It’s not unusual for the letters POA to appear instead of the listing price when searching for homes on property portals. The term, which is an abbreviation for Price on Application, exists to conceal the asking price from the general public and can be used for various reasons. So, what exactly is POA, why are some properties marketed in this manner, and, most importantly, does it work?
What does POA stand for? Here is its definition in property:
In real estate jargon, POA stands for Price On Application or Price On Asking, which means the same thing. Marketing a property as POA requires potential buyers to contact the estate agent for more information on the price. While this strategy has proven to be successful in some cases, it has also become problematic among buyers and agents.
A POA is applied when a property is unique, custom, or bespoke. What’s the reason? It allows the seller to keep the price ‘under wraps’ and gauge how buyers will react before setting an asking price. Will buyers fight over its uniqueness, or will it be a major turnoff? If you market a house as a POA property, you have a good chance of finding out without over or underestimating the value.
Please bear in mind that the definition of POA in real estate is not the same as the definition in business: Power of Attorney. If you’re selling a house while your partner is sectioned, this type of POA may arise; however, in most cases, POA in property will be related to your asking price.
Why do estate agents use POA on some properties?
There are various reasons why an estate agent will use POA. As you can only find out the price by asking, using POA almost gives the property a bit of exclusivity. It is also possible that the seller has requested to use a POA to keep the price private from neighbours or family, or the seller could be a celebrity who values privacy.
POA can also be used if an estate agent cannot agree on a price with the seller, allowing the property to be marketed without any price commitment. This strategy may also help the estate agent get a better idea of the market price. Another advantage of POA is that since interested parties must contact the estate agent to find out the price, the agent will have their contact information and will be able to keep in touch with them.
Does using POA work?
Generally, the POA strategy does not work, but that does not mean it won’t work for everyone. Savvy online buyers can easily estimate the cost of a house as property portals require a price to be selected even if it is displayed as a POA. Estate agents will sometimes enter a secret price as lower than the actual price. If someone filters the properties by the lowest price first, the property will appear nearer the top, hoping that more people will see it.
Some people are put off by POA because they believe that if they have to ask for the price, they can’t afford it, especially since most POA listings are worth more than £2.5 million.
Some will also see the price on the application and can’t be bothered to ask, especially if they’re in a hurry to find a house – the more easily accessible the information, the better. Also, the method is quite old fashioned, and POA is rarely used nowadays. But, if your property is listed POA, it can cause a bit of intrigue, and it may stand out – but for the wrong or right reasons?
POA listings create unnecessary work for the agent:
The majority of agents are opposed to POA listings for a reason, and it isn’t just that it is a risky tactic. To an agent, time is money. As you might expect, no agent wants to have the same rehashed conversation with multiple buyers, only to discover that the price turns 99 per cent of them off. Something that marketing a property with the listed price would avoid, which means that any buyers who reach out are likely to be a tad more motivated – therefore, a lead is worth their effort and time.
What are the alternatives to POA listing?
It would be foolish to tell you that POA isn’t the best way to sell your home without suggesting any viable alternatives. Given that POA isn’t necessarily the quickest way to sell a house, here are some other choices for you to consider:
Traditional sale with an agent:
Though we don’t recommend it, you could keep your property on the market with an agent and sell it using the approach of sitting on an asking price and crossing your fingers. You’ll face a lot of competition because this is the most popular route. Your selling would most likely be sluggish as well since you’re reliant on open market demand, which, let’s face it, is never consistent. Furthermore, they will focus more on you (viewings/negotiations, etc.) and, if you do receive a bid, it will most likely be a reduction in your asking price. Yes, if you’ve sold before, then the procedure is familiar to you, but we can’t think of many other advantages apart from that.
Another option for a POA property sale would be to sell it at a local auction. Although this usually is faster than the open market, the marketing process will still be very lengthy – as long as a couple of months if you’re lucky. When you go to an auction, you’ll be charged various fees, including advertisement fees, registration fees, and sales fees. Not quite the most cost-effective method of selling a home. However, just like selling through an agent, there’s no guarantee that you’ll sell at auction.
Reach out to a Cash Buying Company:
If neither of the options above piques your interest, selling your home directly to a cash buying company (such as us) may be worth considering. You will avoid the lengthy wait times associated with selling on the open market if you do this. At the same time, you avoid all of the fees that come with auctions. In fact, we take pride in charging no fees and guiding you through to completion in as little as seven days – no POA required!