P.O.A stands for Price On Application, it is commonly used on property platforms like Rightmove inserted where the price normally is. POA in property does NOT mean power of attorney.
POA is commonly used on premium listings for expensive properties or properties where the sellers want to keep the asking price private. It infers you have to ‘apply’ to the agent to know the price, but apply is a misleading word as in actual fact all you have to do is simply ‘ask’ the agent.
When using the property portal Rightmove, you can work out an estimated price of that property by how it appears on the search results page.
So for instance if the property appears in the middle of a two properties, the one above has an asking price of £950,000 and the one below has an asking price of £900,000 you can gauge the sellers of the POA property want around £925,000, as that by definition would be the median value. Although actually it could be any price from £900,000-£950,000, so you get some indication of the price of the property based on property values of those around it.
Agents have to place a POA property around properties of a similar value so buyers have some bearing on the price. Otherwise agents would be inundated with phone calls from people hopeful that the property is within their budget and it could be way out.
Why do Estate Agents use POA?
It gives the apparent allure of exclusivity – its the belief that POA will create intrigue amongst buyers as the price isn’t openly listed. Creating more interest in the property could help agents receive more offers for the property.
Data capture from buyers – they say data is the new gold. The POA method is usually used on higher priced properties often running into the several million if not tens of millions in some areas of the south east of England. For agents to collect the personal details of prospective buyers who have the means of purchasing such properties is appealing as they can sell them subsequent properties and build a further relationship with that client.
Price indecision – if there are any discrepancies between the agent and the buyer in terms of what the property should be marketed for, then POA is an option agents use to attract offers from buyers. An agent could say for example the asking price isn’t fixed but is instead between X and Y. Now that spread [between X and Y] could be several hundred thousand or millions. For example ‘‘we are asking between £1-2 million pounds for this property’’. This could help attract the best offers, rather say just marketing the property for £1.5 million for instance.
Unbuilt or newly built properties – property developers building in homes will often ask agents to market the properties as POA so they can make a decision about price when the homes are nearer completion or fully built. This way it allows both the seller and the agent to access market conditions nearer the point of sale as house prices are fluid and change. Also this is because agents like to market properties as soon as they can, even unbuilt properties as developers have less risk if they have secured a buyer earlier on into the build.
Does POA work when selling a house?
It’s quite an old fashioned method of marketing homes for sale but it is still used with high end estate agents, looking to promote their estate agency as established and premium.
With this said it does put lots of potential buyers off. The thought of having to call up or email to ask the biggest detail about a home for sale; the price – can be off putting.
In an age where so much information is at our fingertips, not having the asking price for any property visible can result in fewer enquiries.
Having fewer enquiries can actually be a good thing, if you are the agent. It will funnel only the most interested buyers in, who will enquire about the price, giving agents the ability to capture the details of those buyers and talk about the property itself.
POA can allow agents to get maximum exposure for a property on Rightmove however, which will result in more views and therefore more potential buyers.
They do this by setting the price in Rightmove slightly lower. This is so it appears amongst other properties and looks ‘better value’ for the money.
Other Estate Agents Jargon [Alternatives to POA]
Offers In Excess Of Meaning O.I.E.O
A typical example: £245,000 O.I.E.O
Agents will use OIEO when they want offers over the price that’s listed. In the example above agents want to attract offers over £245,000.
Why do agents use O.I.E.O?
They can market the property in the same price bracket as other £245,000 properties on platforms such as Rightmove, whilst trying to achieve a sale price of over that amount. This will give the property maximum exposure as it is likely to appear in more property searches being under the price barrier of 250k.
For buyers, this doesn’t mean you can’t offer the price you see in the listing or under that price.There are no hard and fast rules set in stone when making offers on properties but it is the agent’s job to guide offers using specific terminology.
You could have good ‘proceedability’ or have ‘no chain’ and therefore your offer could be seen by the seller as better than perhaps an offer of more money where that person is in a chain or are struggling to sell their home. Use what you have to your advantage, a ‘low’ offer from you could actually be the lifeline that the seller is looking for.
What does O.I.R.O mean?
O.I.R.O stands for Offers In the Region Off. Agents use O.I.R.O when they are happy to attract offers ‘around’ the price you can see in the listing. It is a technique used to attract as many competing offers as possible.
For example a property listed for £245,000 O.I.R.O would likely see offers from the low two hundred thousands to around the 250k mark.
What does Guide Price mean?
Guide price gives an estimate or approximation of the value of the property. Typically the property has a guide price a little lower than ‘market value’ so it appears ‘cheap’ or good value when compared to other properties in the same price bracket. This will encourage lots of viewings and therefore usually lots of offers, meaning the seller has some options in front of them.
Guide price can be used for properties that are unusual or ‘quirky’ where there hasn’t been a sale of a property locally like it, that the agents can gauge an asking price from. Guide prices allow potential buyers to place offers so that agents can understand what people would be willing to pay.
What does Under Offer mean?
Under offer means a buyer has placed an offer that has been accepted by the seller. But it can just mean a favourable offer has been made to the seller and they could be thinking about it.
A buyer could make an offer of the asking price and ask that the property is taken off the market. They would do this so that the seller doesn’t get any competing offers.
Agents are instructed to get the most amount of money they can for the seller and they are incentivised by commission. So what agents can do is bounce competing offers to buyers in order to get them to perhaps up their offer.
You can make an offer on a property that is under offer and the agent has to put this offer to the seller. In a scenario where two competing offers are made of the same amount the seller is likely to choose the offer where the buyer has the best ‘proceedability’ like having no chain or perhaps being a cash buyer.
The important thing to remember when you see ‘under offer’ is that it has not yet been sold and is not sold stc [SSTC].
Any property sale typically goes in these 3 steps:
- Under Offer
- Sold STC [SSTC]
- Exchanged & Completed
Sold STC meaning
Sold Subject To Contract [SSTC] – means the seller has received an offer, they accepted that offer BUT the sale still awaits the signing of contracts.
Subject To Contracts [STC] – this is a grey area, as the offer has been accepted by the seller but the buyer still has to run through a number of things in order for the sale to complete. These things include surveys and usually mortgage approvals. At this stage the sale can still fall through as the surveys can bring up structural issues or the buyer could change their mind.