Auction rooms in Ireland have long been considered the domain of seasoned investors, developers and farmers. In the past, home buyers rarely made an appearance and for first-time buyers, this was not really an option. But that was in the past. Home buyers must prepare themselves to compete for the bargains.
Public auction, by its very nature, is the truest measure of a lot (as each property at auction is referred to) or a property’s so-called market value on a particular day. In fact, it could be said that, in the current uncertain market with the prolonged delay in introducing the National Property Price Register, public auction is the only verifiable measure of real market value. However, poor demand on the day can drive down the price, and by extension, the value of a specific property resulting in BMV, or below market value deals for the lucky bidder.
In many instances, poor performance at auction is less about the property and more about the lack of strategic marketing in advance by the auctioneer and a failure to attract the right buyers.
Looking forward into 2011 and 2012, auctions are hyped to become the new reality for home buyers. This is likely to happen for a number of reasons, namely:
• Sellers are motivated to select the sale through public auction route where they are unconvinced by the estate agents valuation.
• Buyers are no longer willing to accept the lack of transparency or distorted valuations, they need assurances of value.
• The sheer stock of available properties makes marketing or promotion an issue for sellers and their estate agents. Public auctions in the past repelled home buyers but in the present climate will attract them.
• Banks and mortgage companies are sitting on large stocks of repossessed houses and apartments for the last two to three years. Several have already announced large scale auctions for Spring and Autumn 2011.
• NAMA, under its code of practice, provides for the sale of assets by way of public auction or competitive tendering.
Next auction post will look at the research to be undertaken in advance of the day…