Tuesday 23 January 2018

Home Truths: Ireland's most misunderstood estate agency

Mark Keenan

Mark Keenan

Long-established Irish estate agencies are planning a return to the auction system of old and most have one eye on the success of the Allsop Space monster sessions – the only auction show round these parts these last few years.

AS did Ireland a massive favour by "unsticking"a frozen market in which established estate agents could neither value property nor sell it.

Thanks to the guideline price nonsense that had gone on in the boom years, no buyer trusted a word from an Irishman once he stood up on an auction podium and pointed a gavel.

Enter AS with an imported Englishman named Murphy bringing the gavel.

The British Allsop company, which owns a share of the business with the Irish "Space" contingent, had previously "unstuck" the UK market right after their big crash of 1989. This too was a market where buyers didn't believe their estate agents and where nothing could be valued or sold.

Soon what had seemed impossible was happening three or four times a year – a hundred property types were selling (and therefore being valued publicly) every quarter on the quarter.

The established Irish firms ran copycat "monster sales", which failed because unlike AS, (a) they usually didn't have disclosed reserves and (b) when they did, those reserves were set by the vendors and were therefore totally unrealistic.

What the Irish establishment couldn't grasp is that AS told vendors to bugger off if they wouldn't accept the AS valuations for auction.

The established Irish agencies aren't the only ones who don't understand the AS system.

A few weeks back I mixed with the protesters outside the last event in Ballsbridge. Many had been in the group that had previously closed down the previous summer auction. All were heartfelt in their motives. But was it just possible that they wanted to hang the "wrong man"?

A Mr McFeely said he was protesting the fact that Ireland had "gone back to the "black and tans" with "British" firms selling repossessed property "pulled out from under ordinary Irish families."

I mentioned that AS was the only Irish estate agency (it's an Irish-owned company) with a public guarantee that they didn't sell repossessed homes (aside from those attached to businesses, like pubs for example).

None of the protesters I asked could find me a single person who has had their (non business linked) home taken off them and sold at an AS auction.

In fact I would argue that the exact opposite is true – the AS monster sale is a vital enabler for debt forgiveness in Ireland.

Yes you did hear me right.

This is because a huge tranche of the company's sales catalogue comes via investors and troubled property owners whose debts have been taken over by foreign investment companies.

The owners bought the "bad" Irish loan books from departing banks (like Bank of Scotland). They paid as little as 20c in the Euro for these bad loans and now they have sought out the long-harassed owners to offer them a deal.

The latter who have long wanted to divest themselves of their properties and their millstone negative equity loans are now being offered attractive write-downs of 60pc and more by the new loan holders.

To an owner of a one-bedroom shoebox in D1 tied to a €300,000 loan, an offer to disengage for €100,000 is manna from heaven.

All he has to do is manage to sell the property for a 40pc of what he paid for it. God knows he might even make a few bob into the bargain. There is finally light at the tunnel's end.

So he takes the apartment to the AS auction – with dozens of others just like him. But it gets closed down by protesters – shouting about fair treatment for those in debt.

It's a bit like stoning the fireman who arrives when your house is in flames.

Irish Independent

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