You will see lots of properties listed as ‘offers in excess of’ in the United Kingdom.
So, what does it mean?
Read this blog to find out.
What does offers in excess of mean?
A number listed as ‘offers in excess of’ means that the homeowner will only accept bids above this price.
In other words, if you make an offer below this number, you’ll be rejected.
It thus acts as a starting point for house negotiations. It’s a bare minimum that the homeowner will consider.
Offer in excess of vs. asking price
The asking price is a precise figure that the homeowner hopes to sell for. It’ll often be aspirational – it’s the number they’d be happy with. Sellers often offer below the asking price.
Meanwhile, an offer in excess of lists the bare minimum the homeowner will even consider. This isn’t an aspirational figure – it’s a baseline. They’ll often ignore offers that are lower.
Offer in excess of vs. best and final offer
Offers in excess of sets a minimum acceptable price for the seller, whereas best and final offers are the highest bids submitted by interested buyers. The latter allows the seller to compare and choose the most favorable offer.
Reasons to ask for Offers in Excess
A homeowner may ask for ‘offers in excess of’ due to advice by their estate agent.
This is done to get the best possible result for the homeowner.
There are a few reasons that experts suggest this approach.
1. To ensure you’re happy with the selling price
When you list a house as ‘offers in excess of’, it states that the number you’ve listed is a minimum price.
You’ll thus turn away buyers who’ll potentially make insultingly low offers.
You will only receive offers above this number. This means that, when the time comes, you’ll be happy with the price.
2. Difficult to pin an accurate valuation
It’s not always easy to settle on a clear valuation for your property.
Perhaps economic conditions are going through a turbulent few months.
Or maybe there’s inconsistent data on selling prices for similar homes in your area.
To avoid pinning you to a specific (and possibly inaccurate) valuation, offers in excess of can be useful.
3. Selling at auction
Selling your house at auction forces you to list a starting price. This will often be referred to as ‘offers in excess of’.
It’s the figure at which bidding will begin. You’ll usually decide on this number in partnership with the auction company.
Can I bid below the ‘offers in excess’ amount?
You could, although it is likely to be declined.
Although, if the property has been on the market for some time, you may have more negotiating power. A buyer could be more receptive in this scenario.
According to some industry experts, 76% of homes end up selling for less than the asking price. If the alternative is not offering at all, then it doesn’t hurt to ask.
If you do decide to offer under the OIEO amount, you should focus on why your bid would be the best option.
Perhaps you’re a chain-free buyer, or maybe you’ll agree to cover the seller’s legal fees.
How much should I offer on an OIEO house?
You should always offer what you believe it to be worth.
All offers must be forwarded to the vendor. This means you have just as much chance as the next person.
Just make sure you do your research and make an offer that’s fair. This makes it less likely that the seller will feel insulted.
Alternatives to Offers in Excess
There are some other terms that you may have seen when searching for a house to buy.
These are not the same as ‘offers in excess of’ – but are often thought of as similar.
Price on application
When a house is considered expensive, it may have the phrase ‘price on application’ attached to it.
It would normally be used for an exclusive property or one that bucks the trend of others in the area. For example, a listed building.
To find the price on these types of property, you should contact the estate agent to register your interest. They will then give you the price.
Offers invited
Offers invited means allowing people to pick a price.
It tends to be when the property is too difficult to value. Interested parties are invited to submit an offer.
If most offers are around the same figure, it gives the estate agent a view of what people may pay. They will then liaise with the seller to take the next steps.
Guide price
This is another phrase you may see when a house valuation is difficult to pin down.
Estate agents and homeowners will use this number to give a guide price – i.e., a guideline on what they’d be willing to consider.
