Expression of interest
(Abbreviation: EOI) is an offer to purchase or lease a parcel of real estate which may include any buildings, sheds, fencing and other fixed infrastructure on the property. The EOI sets out the details, terms and conditions of the offer and is presented to the vendor for consideration.
Expressions of interest, or EOI, in real estate are used to gather offers for properties without disclosing the price for which the vendor is prepared to sell. Therefore, protecting the vendor from exposing to the public their exact position.
This is a very different type of sale where at an auction you can see everyone bidding or private treaty when there is generally a price or price indication.
They are used by agents so they don’t scare off potential buyers for a property by quoting a specific price.
EOI’s are mostly used for properties that both the agent and vendor are genuinely not sure what the property may be worth due to its uniqueness or lack of comparable sales.
Large farms, blocks of units, commercial property or parcels of land that have multiple uses such as development sites tend to be the properties most likely to be sold by an EOI.
Positives of selling through expressions of interest
- As the seller you are not disclosing to the market any form of price or motivation
- The buyers can sometimes want the property so much due to it being so unique that they may pay a premium price over your desired expectations
- You have a set date for the EOI’s to be lodged and you then have the liberty of time to go over each of your EOI’s
- There is no pressure for you to accept any of the EOI’s and you can chose not to sell or to negotiate with any of interested parties
Negatives of selling through expressions of interest
- There can be a sense to the buyers that you are only ‘testing the market’ which can lead to very low or at times no EOI’s
- There is absolutely no indication of price which can have buyers wanting to deal with priced properties
- There is no transparency to the process putting purchasers off