In our daily dealings with selling agents, we have a fairly good idea of those agents who over-price (generally because they are skilled at dressing or presenting the property and therefore tend to attract a higher budget buyer) and those agents who price unethically low to attract smaller budget buyers and then use “unwritten” bids to raise the price gradually. Knowing the practice most commonly used by each agent will go some way towards guarding against any ‘sales techniques’ trap.
At the moment, Buyers Broker are sourcing a number of starter homes (all houses, we rarely advise on apartments) with budgets ranging from €150,000 to €450,000. At the lower end of the market, we are seeing a huge variance of what is considered to be market value. Selling agents do not appear to be following established valuation guidelines. I appreciate that valuations are difficult to conduct in the current market with a high degree of accuracy due to the low volume of transactions, unsteady demand and unpredictable access to credit (not to mention the much lamented lack of reliable data on recent sales). However, when acting on behalf of buyers, we are finding an increasing (and worrying) trend towards undervaluing low budget properties to ‘hook’ the unsuspecting buyer. Low offers are invited but left to sit for too long, usually for leverage but rarely to achieve a sale at that price.
For example, a property on Lombard Street, just off South Circular Road in Dublin 8 recently went to auction with an AMV of €225,000, attracting a significant amount of attention from first-time buyers, only to achieve a sale price of €330,000! Was this a fluke or blatantly misleading? What can buyers do to protect themselves?
For starters buyers, always always always put a short and definite time limit on offers, forty eight hours is reasonable (unless sellers are uncontactable for instructions etc). Also, buyers should carry out their own research or take independent advice where necessary. Finally, before considering buying a property anywhere – make sure that you know your chosen market, it is your responsibility to buy well. Use all available resources to educate yourself, each minute of research can save you thousands.
Until next time, happy house-hunting,