By | August 5, 2005

Today’s IT front page reports that the government is being asked to regulate auctioneers – a popular enemy. Since people hate paying huge money for houses they choose to blame the estate agents. A bit like people complaining about the CAO for high points even though its the students themselves who achieve the points. Anyway, as the family are auctioneers I feel duty bound to defend their profession.

Firstly there is the thorny issue of gazumping whereby a sale is agreed and the seller gets a higher price from someone else. Please note that it is the SELLER who accepts the higher price. If estate agents are so universally immoral why don’t the sellers refuse to accept the higher price and stick by their verbal agreement with the original buyer.

Secondly guide prices. Just last week my brother was selling a beat up old cottage in a nice area. Given that it will have to be completely refurbished he guided it at about €260k. There was a surprising amount of of interest in the auction and the week beforehand they increased the guide to €300k. The day before the auction I heard one of the auctioneers on the phone to an interested party who was looking for a specific figure. The auctioneer suggested that since big stamp duty kicks in at €317k that this would surely have to be a cut off point for a lot of prospective buyers. On the day, it went for €360. The staff couldn’t believe it and firmly believe that the buyers were all stone mad. But what can they do? I suppose critics would say that the auctioneers should predict the complete irrationality of some people when it comes to buying a house. Rationally, no one should have paid over the guide but on the day they all lost the head. How can you regulate this?

Finally, people assume that auctioneers are simply wafflers. I have always been amazed by the wisdom and cop-on that de family try to pass on to sellers. Their principle skill is in identifying early on so-called buyers who are complete time wasters and who are telling a heap of lies about their ability to pay for a house. Some buyers will claim that the sale of their own house is agreed and they have the funds to buy the next one. My sister in particular is a genius for seeing through the crap and advising sellers to sell to a lower bidder that has funds in place instead of hanging on for months waiting on money that will never appear from a big mouth.

There is nothing to stop anyone selling their house through the classifieds but they don’t do it because they want to expose their house to the biggest market possible through the auctioneers. If there is a screw up properly accredited auctioneers have public liability and everyone can sue.