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‘Price on Application’ warning gets mixed response from industry

Joint statement by NTSELAT and the CMA is welcomed by most but Propertymark makes the point that's a 'tried and tested' marketing approach.

Nigel Lewis

poa price on applicatoin

The announcement by Trading Standards that posting property listings as ‘Price on Application’ or POA is in contravention of consumer protection laws has received a mixed response from the industry.

While most agents and trade groups have accepted that the National Trading Standards Estate and Letting Agent Team (NTSELAT) drive to persuade the industry to provide material information to buyers is a good one, Propertymark has only cautiously applauded this latest initiative.

nathan emerson tenant referencingIts CEO Nathan Emerson (pictured), says using POA is a “tried and tested method of marketing by agents in very specific and appropriate circumstances; for example when there may be no comparable property on the market or if a vendor prefers an element of discretion about its value.

“Trading Standards’ has taken the view that it’s confusing for consumers and in updating its guidance it is giving clarity for agents, buyers and sellers.

“This is another step forward in bringing into line the material information that all agents must provide when the new properties come to the sales and lettings market.”

Negative connotations

Jeremy Leaf (pictured), north London estate agent and a former RICS residential chairman, says: “Clearly, POA has negative connotations when sellers or agents may be trying to be a little economical and generate enquiries when they know full well it would otherwise be difficult.

“But there is a positive side. For instance, when the appearance of a property doesn’t match expectations, a specific guide or asking price might unfairly deter serious enquiries. In this way, POA can be used to attract interest and allow the agent or seller to discuss the merits or otherwise of the property before an appointment or viewing is made or the interest ends.

“We personally don’t use it too often as we find the disadvantages outweigh the advantages. But we know sellers of more expensive properties sometimes do not want their business to be disclosed, even though of course the selling price may subsequently be revealed on the Land Registry website some months after completion has taken place.”

“If POA was not allowed to be used, there may be some vendors who go off market but after there has been an adjustment, things should settle down.

Link to The Property OmbudsmanThe Property Ombudsman Rebecca Marsh (pictured), has wholeheartedly welcomed it, adding that: “Trading Standards clarification that ‘price on application’ in property listings is unlawful is helpful for both buyers, sellers and agents.

“‘POA does not help potential buyers make informed decisions about whether a property falls within their budget.

“Knowing the market price for a property before making any further commitments will place buyers in a much better position and will reduce the potential for both transactions to fall through and for disputes to arise.”

Less popular

jack reidJack Reid (pictured), Director of estate agency Orlando Reid, says: “Over the past few years in my opinion POA has become an increasingly less popular approach to marketing property.  It tends to be used by agents who are not certain of the exact value of a property and is more commonly seen when selling high end properties.  I believe it confuses potential buyers and makes them suspicious of the actual value of the property.

“In today’s market, buyers want clear, concise information from estate agents and the POA approach does not work in this way. We generally favour the term ‘guide price’ so that applicants are clear about what the vendor is looking to achieve and can decide accordingly.

“I fail to see any downside from removing the option of POA; motivated vendors need to be clear on their asking price in order to attract the right buyer”.

Huge valuation

Some agents are more amused than alarmed by the warning. Proptech commentator and former agent Andrew Stanton (pictured) says agents use POA “to create interest or where an agent is unsure of a property’s value – or when a vendor wants a huge valuation so the agent suggests POA as a way to get the instruction without the property looking over-priced”, he says.

“The joke is that the portals always slot the property in the price range anyway so it’s easy to work out what it’s for sale.”

Link to Telephony featureLee Pendleton (pictured) boss of London agency James Pendleton, says his agency doesn’t do POA on listings because it’s ‘bad practice’.

“It’s good that it’s being ruled out – it’s like looking at an agent’s window but all the properties do not have a price – pointless.”

 

 

May 6, 2022

One comment

  1. POA properties appear on the portals and agents’ websites in the search results in roughly the price point that the client or agent are aiming for, so the whole business of POA is rather a silly click bait exercise.

    Buyers and sellers prefer certainty.

    Just give them what they want.

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