Aaron Bell
Mary Flory
In Australia, property is traditionally sold by private treaty or by auction. However, some homeowners choose a less common method of selling real estate — expression of interest (EOI).
What does ‘EOI’ stand for?
‘EOI’ stands for ‘expression of interest’. As the name suggests, it’s a way of demonstrating your intention to another party.
An EOI is typically a formal document and has meaning in various contexts. For example, submitting an EOI is a critical first step when applying for skilled visas. EOIs also have a place for those seeking business partnerships, grant funding, employment, and other projects and initiatives.
EOI is also a term you’ll encounter in the homebuying journey associated with a distinct type of property sale.
What does EOI mean in real estate?
In real estate, expression of interest (EOI) is a method where properties are listed with a sell-by date instead of a sale price. In EOI sales, interested buyers submit their best and final offers before the listed deadline. Then, sellers choose the most attractive offer — often avoiding the negotiation process altogether.
» MORE: 12 steps to purchasing property in Australia
How do EOI property sales work?
When you see EOI listed on a property for sale, the seller is essentially asking potential buyers how much they think the property is worth. The seller can then consider all the offers they have received, pick the one they want, or choose not to sell the property at all.
EOI sales place the value in the hands of the buyer rather than the seller. Buyers can submit an offer without knowing what others may be offering, similar to a silent auction.
This method is more common with unique properties that may attract a specific buyer. Properties with special features — such as sports facilities, wine cellars, storage, etc. — may be valued differently by certain people, who may be willing to offer more for them.
However, data from realestate.com.au indicated more sellers opted to put their homes on the market as EOI during the pandemic due to high demand and low supply.
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Considerations for buyers
For buyers, there are a few things to consider when putting in an offer on an EOI property. Firstly, extensive research into the property, location, condition, etc., is extremely important as you do not have a price attached from the onset.
You need to do your due diligence to ensure your offer is fair without overextending on what you can afford or what the property is worth. Should you choose to place an offer, you would do so in writing to the seller or representing agent.
An offer in an EOI sale should also include conditions like the settlement date, financing, building and pest inspections, and any inclusions or exclusions.
» MORE: First-time home buyer tips: 5 mistakes to avoid
Considerations for sellers
For sellers, it’s important to understand you are largely depending on the assessment of strangers. How they value a specific property will largely be influenced by their own financial situation and less by the market.
This is because, with auctions or private treaties, a price tag is attached to the property from the outset, whether it’s an asking price or a reserve. Potential buyers are usually in a competitive environment. However, in an EOI sale, they can bid without the influence of others.
Should you receive more than one offer, you would meet with your agent on the deadline and decide which one to accept — or to not sell at all. For more conventional properties, speak to an expert before listing your property as EOI to ensure it’s the right decision for you.
Are EOI sales a good idea?
EOI sales are unique, so whether or not they’re a good idea for you depends on your individual circumstances. For both buyers and sellers, there are positive and negative aspects to remember.
Pros and cons for buyer
| Pros | Cons |
|---|---|
| A seller may choose not to sell the property at all in the end, potentially wasting your time. | EOI properties may have unique features so they can be difficult to compare with other properties in the same neighbourhood. This may increase the risk of overpaying. |
| There is a deadline so you know if your offer has been accepted or not. | Because you don’t know how many offers or the price of the other offers, you have no idea if you have a chance to secure the property. This might lead to you waiting for an answer, in which time you could lose out on another property. |
| You can include conditions, such as building and pest inspections or subject to finance, which aren’t available at an auction. | A seller may choose not to sell the property at all in the end, potentially wasting your time. |
Pros and cons for seller
| Pros | Cons |
|---|---|
| If you receive multiple offers, you have more choices regarding what to accept. With a private treaty, you may be tempted to take the first offer you receive, while an EOI sale allows you to take the best option. In your situation, you may choose an offer that’s unconditional, with conditions that suit you or the highest bid. | In an auction, buyers are in a highly competitive environment, which can drive up the price. With EOI sales, bidders are not up against each other which may mean less urgency to buy. |
| Once the EOI period ends, you can decline every offer or open one of the offers to negotiation, giving you control of the situation. | Some buyers may avoid EOI properties altogether because they don’t understand the process, don’t have the knowledge or energy to assess properties themselves or for other reasons. If you place your property for EOI sale, you have to accept that some potential buyers may stay away. |
| In theory, because buyers don’t have a price guide to follow, one bidder may overpay to secure the property, meaning you make more than you expected. | In high-demand markets, selling a property with a private treaty may mean getting a deal done faster. If you need to sell your property fast, EOI may take longer or lead to no sale at all. |
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