'The first time we’ll see the house will be the day we move in' - Couple who've bought their Dublin home mortgage-free through a buyer's agent
You know it's a rising market when the number of buyer's agents is on the up. Katy McGuinness meets the people whose job is to take the pain out of house-hunting, and couple Patricia and John Purell who used a buyer's agent to buy their home.
Back in the day, finding a house to buy used to be a - relatively - straightforward business: you set a budget and an area, viewed a few that met your criteria, made an offer on the one that you liked best, haggled a bit, agreed a price that was a little but not too much lower than the asking price, and handed the paperwork over to your solicitor to deal with. If you already had a house, your bank would lend you 'bridging finance' to tide you over until yours sold, and you would move out of your old house and into your new one on the same day. Sounds positively quaint.
In a housing market as heated as Dublin's is right now, there are more buyers competing for houses than there are properties available, and it's not uncommon for potential buyers to view hundreds before securing one. It's a time-consuming and stressful business, one that's difficult to keep on top of when juggling work and family commitments, and nigh on impossible if you don't happen to live in the country where you want to buy. The chances of flying home for a week in the hope of finding and signing off on a property to buy are slim to non-existent.
Enter the buyer's agent - essentially an estate agent who works for you rather than for the vendor - a relatively uncommon bird in Ireland until recently, but whose numbers appear to be growing.
Liz O'Kane has recently established House Hunters under the Hunters estate agent umbrella and is one of the few buyer's agents to work inhouse at an estate agent in Ireland.
"It's very common in the US and Canada, Australia and some European countries such as Belgium and The Netherlands," says Liz, who has been working as a buyer's agent since 2002. "I was the first in the country - I just saw a gap in the market. My clients are mainly Irish living abroad who want to move back to Ireland when their children are about to start secondary school, or others looking for investments.
"I look after two clients a month. If I have three I'm under pressure. I want them on the books quickly and off again quickly. This is intense. I don't have time for buyers who say they are not in a hurry. Last week I viewed 16 properties in a day for one client. I was able to eliminate a number immediately and give the client reasons why, then prepare a short list for the client to view. A few days later I was bidding on two of them and we secured the client's preferred option."
Liz says that she is often contacted by estate agents about potential off-market sales.
"Most estate agents know that I do this, so if a sale does not progress for them, I might get a phone call to see if I have anyone on my books who might be looking, and there are always vendors who don't want a full marketing campaign, for whatever reason."
Liz sees no conflict in her in-house role and says that the terms and conditions under which a client engages her services protects them fully.
"That said, it has not yet happened that I purchase a house for a client that is being sold by Hunters. As a bidder, you are able to ask to see all registered bids on a property. The estate agent doesn't have to show them to you, but you are entitled to go to the PSRA who can then direct the agent to show those bids to you. It would be very foolish of anyone to do anything underhand."
Liz holds a PSRA licence and charges a fixed fee of between €5,000 and €8,000, half payable upfront, with the balance due when the holding deposit is paid on a property she has sourced.
‘We thought the whole process would take longer’
Patricia and John Purell have been planning to move to Europe from Pasadena, California, where they live now for the past six years. Patricia already holds a French passport and John is in the process of applying for one; Patricia’s mother is moving with them. They visited several others countries before deciding on Ireland, drawn here by the climate, culture, food and landscape. Having settled on Dublin as they wanted the convenience and infrastructure of a capital city, they rented Airbnbs in various neighbourhoods around the city to try and get a sense of where they would like to be.
They decided that they would like to be close to the coast, as they are bringing their Alaskan Malamute, Kaya, with them and would like to be able to walk on a beach. One of their hosts introduced them, indirectly, to Liz, who encouraged them to hop on the train out to north Dublin and check out areas such as Malahide, Lusk, Rush and Skerries.
“We both work full-time,” says Patricia. “So Liz was exactly what we needed. We told her that our budget was €450,000, that we wanted a quality property in good condition and that we wanted to buy mortgage-free. We didn’t think that we could afford to be right on the coast, so it was a nice surprise when Liz came up with two properties — one in Malahide and one in Skerries, both of which we liked very much. We were outbid on the property in Malahide, but we had fallen in love with Skerries and its little harbour and were delighted when Liz negotiated a deal within budget. We have gone sale agreed and should close in the coming weeks.
