As a busy online estate agent, one of the questions we get asked a lot by our customers is: “Should we use a price prefix – a pricing abbreviation – or should we just list a price?”
The most well-known price prefix in general selling is o.n.o. – which means ‘or near offer’ – but in the property market there are lots more to choose from, such as OIRO, OIEO, POA, guide price and sale by tender to name but a few.
But what do all these abbreviations mean? And in what circumstances should you use price prefixes like these to help you achieve your all-important asking price?
Ask the experts
The short answer is that every house sale is different and should be treated as such. Price prefixes are generally used by different people for different reasons.
You have to take into account the size and condition of the property, the buoyancy of the local market, the availability of buyers and, most importantly, the price you want to achieve.
The quickest way to decide if a price prefix would help you is to call Hatched on 0333 999 7699, explain your situation and our experienced property advice team will talk you through your options.
Alternatively, read on and find out what these mysterious abbreviations mean and how they might help – or hinder – your quest to receive the offer you want on your home.
OIRO: Offers in the region of
OIRO is still used fairly frequently and it suggests to the buyer that you would be willing to negotiate the asking price but that you won’t negotiate too much.
However, over the years, many buyers we’ve come across mistake this to mean: “Offer me any old figure and I’ll consider it!”
So it can be a confusing prefix for buyers and it can certainly end up limiting your chances of securing the asking price because you’re essentially telling people to knock you down right from the start.
Our rating: 1/10
OIEO: Offers in excess of
This is sometimes referred to as ‘offers over’. Put simply, OIEO basically means that the owner of the property is looking for more than the listed price.
Back in the late 90s and early noughties this was rarely used, but it’s become extremely common nowadays, partly because of the internet and ultimately the growth of online property portals like Rightmove and Zoopla.
Since the arrival of the internet and predetermined price ranges on property portals, it is vitally important to get the property into the right price range on Rightmove and Zoopla, so this has rightly become a key consideration in pricing.
However, it should be noted that the Advertising Standards Authority (ASA) guidance on using OIEO states that the price listed must be in line with the seller’s “bottom line”.
Agents should not reduce the OIEO below the lowest price the vendor is willing to accept or they may face complaints or even action by the ASA itself.*
There are other drawbacks to OIEO too. By listing a price as OIEO you can create confusion and questions in the buyer’s mind before they’ve even enquired about the property.
The main question is likely to be something like: “How much over the asking price does the owner want to achieve? Is it £1,000 more, £5,000 more or £10,000 more?”
If an inexperienced buyer is looking at the OIEO prefix, this might turn them off and make them think they’ll be wasting their time if they can’t go to a unknown level the owner requires.
Our rating: 3/10
POA: Price on application
Using POA was much more common before the internet came along – it was used to hide the price so that you were ‘forced’ to call the agent to get the price!
This gave the agent a chance to sell the property to you, or cross-sell another property, perhaps. See our recent blog on POA and why we think it’s the most pointless prefix in existence!
Our rating: 0/10
The term ‘guide price’ has started to creep into the industry in recent years and we can see why. When you’re marketing your property, this phrase can leave the price open to interpretation.
‘Guide price’ reminds many people of an auction because that’s where it’s most commonly used. Like an auction, if there is enough interest in the property then it might go above the ‘guide price’, but if there isn’t a lot of interest, then it may go below.
Our rating: 5/10
Similar to ‘offers in excess of’, the term ‘from’ suggests that this is the lowest price. This is more commonly used in relation to new builds or when someone is selling multiple units that vary in price, size or style.
0/10 when selling your own home
Sale by tender
This has been around for a long time and many agents still use this on certain properties. A property that has been put up for ‘sale by tender’ or ‘sale by informal tender’ is one where the agent sets a deadline date for offer(s) to be made.
The agent will typically set a guide price and then host a series of open days with a view to receiving all offers by a certain date and time.
At this point, the agent will open the offers and discuss them with the owner to see which one is best for them. This could simply be based on the highest price, but they will also usually take into consideration the buyer’s position as well.
The agent will then inform the winning bidder and the other bidders will be told the disappointing news.
An informal tender is not legally binding and either party can still back out before exchanging contracts. Similarly, the owner doesn’t have to accept any of the offers submitted if they don’t want to.
Selling by tender is not just a price prefix but an entire marketing strategy which needs to be carefully considered – read our blog article on selling by tender.
Our rating: 8/10 if you are selling an empty house or property that needs work on it
No price prefix
The most common strategy is not to have any price prefix at all. In our opinion this is the safest way to advertise a property. It creates no questions in the buyer’s mind and doesn’t confuse the issue or put off any prospective house hunters.
Using any other price prefix can create confusion and questions in the buyer and that’s the last thing you want before they’ve even visited!
Our rating: 10/10
We feel the best strategy is to have a straightforward asking price and go for that.
Price prefixes do have their place when you sell your house, but it’s important that they’re only used in the right circumstances.
If you’re not sure what to do and you’re looking for guidance on this subject, then get in touch with the Hatched team on 0333 999 7699 and we’ll give you whatever help or advice you need.
Thinking of selling?
If you have a house you’re thinking of selling, then Hatched is here to help. You can organise a free valuation right now or call us on the number above and find out how we can sell your house for less.
*Please see the following example: https://www.asa.org.uk/rulings/express-estate-agency-ltd-a13-226041.html