When checking for property listings, you may have noticed that sometimes the desired price is listed whilst some others will state “Offers in excess of”. You may also, on occasion, stumble across a property listed as “POA”. Read on to learn more about what this listing type is, and why some sellers and agents choose to use it.
In property listings, POA means ‘Price On Application’ or less commonly as ‘Price On Asking’. You won’t see a guide price anywhere on such a listing, as the agent is asking you to approach them to discuss the property and its price. This sort of strategy has its place in certain niche situations, which we will discuss below, although it is not always welcome.
‘Offers in excess of’ listings, makes sense to use when buying demand is outstripping available property availability, such as in the current UK property market now that the initial waves of Covid-19 have come under some measure of control. POA functions differently, acting as a method to put a listing online or in an Estate Agent window without putting a firm price. This is not because a seller is trying to maximise potential income, but because for some reason they either wish to keep the expected price under wraps, or the agent and seller are unsure of the properties true value.
Commonly POA is used for a property that is in some way individual in a manner that prevents agents from figuring out an accurate value. Think undeveloped land with or without planning permission, billionaire mansions or derelict properties in affluent areas that might significantly improve with redevelopment but are currently unliveable.
Much like with luxury cars and yachts, listing as POA gives a seller the chance of establishing what the market is willing to bear in terms of price, without publicly giving a price that deters interest due to being overpriced, or proved to be a significant undervaluation.
Estate Agents work for a commission and will usually only get paid when a property sells. They know that people generally like to know a ballpark price before enquiring. Therefore, using POA as a listing method, which will deter many potential buyers, is a method that is only going to be used in special circumstances. You won’t see it cropping up on regular house listings often.
Estate agents use POA only sparingly. If an estate agent suggests to you that you list your property as POA, make sure they explain the reasons why. Do they simply not know what the value might be? If that is the case, try and ascertain why this is. Land sales are more commonly sold as POA as the land might have, or be able to obtain, planning permission on it that will suit a developer. Incredibly individual high-end properties are also more typically sold as POA, either due to their individuality making it impossible to set a guide price, or because the seller does not want a publicly disclosed sale price.
For the most part, properties are not sold as POA. Visit any online property platform, such as RightMove or Zoopla and you can find guide prices for most property in the country, based on its area, the available number of rooms, extensions and so on. Previous sale prices and known property average price moves are all factored in and can be shown to give you an idea of what you can expect to buy or sell at.
These online platforms work hard to make this pricing accurate, as their visitors want to see the properties that suit them. No one wants to be looking for a 2-bed terrace and be shown a million-pound mansion. Without rough guides, these platforms would become a hindrance to buyers and sellers alike. Just like the Estate Agents that will ferry your property listing onto the platform, they want clear pricing for the majority of the properties shown. POA listings can appear, but they are the least common type specifically because they go against this clarity.
So if your agent is recommending that you use POA to sell your property, it’s best to have a clear idea of why this method may suit you. Below we’ve listed some pros and cons to help you with the decision. Remember, different property circumstances require different methods of sale.
For the affluent, or those who are just particularly private about their financial affairs, POA allows you to list your property without prying eyes knowing that you’re the proud owner of a multimillion-pound property, or maybe just a regular £250,000 home that you brought back in 1990 for £25,000. Whilst that final sale price may still end up listed online, it keeps that information just that little bit more private.
Selling individual or unusual properties can present a challenge for even the most experienced estate agents. Selling via POA allows time for the agent to invite offers and get an idea of what the market considers to be the true appeal and value of the property. If they are swamped with offers, with buyers keen to outbid each other, the agent may feel that holding out for a while longer is in order. Conversely, if the initial offers seem low, but nothing else is coming in, a change of approach may be required.
Sometimes house prices slip. Sometimes houses are listed at too high a value. In both these circumstances, the house may not sell and eventually, you’ll need to consider dropping your price. Your agent may well be pushing for this after months with little or no interest in your property. When you agree and have the house price reduced, this reduction shows to the keen-eyed buyers on RightMove, Zoopla, etc. Not only does this signal that you are struggling to get a sale, but it also virtually guarantees that you will receive offers even further below your desired price. With POA, no price was ever shown, therefore no reductions are going to be listed.
POA listings invite bidding on a property. If there is a lot of interest, there can be significant financial gains for the seller, and the buyer with the biggest wallet wins the prize. Whilst this will only really apply for expensive properties, or sometimes the big developers if we’re talking about land, the bragging rights for claiming the win can sometimes be enough for the right buyer on the right property.
Listing your property as POA is certainly not the route of the average seller. Consider whether your property truly has unusual characteristics that make it hard to value and also make it worth fishing for the best the market can offer. Bear in mind that 99% of the market do declare the price that they are looking to sell for, and by being the 1% that does not, your listing might be off-putting to some buyers.
Most buyers will assume a POA property is going to be more expensive than similar properties, simply due to the decision to list it differently. Maybe they are right but, regardless, this may be enough to make many buyers close the tab on your listing.
Having to call or email to enquire after a guide price for offers is going to put off plenty of potential interest. Again, if your property is just like the rest in your street, POA really isn’t for you. We live in an information age and people viewing your listing will want to know everything at all at once, from the price down to the energy certification. By leaving some of this information out, buyers will skip your listing.
POA creates additional work for your agent. Answering price queries on your listing without being able to secure viewings or offers can be incredibly frustrating and this may hamper the relationship between you, especially if you were the one demanding that the property be listed POA. In comparison, if you went for a regularly listed property with your price declared, you can expect any interest received to at least want to request to come and view the property, and getting buyers through the door is the true first step in getting your property sold.
Feel free to contact us here at Quick Property Buyer for a quick offer on your property.