Auctioneers accused of misleading housebuyers

AUCTIONEERS were accused yesterday of mistreating vulnerable housebuyers by enticing them into showrooms with unrealistically low guide prices.

Senator Shane Ross said consumers had been abused by auctions for years and he welcomed the Government’s decision to review how the industry operated.

“Auctioneers consistently get the selling price of a house wrong - on the cheap side. They entice people with low guide prices in order to get them into the showrooms. They suck in vulnerable buyers to make them think they can buy a house, get a mortgage, pay for a survey and then they find the price goes away from them.”

Speaking on Morning Ireland, he said: “Either they have no idea about prices or they are deliberately misleading the consumer.”

Mr Ross also objected to forcing buyers to pay surveyors’ fees, pointing out that many people find they have to pay a succession of fees for no benefit.

“It costs about €400 for a survey. Buyers have to pay for that and then find they are outbid after being misled on price. The seller should produce the surveyor’s report and let the final buyer pay for that.”

Director of Consumer Affairs, Carmel Foley, accused auctioneers and estate agents of earning “huge fees” out of proportion with the amount of work done for clients.

The biggest grievance of buyers with the industry was inaccurate guide prices, she said.

Inflation in house prices meant agents, who charge a percentage of the sale price, were earning unjustifiably large sums, she said.

“Fees should be based on an estimate of the amount of work needed or by the hour, or type of transaction. If a house sells for e10 million as opposed to e1m, why should they get 10 times the amount of money? Don’t tell me they’ve done 10 times the work.”

The Office of the Director of Consumer Affairs is represented in the new working group set up by Minister for Justice Michael McDowell to review practice and regulation within the auctioneering industry.

However, Alan Cooke, chief executive of the Irish Auctioneers and Valuers Institute, said high prices were not his members’ fault. “Agents are legally bound to get the best price for their clients,” he said.

“Certain groups would ask auctioneers to go against the interests of their clients. I’m not saying changes aren’t needed, but we can’t look at it in isolation from the law.”

Nice little earners:

Properties making over €1 million at auction in Dublin more than doubled during the first five months of 2004. In suburbs such as Ranelagh, Clonskeagh and Mount Merrion, sales for over €1 million are becoming commonplace.

Redcourt, Clontarf: €7.8m

Estimated fees: €100,000

Adelaide Hs, Glenageary: €4m

Estimated fees: €75,000 Loughmoe, Dalkey: €2.3m

Estimated fees: €50,000 Albany Rd, Ranelagh: €1.5m

Estimated fees: €30,000

The Rise, Mt Merrion: €1.46m

Estimated fees: €28,000

Raglan Lane, Ballsbridge: €1.3m

Estimated fees: €26,000.