When looking to buy a property you may encounter a lot of jargon. One of these is the acronym, POA.
Standing for ‘Price on Application’, or ‘Price on Asking’, you will find POA on some property listings in place of the properties guide price.
The POA acronym is used when a seller wants to keep their property’s price a secret and require buyers to approach their estate agent to receive further details on price.
Why would a property be advertised ‘Price on Application’?
There are a bunch of key reasons why a property would be listed without a price tag.
These include but are not limited to marketing benefits, protecting the seller’s privacy, and to establish the right price for a property.
We will discuss these reasons in more detail below.
To create a sense of mystique
Firstly, you can attempt to use a price on application tag to build a sense of mystique about a property. By refusing to give the price to just anyone, you can try to build up a sense of exclusivity and convince potential buyers to get in touch. This could also lead to less or no arguments over price for fear of the buyer losing their opportunity to buy.
While for most buyers, these psychological tricks do not do anything, there are some that will fall hook line and sinker for them.
As the big ego buyers who prioritise this kind of exclusivity tend to fall more into the upper end of the market, POA tends to be used for more expensive or unique properties. When considering properties worth £1million+ the price is often not listed. Often the thought is anyone who would have to ask is probably unable to afford it.
To secure potential buyers contact details
Secondly and relatedly, POA is used so that any buyer that gets in touch with your estate agent to find out the price, can be held on file their details and contacted in future.
This can be very beneficial. While perhaps the buyer is not interested in your property at your initial price, they might be after a price reduction. Or perhaps your agents personal touch convinces them.
To protect the seller’s privacy
Thirdly, you might be listing your property as price on asking in order to protect your privacy. Whether you are a celebrity trying to avoid the prying eyes of the press, or you are simply keeping your property price private from nosey neighbours and family, listing your home as POA can keep the general public from finding out how much your home is worth.
Because the seller is still unsure how much the property is worth
Fourth, and arguably most importantly, sometimes, when a property is marked as POA it means the seller has yet to establish a selling price. Instead, the seller gauging the market. The seller might be unsure how much they can get for a property or could disagree with their agent.
When this is the case, sellers often tell their agents to inform buyers they are open to offers and use these to estimate what they should be asking for their property. If a property is fairly unique or quirky, accurate price estimates can be difficult to come by.
While it could be unappealing to most of the market, it could suit a small, willing to pay, section very well. Often property like this is listed as POA in order to get honest offers which can be used to calibrate a guide price.
In order to hide a downward trend in price
Beyond the already discussed marketing advantages, putting a property on the market as POA also means buyers cannot spot a downward trend in price.
This is especially important in areas which have, on average, climbing house prices, but a particular property has lost value.
This is normally because of local trends, including the varying popularity of large vs small houses in your local market.
Marking a property as POA also means you can hide when you reduce your property’s asking price. If a buyer is aware that you have recently reduced the price on your property, they will be able to tell you are very motivated to sell. This could put them in a stronger negotiating position. When a property is marked as POA people will only find out the price when they enquire, so the vast majority will not know about any price reductions.
What are the disadvantages of POA?
While marking a property as POA offers some significant advantages, it also has several downsides.
It is not entirely normal to mark a property as POA. It can cause buyers’ eyebrows to rise, immediately generating the question of why the price is not available.
Some buyers do not know the meaning of the acronym, and think it means that the price is yet to be announced. As they believe an announcement is forthcoming, they are unlikely to enquire about buying the property.
Marking a property as POA also creates something of an additional barrier between the seller and potential buyers, which many buyers simply will not bother to overcome.
It can make buyers much more cautious, and potentially lead to a breakdown of trust between the seller and the buyer. This could make a house sale much more likely to fall through.
On top of this, budget conscious buyers are likely to be put off by the missing price tag, even if the house looks like it should be in their price range.
Finally, listing your property as POA creates substantial additional work for your estate agent. Not only does it involve having the same conversation about price with multiple potential buyers, but there is also limited screening of these buyers. And so a substantial amount of them may be unwilling to pay anywhere close to your asking price.
Some commentators believe that listing a property with a price on application tag contravenes consumer proctection legislation.
Does Price on Application Work?
For some properties POA works well.
If you need your finances to be kept private, for example, due to celebrity status or family issues, advertising your property as POA can stop the general public finding out the details of your homes price.
Similarly, for more exclusive properties, worth seven figures or more, POA can weed out price conscious buyers before they even view the property.
However, when selling a conventional family home, say a three-bed semi set anywhere outside of London’s most desirable areas, POA generally falls apart.
Most normal house buyers are going to be budget conscious, considering the advertised price as important as the house itself.
Offering the property’s price on application, rather than just providing it in the advert, is going to put the vast majority of this type of buyer off. House buyers normally have a strict limit over how much they are willing to pay for a property and will avoid any that could potentially break that budget in order to avoid having their heart broken.
On top of this, savvy buyers can often work out the price of a POA property through looking at current and historic online listings.
How to calculate the value of a ‘price on application’ house
You can begin to work out a property’s value by looking at where it sits on online listing sites like Rightmove and Zoopla. The way these websites work is that an estate agent enters a secret price when listing the property. This secret price indicates which properties it will be advertised alongside, so it can be displayed to the right kind of buyer.
Property is listed with a POA tag in order to keep the amount the seller is prepared to accept a secret.
This could be because they want to keep their finances secret, hide a reduction in property value, or to build marketing mystique around their home.
Listing a property as POA can be very useful for more unique or expensive properties as it can get buyers to make honest offers around what they think it is worth.
However, for cheaper, more conventional property listings having the price only available on application tends to put buyers off.
This is because most buyers for this type of property tend to be very budget conscious, and will not normally be interested in a house they do not know if they can afford.
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