What Does POA Mean in Real Estate, Sales, Rent & Houses?

Property terms won’t sound the same for all, obviously, it includes jargon and specific acronyms that only a field person can understand at the first go. From this debate we have a term “POA” which is often seen on the newly listed houses, highly renowned jewelry, or some extraordinary cars. But what does POA mean in Estate Agent, what does it mean, and what importance does this jargon hold while dealing with the houses selling/buying process?

Well, to help you with this we are here with the most detailed guide. We will check how and why the major property platforms like Rightmove, Zoopla, and Onthemarket are using it? Is it some kind of code or just privacy terms for the security purposes? Well, we are going to uncover what it means in sale and rental properties, the pros and cons hidden behind this pricing word, and many more relevant stuff. Keep reading to explore each aspect keenly.

What Does POA Mean in Real Estate?

Often, you have seen POA or Price on Application while strolling through the properties listed on the platforms. This is actually a hidden way to list a property where the buyers can’t directly know the price of the house. So, to know he must contact the estate agent or the property owner. This happens on-demand by the seller because of the privacy terms that they demand. Nobody can question that – but is it really useful or is it pushing the potential clients? The mystery is yet to disclose. 

According to some surveys, it is stated:

Edit after further advice, this policy is now breaking rules from The Consumer Protection from Unfair Trading Regulations 2008. 

This means that the seller doesn’t want to engage in the selling process without the great interest of the buyer. This keeps them from hiding the actual price of the house or property being listed. Moreover, the buyer knows that the market trend keeps fluctuating so they don’t have to be stuck with the same price in such situations.

What does POA mean in Rental Properties?

Now, let’s differentiate the term POA in Selling Properties and POA in Rental Properties. Well, the same meaning goes like the Price on Asking or Price of Application.

You will usually see POA used for rental properties in brand-new developments or areas super popular with tenants. This way, landlords can get a sense of how much they can charge and see how much interest there is from potential renters. Using POA can actually create a bit of a competition among people who want to rent the property. It’s like a gentle bidding war, where would-be tenants can make their best offer. This helps landlords figure out the going rate for their property and find the best tenant.

There’s a big difference in how often POA is used for rentals versus sale – which creates the second difference. You’ll see POA popping up a lot more often on rental properties than on properties for sale. Another difference is the types of properties that use POA. For rentals, POA is used across the board – from affordable flats to luxury homes. But when it comes to sales, POA tends to be used more for unique or high-end properties.

Why do Estate Agents and Sellers use POA?

The basic purpose of using POA is to maintain the privacy and hide the actual price of property due to all the obvious reasons. Clients don’t appreciate sharing the actual worth of the house before the final deal because it causes uncertainty and leads to wrong decisions. Specifically, the celebrities use it a lot to keep the things confidential. Moreover, some clients are afraid or more concerned, hence they want to keep the price closed from friends and relatives. 

Sometimes, estate agents and property owners just can’t see eye-to-eye on a price. That’s when agents might use POA as a way to list the property without making any promises about the price. It’s like a trial balloon to test the market and see what buyers are willing to pay.

Using POA can be a win-win for both agents and property owners. Agents get to:

• Gauge the market price and make smarter recommendations
• Build their network of potential buyers
• Create buzz and interest around the property

And property owners get to:

• Test the market without committing to a specific price
• Get a sense of what buyers are willing to pay
• Potentially attract multiple offers and drive up the price

Why would a property be advertised ‘Price on Application’?

There is a whole stack of reasons sellers prohibit sharing the price of property publicly. All of them are valid as they are directly appealing the seller’s interests. Here, we have scratched each reason in detail.

To create a sense of mystique

To keep the things fascinating, sometimes sellers love to create ambiguities, which leads them to the use of POA. This approach makes the property more valuable and important. By keeping the price under wraps, you can create a sense of exclusivity that might just pique the interest of potential buyers. It’s like saying, This property is so special, we only share the price with serious buyers.

This approach can also help minimize price negotiations. Some buyers might be hesitant to argue over the price for fear of missing out on the opportunity to own the property. While this tactic might not work on every buyer, there are some who will be drawn in by the allure of exclusivity.

To secure the potential buyers’ contact details

The use of the POA can be a strategic move to capture the interest of potential buyers. When someone contacts your estate agent to inquire about the price, their details can be collected and stored for future reference.

Even if the buyer isn’t interested in the property at the initial price, they might become interested if the price is reduced or if the agent builds a rapport with them. By having their contact details on file, your agent can follow up with them in the future, keeping them informed about price changes or other relevant updates.

A good real estate agent can work wonders with their personal touch. By building a relationship with the buyer, the agent can understand their needs, preferences, and motivations. Using POA can also help your estate agent build a valuable database of potential buyers. This database can be used to:

• Inform buyers about new properties that match their criteria
• Provide updates on market trends and price changes
• Offer exclusive access to off-market properties
• Build relationships with buyers and establish the agent as a trusted advisor.

