If you are thinking about buying a property, you may be wondering about “offers over meaning”. Estate agents also use the phrase ‘offers in excess of’ or OIEO.
We take a look at the tactics involved in asking for offers over a certain price and how to make an offer that stands the best chance of being accepted.
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When a property is marketed with the phrase ‘Offers over’ or ‘Offers in excess of’, it means that the seller is unlikely to consider a sum below the price mentioned. They may consider an offer around the price stated if there is little or no other interest in the property, but usually they will be hoping that buyers will make a higher offer.
If a property is marketed on the basis of offers over, it can be an indication that the seller feels that their property will be popular. By asking for offers over or offers in excess of a set figure, they are inviting competition. There could be a flurry of interest and the seller will hope that buyers will bid against each other to secure the property. By requesting offers over, it gives potential purchasers a starting point.
Alternatively, it may be that the property is hard to value accurately. For example, if it is an unusual property or a probate property in need of renovation, the seller’s estate agent might feel that by opening the sale up to offers, a strong price may be achieved.
Similarly, a property that has been renovated may also be offered on the basis of offers over, to try and secure the best price. This could be more than neighbouring properties if it has had substantial work carried out. It gives the buyer the opportunity to consider how much the property is really worth to them and can reduce the incidence of low offers.
If a seller asks for offers over a set price, they are usually hoping to receive multiple offers on a house. This will give them the opportunity to weigh up who they believe will be the best buyer. This is not necessarily the buyer offering the highest asking price. If they are hoping for a quick sale, they are likely to take other factors into account, such as whether you have a buyer lined up for your property if you need to sell, whether you have a mortgage offer and solicitor in place ready to go and how long any chain is.
You will need to consider both how much you are prepared to offer for the property and how much you believe it is worth. This might not necessarily be the same. For example, if you are particularly keen to buy because the property is in just the right street or has a garden that you have fallen in love with, you might be prepared to offer a little more than the market value because you feel it is worth it.
When the property is valued by your mortgage lender, they might arrive at a lower figure. Depending on what percentage you wish to borrow, they may well still be prepared to lend you how much you need. You should remember that if you do pay more than the property is worth, there is no guarantee you will be able to recoup this in time when you sell.
If the property has been on the market for some time without selling, it could be worth trying an offer around the price stated. The seller may have been hoping for a bigger offer but if this has not materialised then they might be happy to go ahead with their minimum price.
If the market is competitive, it can be helpful to prepare to put yourself in the best light. Make sure that you have been approved in principle for a mortgage, if you need one. Instruct a solicitor in advance and let the estate agent know that you have both of these in place.
Being in a short chain and having a buyer in place if you are tying in a sale can be helpful. If you do not need to sell, you will be in a particularly strong position. Even if the seller does not have lots of potential buyers, making sure you are organised and can offer a fast transaction might persuade them to accept your offer, even if they have another one for a slightly higher price.
Once your offer has been accepted, you will need to give your estate agent your solicitor’s details. If you would like us to represent you, you can pass on our name and address to them. They will then be able to let us have the memorandum of sale. This is a note of the agreed price you will be paying together with the details of the seller’s solicitor. The agreed price is not legally binding at this stage.
If the property has been marketed at offers over and competition has been fierce, you are likely to want to proceed quickly to reduce the risk of being gazumped. We are used to moving fast and we will do all we can to make sure delays are avoided and that we are in a position to exchange contracts as soon as possible.
If you thinking of buying or selling a property, we will be happy to represent you. Our experienced conveyancing solicitors offer an exceptional level of client care and a fast and efficient service.
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