Wednesday 21 August 2019

At what price privacy when selling a home?

Home truths...

Secret sale: A home sold privately without marketing and publicity is likely to fetch 10-20pc less than if it were offered on the open market with full marketing
Secret sale: A home sold privately without marketing and publicity is likely to fetch 10-20pc less than if it were offered on the open market with full marketing
Mark Keenan

Mark Keenan

Imagine Marks & Spencer had a sale on in which 20pc was knocked off the price of everything. But imagine they told absolutely nobody about it. Imagine they advertised it nowhere and put up no signs. That they didn't even put new tags on the reduced items to indicate they were on sale. Because they wanted to keep their sale private see?

So how many people would come to that sale? How successful would it be? And, along the lines of trees falling in the forest with no one around to hear: could this really be counted as a sale at all? Or is it just a notion that exists in someone's head?

In the current market too many people have notions in their head that their home or property is for sale when, in fact this is strictly not the case at all. The Collins Dictionary states the following on the state of having something up for sale: "If something is for sale, it is being offered to people to buy."

The key to having something up 'for sale' is that it must be in the state of 'being offered'. When it comes to a home or property, 'being offered' does fall into the realm of instructing an estate agent to sell but with a strict caveat that no one is to know. That's a lot more like going to confession. But this sort of thing happens all the time.

Ireland is a nation obsessed with both property and privacy - particularly when you get into its most rural locales. So when agents sell property, they often run slap bang into an almost obsessive requirement for privacy that is entirely at odds with their job of getting the most money for it. Sans marketing and publicity they cannot "offer" anything and are selling with both hands tied behind their back.

Before the boom busted, this newspaper would publish a weekly auction and sale results page. Having written up that column for many years, I would be a very wealthy man if I got a cent for every time I received a notice like the following for inclusion in that column: "Estate Agent Joe Bloggs of (insert name of rural town here) is very pleased to announce the sale on Tuesday of a well-located farmhouse on 50 acres in an undisclosed location for a very healthy price."

In cities certain estate agents are today reporting an increase in the numbers of clients interested in going on their 'private' lists. And for some years now many larger networks have run dedicated 'private clients' departments. Their job is to sell properties whilst ensuring that the public doesn't know they are for sale. These homes are advertised nowhere and there are no 'for sale' signs posted at their gate.

Obviously, agencies do sell these properties, because such specialist departments would not exist otherwise. They do it by directly contacting clients that they know are on the lookout for a property of the type being sold in secret.

This is a bit like Marks & Spencer having their 20pc-off sale but only telling those customers who they know are interested in a particular jacket or big hat. Some people will buy clothes in the end but, the 'sale' is hardly going to be a resounding success is it?

Estate agents have adapted the modus operandi of drug dealers to sell certain properties on behalf of certain types of vendors because they know some people just won't sell a home without striving to keep the fact quiet. And if agents don't have a private clients' departments, then they lose out on that segment. But there is a price to pay.

One agent I talked to with decades of experience, estimated that a home which sells privately without marketing and publicity would likely fetch 10pc to 20pc less than if it were offered openly.

That's a hell of a lot of money. On an average Dublin semi worth €400,000, that's a loss of as much as €80,000. So why are people prepared to take this sort of a financial loss for the sake of privacy? Well, perhaps that person is a showbiz personality, and there is a real security risk. If fans know where someone lives there will certainly be a long trail of fawning time wasters nosing through the property. In the case of someone who runs a business, they may fear that clients who see the family home for sale might suspect wrongly that the business is in trouble and call in their credit. So privacy here is understandable - if people are prepared to pay 20pc for it. But in cities and in rural locations, there are plenty of ordinary vendors of quite humdrum properties who are taking that kind of a financial hit for no good reason - other than to prevent people from knowing their business.

I recently discussed this with a clever individual from a rural town who is due to sell a property with a sibling. That person stated what a lot of people living in rural locations already know: "In a parish where everyone knows everyone; people are very private but also very nosey. They spend all their time trying to hide everything about their own affairs while trying to find out as much as they can about others. So it would kill me if anyone found out the property was for sale. They'd want to know how much you're worth and whether you sold it well or not and they'd be aching to find out. I'd hate that. People knock a lot of craic out of that sort of thing down at the pub. But the thing is that they'll find out in the end anyways - they always do."

So what's the point then?!! Especially when we now have the property-price register, which lays it all down on the record anyway? The answer was: "Yes, but they don't get that smugness of finding out straight away. They have to wait four or five months until it registers." So would these siblings be prepared to forgo €20,000 (€10,000 each) for the sake of keeping their property sale quiet for just four months? Remarkably that person said: "Yes. But not much more." So perhaps I've just valued privacy. The price an Irish person is prepared to pay for temporary privacy for four months on selling a house might just be €2,500 for each month - or €83 a day. We're definitely a very strange lot indeed.

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