an OIEO price it will attract many offers and so establish the property’s true market value.
OIEO is often used to attract attention when a property goes on the market.
With an OIEO price, the seller or their agent is usually hoping that it will attract numerous offers and create competition amongst buyers. They hope this competition will drive up the price of the property and achieve the highest possible price.
In some ways, an OIEO price is much like an auction in that it aims to establish the highest possible selling price for a property at the time.
It might be that the seller or their agent hopes that by stating an OIEO price they will sell the property for more than it is worth. OIEO can mean ‘buyer beware’.
OIEO prices can sometimes be a compromise between what an estate agent suggests a property should be marketed at and what a vendor wants to market a property at.
Offers in excess of can also be a way of manipulating the property portals like Rightmove, Zoopla and on the Market. It can be the case that pricing OIEO with a lower price than a seller is willing to accept will mean the house appears in more searches and so gets more interest.
OIEO prices can be used in both hot and cold property markets. In a cold property market, they can help attract attention and generate buyer interest. In a hot property market, they can help find the highest possible selling price for a property.