To protect the seller’s privacy

Listing the property as Price On Application can be a discreet way to maintain your privacy. Suppose you are a public figure seeking to avoid media attention or simply prefer to keep your financial affairs private from curious neighbors, friends, or family members. In that case, POA can help keep your property’s value under wraps.

By not publicly disclosing the price, you can avoid drawing unwanted attention to your property or financial situation. This can be especially important for:

• High-profile individuals who value their anonymity
• Homeowners who prefer to keep their financial affairs private
• Those who live in close-knit communities where everyone knows each other’s business

Using POA can help you maintain control over who knows the value of your property. Only serious buyers who contact your estate agent will be privy to the price, ensuring that your financial information remains confidential.

Uncertainty of Seller

Sometimes, when a property is listed as Price On Application, it’s because the seller hasn’t quite figured out how much they want to ask for it. They might be unsure of the property’s value or disagree with their agent’s assessment. In this case, the seller is essentially testing the market.

Doing this, the seller is inviting potential buyers to make an offer. This helps the seller gauge interest and get a sense of what buyers are willing to pay. The seller can then use these offers to determine a fair and competitive price for the property.

This approach is especially useful for properties that are one-of-a-kind or hard to value. Maybe the property has a quirky layout or a unique feature that’s difficult to price. By listing it as POA, the seller can attract buyers who are willing to pay a premium for something special.

In the end, the goal is to find the sweet spot – a price that’s competitive, yet reflects the property’s true value. By gathering offers and testing the market, the seller can calibrate their asking price and attract the right buyer.

In order to hide a downward trend in price

There is another benefit in this process – it keeps buyers in the dark about any price drops. This is especially useful in areas where property prices are generally rising, but your specific property has lost value due to local trends.

When you publicly reduce your asking price, buyers can sense your motivation to sell. This can put them in a stronger negotiating position, making it harder for you to get a good deal. By listing as POA, you can keep price reductions under wraps.

Since buyers only find out the price when they inquire, most people won’t know about any price changes. This helps you maintain control over the negotiation process and avoid being taken advantage of. By keeping your price private, you can avoid giving buyers an upper hand in negotiations. This helps you stay in the driver’s seat and get a better deal for your property.

What are the Pros and Cons of using POA?

When something seems very beneficial, at the same time it comes with many unseen drawbacks, which balance the things. Here, in the case of POA we have pros and cons side by side. Let’s find them out below:

Pros of POA

Below we have the benefits a seller can get while using the POA. 

Maintains Privacy

Listing a property as POA is an effective way to maintain your financial privacy. By not publicly disclosing the price, you can avoid drawing unnecessary attention to your financial affairs. This is especially important for individuals who value their privacy, such as celebrities, public figures, or business executives.

This will save you from the nosy neighbours, or anyone interested for no reason in your property. By keeping your property’s price private, you can also avoid being targeted by scammers or opportunistic buyers. All in all, we can say you have complete control over the property’s privacy and security issues.

Conceals Price Reductions

If you list the property on the POA, it will help you conceal price reductions, which can be a major advantage in negotiations, when you are forced to reduce your property’s price due to lack of interest, listing it as POA helps you avoid signaling to potential buyers that you’re desperate or motivated to sell.

By doing this, you can avoid giving buyers an upper hand in negotiations. When buyers see a price reduction, they may assume you are desperate to sell and make a low-ball offer. It also gives you the flexibility to adjust your pricing strategy without publicly disclosing the changes.

Idea for Niche Property

Listing a property as POA is an effective way to sell niche properties that are unique or quirky. When you are selling a one-of-a-kind property, it can be challenging to determine its value. POA allows you to gauge buyer interest and determine a fair market price.

Cons of POA

While listing a property as POA can offer some benefits, it also has several drawbacks. Here are some of the main cons of using POA:

Creates a Barrier to Purchase

POA can create an additional hurdle between the buyer and seller. Buyers may be deterred from pursuing a property if they have to contact the agent to find out the price. This can lead to a loss of interest and a decrease in potential buyers.

Lack of Transparency

POA can be seen as a lack of transparency – this leads to mistrust among buyers. Some buyers may assume that the seller or agent is trying to hide something or extract as much money as possible from the buyer.

Deters Bargain Hunters

POA can deter bargain hunters who are searching for properties within a specific price range. These buyers may exclude properties listed as POA from their search, which can limit the potential market for the property.

Creates Extra Work for Agents

POA can create extra work for estate agents, who may have to deal with multiple enquiries from uninterested buyers. This can be time-consuming and may lead to frustration among agents.

May Contravene Consumer Protection Legislation

Some commentators believe that listing a property with a POA tag may defy consumer protection legislation. This is because buyers may not have access to all the information they need to make an informed decision.

