Why EOI?

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By Dwain Duxson

Why EOI? -- These days, you see a lot of Rural properties advertised as EOI (expression of interest). Danny Thomas, director at LAWD and who spoke at our Business of Farming event, said the EOI system works super well for the seller. But, he said, the buyers hate it. 

As he outlined, they (the agents) are employed by the seller to get the best result possible.

He said, "we do them because invariably there is always someone that is prepared to pay 20 to 30 percent above everyone, a neighbour or an anxious buyer, for example. When you do an Auction, the highest bidder only has to be a dollar above everyone else".

There are also 2 types of EOI, a single-stage EOI, which is just like a tender. Or a two-stage EOI, which is executed when 2 or more parties are around the same price. They either run another EOI or do a boardroom auction with the selected parties. Danny had a recent example. "We had 3 parties at $6000/acre, $1000 above the reserve, so we asked them whether they wanted to do another EOI or a boardroom auction. They chose the Auction, and the winning bid got to $7400, which was nearly 50 percent above what the seller wanted". That's why they use EOIs, I guess....

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