Buying a house is difficult, with nothing ever being straight forward. And that’s not even including all the language used by estate agents, such as POA, OIEO and guide price. So, what does POA mean in property? How does it affect you and putting in an offer on a house? We break it all down for you…
If you have a specific question this menu will help you find your answer. Want to know everything? Great, take it all in…
- What does POA mean in property?
- Why do estate agents put POA?
- Does POA work?
- What about other estate agent sales terms? What do they mean?
What does POA mean in property?
POA stands for price on application, which will mean when you’re on a property website, such as Rightmove, in place of the price you will see POA. Price on application is normally used on houses which are more unique or expensive, which may be why they want to keep the price private.
Having said this, on most property portals it can be quite easy to work out the approximate price as although to websites users the price will be price on application, when the estate agent inputs the property, the website asks for a secret price, meaning the property will appear in the area that’s reflective of its price.
For example, if the property is worth £300,000, the property will appear with the other properties of this price. If you want to try work out the actual price of a house that says price on application, look at the prices of the houses above and below it to give you an idea of the price.
Why do estate agents put POA on properties?
There are multiple reasons why an estate agent will use price on application and generally speaking, it’s something that’s used for more expensive properties. Using price on application almost gives the property a bit of exclusivity, as you can only find out the price by asking. It may also be the case that the owner has asked to use price on application to keep the price private from neighbours or family. Or the seller could be a celebrity as so values privacy.
Price on application can also be used if an estate agent can’t decide on a price or can’t agree on a price with the vendor. This way the property can be marketed, without any commitment to price, allowing enquiries from interested parties which may also help the estate agent get a better idea for the price, as the enquiries may say what they feel the house is worth.
Some estate agents think the mystery of writing price on application so the price isn’t known will create interest and will make people want to get in touch and find out.
Another added bonus of price on application is that, as interested parties have to get in touch to find out the price, the estate agent then has their details and can stay in touch with them.
Does POA work?
As a general statement, no price on application doesn’t work but that doesn’t mean it won’t work for everyone. As we mentioned earlier, it’s easy for customers to estimate the cost of the house as property portals require a price to be selected even if it’s displayed as price on application.
Having said this, sometimes estate agents will input the secret price as lower than its actual price. This will mean if someone filters the properties to have lowest first, the property will come up nearer to the beginning, in the hope that more people will see it.
Some will get put off by price on application because they will take the view that if they have to ask for the price, it probably means they can’t afford it, especially as generally properties with price on application are in excess of £2.5million.
Some will also see price on application and will think they can’t be bothered to ask, especially if they’re in a rush to find a house – the easier the information is available, the better.
Also, price on application is rarely used in recent times, as the method is quite old fashioned. However, this may mean if your property is price on application it could stand out – but is this for the wrong or right reasons?
What about other estate agent sales terms?
There are other estate agent sales terms you may see regularly, such as OIEO, OIRO, guide price and offers invited. Each term has a different meaning, which we know can get very confusing! But don’t worry, we’re going to break them all down for you now…
What does guide price mean?
Guide price means the price displayed is an approximate value of what the estate agent feels the property is worth. In truth, it may be that the estate agent hasn’t decided what the house is worth and so advertises it with guide price to encourage offers from buyers.
Guide price may be set on the lower end of what the estate agent feels the property is worth to make the house look like a good deal and will therefore encourage buyers to come view the property.
By getting offers from buyers on a property with guide price, the estate agent will be able to get a better idea of what the house is actually worth, as ultimately a house is only worth what buyers want to pay for it.
Difference between guide price and asking price
Guide price is decided upon based on what the seller and estate agent feel will encourage interest and offers from potential buyers, whereas asking price is less of a guide and more what the seller and estate agent feels the property is worth. It is often the asking price will be slightly above what the property is worth, in the hope that someone will want to pay it or that there’s more opportunity for movement.
For example, if a seller wanted £300,000 for their house and so set this as the asking price, it’s likely a lot of the offers received will come in below this. If the seller marketed the property for £330,000, it’s more likely the seller will get offers for £300,000. This is because most estate agents tend to overvalue a house by 5-10% so buyers compensate for that by offering 5-10% below asking price.
Guide price is more of an approximate figure of what the seller feels the house is worth, whereas asking price is normally a more accurate figure of what the seller and estate agent feel the property is worth.
What does OIEO mean?
OIEO is an abbreviation of offers in excess of. This can also be written as OIRO which stands for offers in region of. OIEO is often used when the seller wants more for the property than what the estate agent feels it’s worth.
Offers in excess of can often put off potential buyers as they worry that if their offer is not over the price listed then it will be disregarded. However, we say providing your offer isn’t so low that it’s considered a ‘cheeky offer’ you can still submit an offer even if its not in an offer in excess of the price, as the vendor may not have received any other offers and will know that you’re interested.
If you’re wanting to place a bid on a property with OIEO, but your bid is below the price displayed, try to ‘advertise’ to the seller what makes you a good buyer. For example, are you a cash buyer? Able to complete fast? No chain? All these are conditions which could make your offer more attractive so be sure to make it known to your buyer.
According to the Daily Mail, 85% of homes sell for less than the asking price, which the estate agent should be making the seller aware of should a buyer submit a lower offer, especially if they have other advantages.
Houses which are difficult to value may say OIEO as there’s not a lot on the market or previously sold that the property can be compared to.
What does offers invited mean?
Offers invited is generally used when the estate agent isn’t too sure on the value of the property and so is inviting buyers to view the property and give offers, to give more of an idea of what the property is worth.
Offers invited is slightly similar to guide price in that it’s likely to be on houses that aren’t comparable to anything currently on the market or in previous sold prices. Sometimes offers invited will have a deadline for when the offers need to be in by to be considered by the buyer. This is normally when the seller is trying to get a fast sale and so by putting a deadline installs a sense of urgency into potential buyers.
Offers invited may also be used if a property has been on the market for a long period of time, as it invites potential buyers to make an offer, even if it’s below the price listed.
Do you have anymore questions about POA? Or maybe you have some insight to give about what sort of offer you should give when a house says OIEO? Whatever it is, don’t hesitate to get in touch!