Monday, February 21, 2011

Up to 80 properties set for 'fast auction' - The Irish Times - Sat, Feb 19, 2011

MARK HENNESSY, London Editor

A BRITISH auctioneer long practised in selling properties held by banks, receivers and homeowners needing to sell quickly will hold the first of a series of sales in Dublin in April, where up to 80 properties are to go under the hammer.

The Shelbourne Hotel auction in mid-April is being organised by Dublin estate agent Stephen McCarthy of Space4U, in alliance with Allsop, one of the largest auction houses in Britain.

Realistic reserves “lower than 50 per cent from peak” will be set, said Mr McCarthy.

He said his clients wanted fast sales. “They want certainty, they want to be paid in 30 days and for that they are prepared to offer a price to interest.”

Gary Murphy of Allsop said: “In Ireland we will state that the reserve will not exceed a particular figure. It might be lower, so it is a very clear message: if you get to that figure and nobody outbids you it will be sold to you.”

Just three of the properties have been listed by homeowners themselves. The rest are already being handled by receivers: “The majority of our properties are in receivership. Receiverships have been taking place for two or three years now in Ireland.

“I felt that something needed to happen to create a market where people felt comfortable that they were having an opportunity to buy assets from receivers and banks in an open environment, which I don’t believe has been offered before in Ireland,” said Mr McCarthy.

A full catalogue will be available from early March.

There are properties confirmed for the sale from Dublin, Cork, Galway and Limerick.

Half of the total have tenants in place, but the rest are ready for occupation.

Potential buyers will be able to download all of the documentation from the companies’ websites, inspect properties and carry out any necessary engineers’ reports before the auction, said Mr McCarthy.

Questioned about the views of other auctioneers, Mr McCarthy said: “Nobody is knocking on the door saying that this is great news for the auctioneering business. It has never been done before so people are fearful about it.”

However, he argued that the auction would benefit the property trade by establishing a floor from which people can build.

“There are a lot of people sitting on the sidelines waiting for the bottom.

“Deep down, they want to see what the real number is. People really want to know where that floor is. If I was the other auctioneer I would think that this would help me persuade my client to be more realistic, to find out where the market really is,” he said.

The numbers of properties being put on the market by receivers and “distressed sellers” is increasing in Ireland and Britain, said Mr Murphy. “It is so transparent. They like to be seen to get the best possible price; they have a duty to do so.”

However, a successful auction will not spur banks into repossessing more homes from struggling mortgage-holders, argued Mr Murphy, who said repossessions are “politically sensitive” on both sides of the Irish Sea.

Mr McCarthy said: “There have been very few in Ireland. It seems to be that the banks are very keen not to take property, but people are letting properties go and emigrating. People are walking away leaving the jangling keys.

“There is no getting away from the fact that if the property is distressed then a receiver is involved. We didn’t set this up to get everybody’s house repossessed. We are dealing with properties that are in the banks’ or the receivers’ [hands].”

Planning for the auction began a year ago, though Mr McCarthy has revised his original view that the majority would be bought by owner-occupiers. The lack of finance means, he believes, that sales will be predominately to investors.

“Banks are struggling to lend because they don’t know what value to lend on. Valuation in Ireland is a difficult thing to get a hold on.

“This will give comfort to people. They will know that there is a market in certain areas at a certain price.

“I actually think it is a solution, more than a problem.”

If properly implemented, this will show the "true" current value of proeprty in Ireland. A lot of people may get a shock!
Fasten your seatbelts.

Posted via email from quirkeproperty's posterous

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