Online auctions could cost you, so don't rush in
Ireland's first online property auction got off to a shaky start last week. The auction, which was run by Allsop's Space, kicked off last Tuesday. Although it was due to finish last Wednesday morning, the auction had to be postponed after its website crashed. The high volume of traffic to the website was behind the technical difficulties, according to Robert Hoban, director of auctions at Allsop Space.
"Thousands of people accessed the website," said Mr Hoban, who added that there had been "huge demand" for the auction.
Buying property at an online auction isn't for everyone. However, if you're comfortable with the notion, get legal advice and know exactly what you're getting into. Understand the terms and conditions of the auction - and be sure you can meet them.
To be able to bid at last week's online Allsop auction for example, you had to give your credit card as security - and agree to having €5,000 taken out of it if you emerged as the winning bidder for a property. This €5,000 security, which goes towards the 10pc deposit to be paid by a buyer, was to be given for each property you planned to bid on.
As you only paid the €5,000 if you emerged as the winning bidder for a property, you could clearly avoid paying the money by not bidding at all. However, giving security of €5,000 through your credit card before you can even enter an auction is a new departure - and one which many house hunters could feel uncomfortable about. In the traditional Allsop "venue" auctions, such as the one held in the RDS earlier this month, you only have to pay a deposit of €200 to attend the auction - and €185 of this is refunded.
One of the main advantages of online auctions is transparency, according to Mr Hoban.
"All bids are displayed online so there's full visibility," said Mr Hoban. "You have a log of the bids - unlike the venue auctions, which don't have this."
Although buying property online is a new phenomenon in this country, Irish people have been bidding at online auctions for more than fifteen years. The online auction site www.ebid.ie has been around since early 2000 and eBay launched in Ireland in early 2001.
Anything from the mundane to the weird and wonderful can be bought through an online auction. A handwritten letter by Albert Einstein was sold for over US$3m (€2.3m) on eBay a couple of years ago. The original 1923 Hollywood sign was sold on eBay for $450,400 (€381,308) about nine years ago.
Most people who shop at online auctions are looking for bargains. However, it doesn't always work out cheaper to buy something at an online auction than on the high street.
Fans of Game of Thrones would have paid €59.99 for a DVD box set of the first three seasons of the TV series had they bought it in HMV Dundrum last week. The same box set could have set you back between €40 and €66.73 on eBay early last week, depending on who you bought it from.
One such box set was priced at €50.37 on eBay. Although this initially looked cheaper than the high street price, €16.36 postage pushed up the cost to €66.73.
Golden Discs in Swords charged €12 for the first season of House of Cards, the TV series starring Kevin Spacey, early last week. You could have paid €20.25 (including €2 postage) had you bought the same DVD on eBay last week. One seller had advertised the same DVD second-hand for 1c on eBay last week but as the postage came to €12.58, it would have cost €12.59 to buy it - more than what Golden Discs charged for a new DVD.
You could make savings on online auctions when buying baby equipment - as long as you're prepared to buy second hand. A Maxi Cosi Cabriofix car seat was up for auction for €1.25 on eBay last Tuesday - plus postage of €28.34. By Wednesday, six bidders had pushed up the price to €6.29 - plus postage.
This was still a fraction of the price you would have paid for the car seat had you bought it on the high street. (You'll typically pay between €120 and €160 to buy the same car seat new in a nursery store.)
One of the main disadvantages of online auctions is that you can't inspect the item that's up for sale. You're therefore relying on the seller to tell the truth about the condition and quality of the object. It's important therefore to find out as much about the seller as you can.
"See what the reviews say about the individual or company who is selling the goods on the website," said John Shine, director of compliance and enforcement with the consumer watchdog, the National Consumer Agency. "There may be information about the seller on message boards - or you could find a review of the seller by searching his name on Google. You will often find reviews of sellers - particularly where the trader does not have a good track record. Remember, if you're buying from a trader, you are covered by consumer law - but if you're buying privately, you're not."
For example, under consumer law, you're entitled to redress if you buy something from a business or trader which isn't fit for purpose or as described. This isn't the case if you buy privately - or if you buy outside the EU.
"If the business you buy from in the online auction is based within the EU, you're covered by consumer law," said Mr Shine. "But if the business is based outside the EU, consumer law isn't as certain."
It's important to check the terms and conditions of the auction website so that you know where you stand if things go wrong, advised Mr Shine.
Be wary of sellers who try to strike a deal outside the online auction website as this could indicate that they're up to no good.
Be careful too how you pay for something online. "Use a secure method of payment, such as PayPal or a credit card," said Mr Shine. "It can be very difficult to recover your money if you send money by cheque or Western Union and run into problems afterwards."
Sunday Indo Business