Selling your home? Top tips to choosing your agent
One of the challenges for a vendor placing his or her property on the market is to decide which estate agent to engage. Most people usually ask a minimum of two agents to inspect their home. Some will engage more. I recommend no more than three. In many cases, if a vendor opts to ask three agents to give an appraisal, the three will be made up of two nationwide brands and one established independent local agent.
The property industry was regulated in 2011 and, nowadays, all agents must be licensed by law. This has helped to raise the standards and quality of professionals in the industry nationally. My experience over 25 years as an estate agent is that vendors tend to focus on two factors when choosing an agent - the fees, and the value being placed on the house.
A note of caution, don't base your decision on these issues alone. It may well turn out to be the case that the agent with the highest value or lowest fee is the right person for the job, however, there are other factors to be considered, including recent sales achieved by the agent and their online offering - 95pc of first-time buyers now find out about their first home online. Fish where the fish are, online.
You could be misguided if you opt for the agent quoting the highest value. Ask them to justify their valuation with relevant local evidence to back it up.
Second, the fact that an agent is charging a smaller marketing fee or commission doesn't mean they are the best person for the job. They may be trying to increase market share or they may need to charge less for a reason.
Sales fees vary across the country, from as low as 1pc in Dublin, to 2.5pc in rural areas due to the huge difference in property values. No matter where your property is located, if a more expensive agent secures an additional €5,000 for your property, it will make the additional €500 they charge in fees look very insignificant.
My advice? Try to factor in all the above before deciding on who you engage.
Looking into the future
DURING the week, over 700 delegates made their way to the third National Residential Property Conference in the RDS in Ballsbridge, run as part of the INM Property Programme. This year's theme focused on the changing face of technology in the property industry and the huge impact it now has on property sales and transactions. The line-up of speakers included Enda Gunnell of Pinergy, Keith Lowe of DNG, Niall O'Grady of Permanent TSB, and Dominic Wilson of Pi Labs, with veteran broadcaster Pat Kenny hosting and a surprise visit from rugby legend Paul O'Connell.
We learned that, in the near future, the consumer will expect to carry out all aspects of their purchase or sale, finding a house, securing mortgage approval, placing an offer, signing the contract and servicing the property, via a smartphone.
However, the physical inspection of the property will remain. Buyers will always want to see, touch and experience their potential acquisition. According to Dominic Wilson, of Pi Labs, a UK-based venture capitalist group specialising in start-up property tech companies, the estate agency of the future will be a hybrid of the traditional combined with the ever-evolving online property technological facilities.
Election reflects two tier recovery
The results of the general election are consistent with what property folk from outside the main cities had been pointing to - a two-tier revival that wasn't being felt in the regions.
When the market started to rebound in 2014, it was clear that Dublin was initially benefiting from the upturn, with increases in residential values of up 30pc over a 15-month period. Regionally, the bounce was much less marked, however. Prices were coming from a lower base, so the effects have been less evident. Most political commentators agree that the outgoing government was not sufficiently in tune with the differing needs and challenges that still exist for voters outside the capital, hence the drop in support for the coalition.
With 6.8pc growth in 2015 and a further 5pc anticipated in 2016, Ireland is now one of the fastest expanding economies in Europe. But it's abundantly clear that the impact of the upturn is only being felt in our main cities and in the commuter areas servicing the capital.
So what is the likely outlook for the regions? It is likely that rural property prices will continue to experience single digit increases year on year for the foreseeable future.
Deja vu for first-timers
To date, most of the attention in relation to the amended deposit rules has focused on the initial 20pc deposit requirement. Another issue, however, which has become even more of a challenge for buyers, is the earnings capacity requirement (see Ronan Lyons column, page 9, for more).
The current Central Bank rules provide that lenders can only advance a maximum of 3.5 times their gross salary to 85pc of borrowers. So, take for example, the greater Dublin area and surrounding commuter counties where it's not uncommon for a typical three-bed starter home to cost €280,000. A working couple would need to be earning €80,000 a year cumulatively to qualify.
According to CSO figures, the average salary for an individual in 2015 was €35,600. Most potential buyers simply will not qualify for a mortgage unless they move further out from the capital where average values are lower.
Agents outside the M50 report that there now seems to be an element of deja vu, as first-time buyers, in an attempt to secure their first home, are again being forced to increase their commuting time. First-time buyers in the UK can source up to 4.5 times their gross income.
Let's be sensible and controlled in allowing those who can repay a mortgage to secure a mortgage. On a positive note, if the trend continues, it may just create a demand for some of the surplus houses built in out of the way places during the boom.