What Does POA Mean in Property?
Estimated reading time 5 minutes
The property world is rife with acronyms and estate agent jargon that can be confusing. If you’re looking to buy a property you can be left scratching your head at advertisements full of property lingo.
In this blog we are going to highlight what POA means and how it can impact purchasing a home and the entire process.
What does POA mean?
POA is short for Price on Application or Price on Asking. This means interested parties won’t receive the asking price of a property for sale without contacting the estate agent for further information. POA can have advantages and disadvantages.
Why would a seller list a property as POA?
Listings with POA in situ are often on properties which are higher in value, unique, or bespoke. There is usually something about the property which is a little different to the norm.
By not revealing the price, sellers can see how potential buyers react to the property before putting forward an asking price. Will there be many interested parties? Is the property so quirky it may be difficult to sell? Could you pitch a higher asking price because it has something unique to offer? People are naturally interested in the unknown and POA plays into this.
Why would an estate agent suggest POA?
As we have touched on, the use of POA is generally used on property listings when the property is expensive or unique in some aspect. As an agent you may want to draw attention to this property, using POA to add an air of exclusivity. Other reasons an estate agent may suggest POA include:
- Keeping the price private from neighbours
- Sellers who want privacy such as celebrities
- An asking price cannot be settled upon
- Getting serious buyer contact details
Can you estimate a POA value?
Many of us use property portals to find a new house. When an estate agent uploads a property to a portal, even if the advert will list the price as POA, they will be required to enter a property value. Whilst this won’t be shown, it will allow the listing to be shown when the criteria is met.
If you are browsing properties and have used the portal there is a trick. If you were searching for four-bedroom homes over £300,000 but less than £500,000 and a POA home appeared you know it will have a secret asking price between £300,000 and £500,000. This allows you to guestimate the secret asking price behind the POA.
Does POA work?
Just like any strategy in property, POA may work for some but not for others. It’s not too difficult to decipher a POA asking price when using an online portal. However, estate agents can tinker with this secret price so it may be null and void.
Just like when you apply for a new job and no salary is offered, the chances of an individual applying are slim. The same applies to property – POA may put people off as the information they require isn’t provided upfront. Many potential buyers may automatically assume they cannot afford a POA property, or simply may avoid the listing because the lack of transparency in the listing via the agent, even if they love the look of the home. Many agents have discovered that providing as much information to a prospective buyer is far more beneficial that holding anything back, particularly as the property market moves so quickly.
What are the alternatives to a POA listing?
POA may not be the way to draw attention to certain properties and increase the likelihood of a sale. Luckily there are other methods that estate agents use to help the process.
Offers in Excess Of suggests that a seller is open to offers above a clear amount. This is usually accompanied by a clear message that states the seller will not entertain anything lower or enter negotiations unless the price is above the threshold. This is a helpful strategy when there are multiple interested parties as it can encourage multiple offers.
The guide price on a property for sale gives potential buyers an idea of what the buyer is looking for. However, unlike other methods or strategies it is a little more relaxed and there is greater scope for negotiation and multiple offers.
Just like POA when an estate agent and the seller may not be sure on an asking price, offers invited is a similar method. Essentially prospective buyers can view and make realistic offers on the property without having an asking price as a guide. Offers invited is commonly used on houses that are unique or there is nothing on the market to benchmark against.
Sometimes, in contrast, offers are invited when a property has been the market for a while and the seller is keen to get it sold. The seller may invite offers below the price listed to secure a faster sale.
It doesn’t get clearer cut than asking price. Properties listed with an asking price don’t leave much room for negotiation. A seller will have voiced they want to sell their property for a certain amount and they will not accept any less.
With most properties utilising POA upwards of £2 million it is not the majority of buyers and sellers that will have to worry about this. If you want to achieve a guaranteed sale in a timeframe that suits you, opting to sell with a cash house buyer is undoubtedly a solution you should consider.