Can OIRO Get Me A Bargain On My Home?

Sellers usually try a range of tactics to get the highest possible price from buyers, and this includes putting an OIRO tag on a home.

If the market is competitive (and in the UK it usually is) then don’t be surprised if sellers want to hold out for the best price. When this happens – the estate agent may become picky with offers they will accept (sometimes called OIEO).

For other times the estate agent will put an OIRO tag on the property price. This can tell you a lot about the seller’s situation, what they are prepared to accept and how quickly they might move.

What does OIRO mean?

OIRO stands for “Offers In The Region Of”.

It’s a way for the estate agent to communicate that the price tag is up for negotiation.
Agents will typically have to find a happy medium between what a seller thinks their property is worth vs what price houses are currently selling today.

If a seller doesn’t want to budge on the asking price, the agent may suggest keeping the price as it is but putting an OIRO tag on the advert. Although a seller might say ‘no’ to reducing the asking price by 10%, they might feel very different later on if a genuine offer comes forward from a buyer offering this amount.

Should I Be Concerned With OIRO?

Yes and no.

It all comes down to what the main reason is for the seller putting an OIRO tag on.

The Seller Needs To Sell

This is the perfect situation for you as a buyer. There is nothing wrong with the property and the seller is keen to make some kind of compromise on the house price. We call these types motivated sellers and you should be investigating whether they come under this title.

Some examples of why a seller might need to sell quickly:

They have expenses that need to be met

Selling the property is their only way of generating these funds.

They have lost their job or main source of income.

This means they can no longer afford to keep the property.

They are separating from a partner

It is no longer affordable for them to keep the property themselves.

The owner of the property has died

The people inheriting the property (usually related family) needing to sell the property to pay the inheritance tax.

Problems with the property

If the seller is not selling for one of the above reasons – you should be suspicious. There could be another issue with the property that is convincing the owner to accept “offers in the region of”.

This is where it can become difficult. As a first time buyer you are not a surveyor. There’s a reason why surveyors are paid a handsome sum of money to comment on the value of a property – they go through years of training and have a lot of experience doing so.

Some examples of problems can be:

Cladding issues

If the owner cannot get the correct certificate for the cladding, this will be highlighted on a surveyor’s report. Lenders have become much more nervous over cladding safety after the Grenfell disaster – although the guidance for surveyors is becoming clearer.

Health and Safety Requirements

In some properties the cost of replacing key elements like lighting and gas can mean owners are not prepared to pay for upgrades and want a new buyer to take on this work.

This is becoming more common for buy to let landlords who can no longer let to tenants due to health and safety issues. Many do not want to pay for the repairs and prefer to sell up.

Building Structure

Occasionally there can be issues with the building structure of a house. This tends to be more of a problem with non-standard builds. Homes built with bricks tend to have fewer structural issues.

Check for cracks in the walls during a viewing. Also have a look at the exterior of the building. Cracks on internal plaster walls are one thing – but cracks on the outside brickwork can point to more of a concern.

External Issues

Sometimes the hidden problem is not the property itself but actually the issues in other buildings that are around it.

For flats that are above commercial units – a new type of business moving in can cause value to drop (think restaurants that have to vent kitchen smells/ noise from bars etc).

Planning may have been granted for a large development next door that may take many years to finish (noise pollution to the property in question).

Can I Offer Below The Asking Price with OIRO?

By law the estate agent must pass on all offers to the seller. This means that even if your offer is much lower than the OIRO price – it still has to be passed onto the seller.

With an OIRO property there is a clue that the seller will accept a lower price – so it is worth chancing your luck!

Remember- there is no limit on how many offers you make for a property. Some people try a low offer and if it gets rejected they meet closer to the original price.

Just bear in mind that if you make more than 3 offers you will start to annoy the other people in the process, and they will start to take you less seriously.

Watch Out for Agent Tactics

There are estate agents who provide their clients with frank feedback on what price a particular property will sell for. Unfortunately though there are also some estate agents who try to work on the basis of getting potential buyers interest first at a lower price point, and worry about being honest with them at a later point.

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For Example:

A seller informs the estate agent they want their property sold for £350,000. The agent is aware that homes of the same type are selling below this level at £330,000. The agent could be honest with the client about the state of the market, but this particular agent is very keen to keep the clients business and does not want to risk losing the sale.

As a result of situation described above, the agent recommends setting the property at a lower price of £320,000 (below the market rate) with an OIRO tag.

Although this low price will attract many buyers to the property, the sad reality is that the buyer has no interest in selling at this price and will reject offers that are close to the asking price of £320k. Instead of showing buyers that a seller is motivated to sell (which is what an OIRO tag usually implies) the process is being used to mislead potential buyers and waste everyone’s time.
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Our View

Finding a property with an OIRO tag can potentially be a lucrative way to bag yourself a bargain. It’s an unfortunate fact that people do face surprising events that mean they need to sell their home for less than they would like to.

But be on the look out for any warning signs to a property’s condition. It is always best to get a survey done on a property before fully committing to purchasing it.

If you notice any particular estate agents where you have made offers near the OIRO price and have been consistently rejected – this may be a clue. It’s important to view a wide range of properties from a wide range of estate agents to maximise your chances.