'Super Auction' of cut-price homes to woo first-time buyers

Sarah McInerney

Estate agent Re/Max is planning a nationwide 'Super Auction' of cut-price houses in a bid to boost the lagging property market.

Unlike traditional auctions, which tend to focus on the higher end of the property market, the 'Super Auction' is aimed at first-time buyers, with all properties offered for €300,000 or less. Contracts will be signed on the day and closed within a month of the auction.

Currently, Re/Max is planning a pilot 'Super Auction', to be held in Galway on 12 September. If this is successful, the company plans to expand the concept nationwide. The auction is the brainchild of Galway auctioneer Michelle Burke, who believes when buyers see other buyers at the auction it will restore consumer confidence in the market.

"There are a lot of first-time buyers wanting to buy, but they are reluctant to do so because of all the negative hype," she said.

"No one wants to put their toe in the water. People are just scared. And every person seems to think that they are the only buyer in the country at the moment.

"So our plan is to get all the buyers in the same room at a big auction, and physically show people that there are actually other house-buyers out there. We think that should increase confidence, and hopefully increase sales."

Burke said the only criteria for houses being sold at the auction is that they are within a five-mile radius of Galway city, and that they are on the market for €300,000 or less.

"Our database of buyers are very excited, as the homes that are chosen are in fact priced to sell," she said. "Some of the houses on offer were selling for €330,000 or €340,000 last year, and will be auctioned for €300,000. There will be some great bargains to be had."

Already the 'Super Auction' looks set to be a success, with Re/Max reporting huge interest from both buyers and sellers.

"It's the type of idea that we're always looking for," said regional director of the company Mark Campbell.

"There is no getting away from the fact that the volume of transactions are down considerably, and we need initiatives like this to keep giving the property market a little boost."

Campbell said after the steady decline in the market over the last year, house prices appear to be levelling out somewhat. "There are still buyers out there," he said.

"But what we're finding now is that we'll agree on a deal, the buyer goes to their bank, and the bank is refusing to lend them the money.

"Buyers are coming back to us saying that their banks are encouraging them to negotiate for €30,000 discounts. The market is not easy at the moment."

August 3, 2008

Comments

#1 j utah commented, on August 3, 2008 at 2:58 a.m.:

The gig is up, this is no more than smoke and daggers stuff as our former esteemed leader might say. The bubble has burst....

#2 Bigby commented, on August 3, 2008 at 9:49 a.m.:

what buyer in their right mind would subject themselves to a pressurised selling environment like this where the auctioneers hold all the cards and the crowd could easily be stuffed with ringers?

#3 bernard, commented, on August 3, 2008 at 1:31 p.m.:

The Galway estate agent will need to knock a lot more that ?30,000 off a ?330,000 house if he intends to do business. I think ?100,000 would be a lot nearer the mark!

#4 very suspect commented, on August 3, 2008 at 4:15 p.m.:

This has the look of the pressure cooker sales techniques so often seen at the 'holiday home in the sun' exhibitions and without the 'cooling-off' period with the binding contracts signed on the day.

#5 Declan commented, on August 5, 2008 at 11:44 a.m.:

The reality is that we are now back to the fundamental of yield. Based on realistically achieveable rent and a 6-7% yield, easily obtainable in major developing cities in Eastern Europe, the majority of these 3-bed semi-d type properties are only worth €150-180K to the Investor. If the Investor is only willing to buy at this level, why should the owner occupier pay more? As in Spain in 2006/2007, we will see about 50% of Auctioneers in Ireland cease trading or going into receivership by the end of 2009.

#6 sarah commented, on August 5, 2008 at 5:13 p.m.:

how do remax have the authority to cut the prices of their houses? I feel sorry for the vendors. this is a typical gimmick by dishonest auctioneers to try and boost sagging fees.

#7 Brian D commented, on August 6, 2008 at 10:57 a.m.:

The sooner we hit the bottom the better. Remax have tried several techniques taken from their American colleagues, none of which appear to work. An earlier blog mentioned they need to reduce their prices further and I would tend to agree. I would expect this to be a complete washout and I would even suspect the buzz from people on their database is fictional to gather momentum for this press release.
I would assume Remax have the authority of their clients to sell at a given price and no lower, however this I can only see as totally above board in favour of the seller. Again, the sooner prices bottom out the better and this will take much longer until sellers realise their house is not worth the big price they think and they should be as realistic when selling as they will be when buying

Comments

Comments closed

Share this article

Search

This issue 5 years ago

RSS Feeds