“We had thought that the whole process would take longer, and hadn’t planned to move until next year. But it only took about two months from meeting Liz to going sale agreed and now that we have the house in Ireland, we are getting ready to pack up house in Pasadena and put it on the market. The first time we’ll see the house in Skerries in person will be the day that we arrive to move in. We have full trust in Liz and the whole process has been very smooth.”
Meanwhile, Shane O'Connor of Eldron Property Consultants has been working in the business since the age of 16, with senior roles at DNG, Sherry FitzGerald and Savills on his CV. He holds a property licence from the PSRA and an honours degree in property studies from GMIT.
"My dad and grandfather are in the building business and I've always loved the deal - I was selling clothes in the market in Monaghan at the age of 12! But during my years as an estate agent it became patently obvious to me that the property market favours the seller. Buying a home is a huge investment, yet no one is incentivised to get the purchaser the best price, to steer them in the right direction or to negotiate on their behalf."
The transition from seller's agent to buyer's came when an Irish rugby international rang Shane to ask for advice when he was buying a new home. Other high-profile people followed suit - Shane says that word of mouth is important when it comes to securing new clients - and he saw the opportunity for a new business.
He set up Eldron early last year and since then has acted for buyers in €15m worth of property transactions.
"I work with both owner-occupiers and investors," says Shane. "The average yield that I have secured for investors to date is 8.6pc, which is considerably higher than the market average."
To avoid conflicts, Shane takes on only one client per bracket at a time, so he will never have, for instance, two clients looking for a period property in Ranelagh priced between €1m and €1.5m. Currently he has eight clients on his books, and says that 12 at any one time is his limit. They are spread all over the world from Australia to California, with some based in Dublin.
"Someone could be looking for a year and a half and it's just not working for them," says Shane. "I'm not a magician, but I can find off-market properties.
"To me it makes sense to have someone acting for you as a buyer. When you sell your property, you hire an expert to do it - it should be the same when you're buying."
Shane charges a flat fee of €5,000 plus VAT, whether the property he is seeking to buy is priced at €200,000 or €2m.
There is an initial payment of €250 to engage his services, with the balance due when the property is acquired - €2,250 on contract, and €2,500 on completion. He works with a couple of different solicitors and says that he is very hands on, doing whatever is necessary to bring a transaction to its conclusion, collecting certificates and keeping a constant line of communication open with all parties.
"My typical client is an Irish guy based in Australia who is planning to return to Ireland at some point in the future. I had one recently who wanted to spend €550,000 on a family house in Clontarf, but I found him a much better house in Drumcondra with a 130ft garden for €670,000, and got it furnished and rented out for him within a week of getting the keys."
Shane does not act for vendors, as he feels that would lead to conflict of interest, and predicts that in another year or two there will be more buyer's agents operating in the Irish market, but that not all of them will be licensed.
Margaret Penrose of The Buyer's Agent took over the business from founder Karen Mulvany in 2016. "Karen started the business after she went through the process of buying her first house," explains Margaret. "She got in touch with Phil Spencer [from Location, Location, Location] of Garringtons in the UK for advice, and the footprint of the two businesses is very similar; we work with them from time to time."
Margaret says that as a buyer's agent she works very closely with her clients. "Many would be couples with small children who are struggling to get across the line. The first question is whether we can work within the client's budget. It's important to manage expectations, and that clients are realistic. You can't go by the asking prices on property websites.
"We research properties (both on and off-market), go to viewings and take photos … 'real' photos, warts and all. Then we make a report and recommend what they should go and view. If they decide to go after a property, we handle the negotiation and stay with them until they get their keys. Some clients are prepared to buy on the strength of our recommendation, supported by videos and photos, but we would always prefer that they see it in the flesh."
The Buyer's Agent works on a commission basis, charging 2pc of the value of properties over 500,000 and 1pc on values below that figure, although flat fee arrangements are also possible. A non-refundable €500 retainer is payable on signature of a letter of engagement and is set against the final invoice.
Margaret says that 10pc of their clients are in the €1m-plus bracket, with 25-30pc over €500,000 and the rest below that figure. Many are either investors or couples living abroad.
"We are here for the people who either don't want to do the work themselves or can't. Often people are doing it all right but they are just getting outbid. One couple living in the west had made 17 trips to Dublin to find an apartment for their son who was going to be studying in Trinity, and we found something suitable in a couple of weeks."
The Buyer's Agent also offers a renovation service, and if any of her clients wishes to sell, she refers them to a good local agent rather than risk any conflict of interest. Margaret holds a PSRA licence and is currently completing a degree in property studies at DIT.