What is expression of interest in real estate

In Australia, most properties are sold either through private treaty or auction. However, a less conventional approach, known as an expression of interest (EOI), is sometimes preferred by homeowners.

Compare home loans

An expression of interest in real estate can be thought of like a silent auction, where buyers are invited to submit their best offer by a set deadline.

The seller sets a timeframe and advertises the property, inviting interested parties to submit their offers before the deadline. Once the offers are in, the seller may choose to accept one, negotiate further, or decide not to sell at all.

Property sales through an expression of interest are not very common and are generally used for premium properties or those with unique features that may be valuable to some buyers.

If you're planning to purchase a property through an EOI, remember to do your due diligence to make an informed offer. Don’t rely on guesswork, as you may end up paying too much for the property or underbid, potentially losing out on it.

Expression of interest, private treaty, and auction are different methods of selling property, and the seller may choose any of these options based on their needs and preferences.

In an EOI sale, the seller typically does not disclose a fixed or reserve price. Buyers submit private offers based on their perception of the property’s value. The seller reviews all offers after a set deadline and may choose to negotiate further or decide not to sell.

In contrast, a private treaty sale usually involves the seller listing the property with a clear asking price, providing buyers with a clear indication of their expectations. Negotiations occur openly between the buyer and seller (or their agents) until an agreement is reached. Additionally, there is no fixed timeline for submitting offers in a private treaty sale.

An auction, like a private treaty sale, may involve a minimum or reserve price. However, in this case, the bidding process is open, and buyers compete in real time. Unlike an EOI or private treaty sale, auctions typically leave no room for negotiation once the final bid is made.

Purchasing a property through expression of interest may give buyers a considerable amount of time to evaluate the property and make an offer. Since the offer must be made by a specific deadline, there’s no pressure to place an immediate bid or the stress of competing with other buyers in real time. The confidentiality of offers and buyer details may also appeal to those who prefer privacy.

However, the absence of a reserve price can leave some buyers unsure about how much to offer, leading to potential uncertainty. Additionally, the seller is not obligated to accept any offer and may even choose not to sell, which could be frustrating for buyers particularly keen on the property.

If you're interested in a property being sold through expression of interest, take the time to carefully review your offer. The lack of price transparency and confidentiality of the process can be frustrating, but it’s essential to conduct thorough research into the property market rather than relying solely on the perceived value of the property. Securing a pre-approval from your lender before submitting an offer may be a good idea to ensure you can confidently afford the property if your offer is accepted.