I have had a lot of people asking this question recently, so here is a bit of an email that I just sent to a property buyer to try and explain what it means.
‘Offers in the Region of’ and ‘Offers Around’ is a bit of a moveable feast depending on the prevailing property market conditions. The last 12 months saw relentless downward pressure on property prices. ‘Offers Around’ therefore usually translated as ‘Offers Slight Below’ the asking price.
However, in the last couple of months we’ve seen property prices rising again. Less properties are on the market than is normally the case and, although buyer numbers probably haven’t gone up across the market, there is therefore more competition for those properties that are currently going on the market. This has resulted in more Closing Dates being set and more ‘blind bidding’.
As a result, Offers Around/In the Region of has translated for the last couple of months as ‘Offers Slightly Over’ the asking price. In some cases, particularly in the sought-after family homes sector, this has translated into ‘Offers Quite a Bit Over’ the asking price.
So what is ‘Offers Around’ or ‘Offers in the Region of’ going to mean in the foreseeable future?
Well, if supply levels rise a bit, or if buyer confidence dips a bit, then I’d expect to see less competition for the properties that are on the market/have just come to the market and therefore I’d expect to see prices starting to fall back a bit and for the ‘premium’ paid over the ‘Offers Around’ price to drop back.
However, if supply continues to be low (and we are seeing no signs of floods of properties coming to the market) then we might continue to see ‘Offers Around’ translating into ‘Offers Slightly Over’ until such times as those prevailing market conditions change.
The good news for property buyers is that we have certainly not seen a return to the days where ‘Offers Over’ (the mots du jour not so long ago) translated into a premium of around 15 to 25% over the ‘Offers Over’ asking price. And we are unlikely to. Why?
Whereas ‘Offers Around/Offers in the Region of’ prices are usually set by reference to the Home Report value and therefore are quite close to the notional value of the property (according to a surveyor), ‘Offers Over’ prices were set quite a bit below the price that the seller/agent actually expected to achieve. Therefore the ‘premium’ over the ‘Offers Over’ price was naturally higher than the premium currently being achieved over the ‘Offers Around/Offers in the Region of’ price.
I hope that this is of some help to any of you who have been asking yourselves this question!