Can Lead to Breakdown of Trust

POA can lead to a breakdown of trust between the seller and buyer. Buyers may become cautious or suspicious if they are not provided with clear pricing information, which can lead to a breakdown in negotiations.

May Not Be Suitable for All Properties

POA may not be suitable for all properties, particularly those that are priced competitively. In these cases, listing the price clearly may be more effective in attracting buyers.

Can Limit Online Visibility

POA can limit online visibility, as some property portals may not display properties with unclear pricing. This can reduce the potential market for the property and make it harder to attract buyers.

May Not Be Suitable for Time-Sensitive Sales

POA may not be suitable for time-sensitive sales, where the seller needs to sell the property quickly. In these cases, listing the price clearly may be more effective in attracting buyers and achieving a quick sale.

Can Be Seen as Unprofessional

POA can be seen as unprofessional or even deceptive, particularly if the seller or agent is not transparent about the pricing. This can damage the reputation of the seller or agent and make it harder to attract buyers.

Does Price on Application Work?

Whether the POA works or it fails to attract the calculated benefits can be determined by the type of property, its value, and the target audience. While POA can be beneficial for certain properties, it may not be the best approach for others.

I will show the top scenarios where the POA can be an effective strategy for properties which demand confidentiality. 

• Luxury properties worth seven figures or more, where POA can help filter out price-conscious buyers.
• Properties owned by celebrities or high-net-worth individuals who value their financial privacy.
• Unique or exclusive properties that are likely to attract serious buyers who are willing to pay a premium.

However, for conventional family homes or properties in the mid-range market, POA can be a major turn-off for buyers. Here’s why POA falls short:

• Most homebuyers have a strict budget in mind and will avoid properties with unclear pricing to prevent disappointment. 
• POA can be perceived as a lack of transparency, which leads the buyers to question the seller’s motives or the property’s value.
• Buyers can often uncover the price of a POA property by researching online listings, historic sales data, or consulting with local agents.

How to calculate the value of a Price on Application house?

When a property is listed as POA, it can be challenging to determine its value. However, there are ways to make an educated estimate. Here is a step-by-step guide to help you calculate the value of a POA house:

1. Start by searching online listing sites like Rightmove, Zoopla, or other local property portals. These websites can provide valuable insights into the property’s value.
2. When an estate agent lists a property, they enter a secret price that determines which properties it will be advertised alongside. This secret price is not publicly visible but can be inferred by analyzing the property’s online listing.
3. Look at the property’s online listing and take note of the following:
   • Check the prices of similar properties in the same area to get an idea of the POA property’s value.
   • Consider the property’s size, condition, location, and amenities to estimate its value.
   • Pay attention to the agent’s description of the property, as it may provide hints about its value.
4. Some property portals, like Zoopla, provide estimated values for properties based on their algorithms and market data. While these estimates may not be entirely accurate, they can give you a rough idea of the property’s value.
5. If you’re serious about purchasing the property, consult with local estate agents who have knowledge of the area and the property. They may be able to provide you with a more accurate estimate of the property’s value.

What are the alternatives to using POA?

Till now, we have checked that POA can be very beneficial for certain properties but it is not the only way to sell your house. fact, there are several alternatives that can help you achieve your goals.

Property Auctions

Selling your property through an auction can provide a degree of certainty around the sale date and attract committed buyers who are willing to pay a deposit to bid. Here are some benefits and considerations:

• It follows a fast sale process. 
• There are committed buyers that approach. 
• It has potential for competitive bidding.

If we talk about the considerations, auctioneers may encourage low reserve and starting bid prices. Also, it is a time-consuming process and has uncertainty around the final sale price. 

Estate Agents

Selling your house through an estate agent is often the best way to achieve the highest price for your property. Here are some benefits and considerations:

• The benefits it has are that you get expert knowledge and marketing
• Access to a wide pool of potential buyers
• Guidance on pricing and negotiations

While the considerations points you need to overview are the commission fees and other costs, a time-consuming process, and you will need to view paperwork that can be stressful.

Cash House Buyers

Using a cash house buyer like SmoothSale can provide a fast, flexible, and simple way to sell your house. Here are some benefits and considerations:

Benefits

• Quick sale process (as little as 7 days)
• No fees or commissions
• No viewings or paperwork hassle
• Flexibility on completion date

Considerations

• May not achieve maximum market value
• Limited control over the sale process

Wrapping Up

We have come to a conclusion about what does POA mean in real estate. Well, it is a disclosed way to list the house for sale without mentioning the price. It stands for the Price on Application or the Price on asking, which is only opened when any potential clients reach out and they seem interested. It has come with benefits and drawbacks side by side, but for some it is for sure a safer way.

Frequently Asked Questions