Bidding on a new build! Shocking

Akarsh

Hi All,

Recently i came across a property on Auctioneera. This was a new build, but when we went for the viewing, it was mentioned to us that since “this is a private treaty, there will be bidding on it”.

It was strange to us that there will be bidding on a new build. Nevertheless, we put our bid and to our surprise/disappointment then price of the property increased by +150,000!

Do you guys think this is common in Ireland? Is this new way to loot the common public? Will all the builders start doing this for new builds?

Can we challenge this somewhere? Complain? Etc.

Appreciate any inputs on this.

Akarsh

Go to auctioneera’s website and go to new homes to see the reference.

PommieBast

I'm surprised a new build would end up on the likes of Auctioneera at all. Need to check main accommodation thread but lot of new builds are bought off-plan and never reach the open market.

Former Former Former

Short answer is this uncommon but is perfectly legal and no way to challenge it.

herbalplants

https://www.boards.ie/discussion/comment/120856747#Comment_120856747

I agree. Usually new builds are bought off plan.

All I can think is someone bought this property but didn't live in it and now selling?

herbalplants

https://www.boards.ie/discussion/2058305228/bidding-on-a-new-build-shocking

https://www.auctioneera.ie/property/7-glenamuck-road-carrickmines-dublin

Is

I this the property? Unusual to be in a bidding war. As you notice, they are only selling no 7. They are not selling the whole estate.

PommieBast

https://www.boards.ie/discussion/comment/120856919#Comment_120856919

Is there any legal definition of "new build"? Plausible explanation there but in that case using the term is a bit improper..

Akarsh

yes this one, and they are selling other properties as well 7a, 7b, 6a and so on.

J_1980

This house was quite underpriced to begin with.

The current tight market means that auctioneers will seek bids on anything they have to offer. It's my experience that many properties are currently going for 1/4 more than their asking price. It's their job to get their client the best price possible.

pat_sconce

https://www.boards.ie/discussion/comment/120857248#Comment_120857248

No survey shows this and it is extremely easy to check the eventual selling price on property price register.

You will of course find a few where it has either been under priced or it is in a specific location that two bidders want.

On the property here, 7 is probably 70% new build, then the others are full newbuilds. All seem to be different sizes, hence the open bidding (it's NOT an auction) format.

https://www.boards.ie/discussion/comment/120857276#Comment_120857276

Outside of the Dublin area prices are still going up and reaching prices far ahead of the initial offer. I was looking for the first half of the year and nothing was going for the initial offer, often thing were reaching 1/3 more. Things maybe slowing now because people are getting twitchy looking at Dublin, but there is a brutal shortage of supply out in the country which is keeping prices high. Most of what's coming to market are ex-rentals.

https://www.boards.ie/discussion/comment/120857237#Comment_120857237

Certainly appears that way. It would be hugely risky for a developer to wait until completed and then sell like this, like others, I suspect an investor bought a few off plans and is now flipping them.

pat_sconce

https://www.boards.ie/discussion/comment/120857334#Comment_120857334

Again, in some cases of one off homes in rural locations it is difficult to price something

But in towns, prices have been steady and most sales are very close to the original asking price.

Again, property price register will show you this.

I keep an eye on Naas, Newbridge and Kildare Town, also cahir and clonmel. Almost every property I've looked at has sold very close to the asking price, some sold below.

Very easy to cross check on PPR.

herbalplants

It is probably due to the big garden /side lane that it achieved that price.

Homer

This is just a slightly more transparent way of purchasing a property .. you can see the bids online via the platform rather than the more traditional way of you making an offer on a property via an estate agent over the phone for example and then they call you to inform you there is a higher offer? Don’t understand the confusion?

Akarsh

Maybe its more transparent, but it is also open to manipulation.

That being said, the ‘confusion’ is why bidding on the new build in the first place? If it is underpriced then it should have the guide price as the what you suggest. 750,000 for a 120 meter square property.

Akarsh

I don’t agree that it was underpriced.

https://www.boards.ie/discussion/comment/120857856#Comment_120857856

Have similar properties sold for the advertised guide price? €150k over guide suggests you are wrong.

Homer

https://www.boards.ie/discussion/comment/120857852#Comment_120857852

How is it open to manipulation? In theory, in order to bid you need to provide proof of funds and register on their site I presume with your details. No different to calling an estate agent providing proof of funds and bidding on a property? I think this should be less open to the theory people have of EA making up bids to drive up prices? Hard to know either way I guess

Akarsh

Because when i posted my bid, i did not give any proof of funds. i was asked to give this later. You can just make your account there and bid. It doesn’t stop you from bidding if you don’t have any proof of funds uploaded.

so, technically i could have driven up the price and then back out and the person before me has to pay.

Akarsh

Yes, they usually stay at the guided price or go up by 10-20K.

scwazrh

It’s had a registered tenancy in the last 24 months so it’s not still classed as a new build.Also 1st sold in 2021 so don’t know where your getting new build from?

Homer

https://www.boards.ie/discussion/comment/120858043#Comment_120858043

Well that’s a load of balls. Amy wonder they have a bad name in the business. Surely it should be the other way round, so in order to bid you need to have verified proof of funds?

Akarsh

Hi Scwazrh,

As you know there are different solicitor charges for new vs old build right?

after discussion withe auctioneer team and my solicitor, i was told the charges will be of a “new build”. I hope that makes sense.

and its not just about the property 7, if you look at 7a, 6a, these are completely new build and they have bidding as well.

my point is, bidding on new property may not be illegal, but it sure is unfair. This is my opinion not a fact.

thanks

Akarsh

Yes Homer, You don’t need to give POF before bidding. This is my point, so it is vulnerable to manipulation.

herbalplants

https://www.boards.ie/discussion/comment/120858043#Comment_120858043

This exactly situation has been happening with the traditional estate agents too. People ramping up the price of a property, going sale agreed then pulling out.

C3PO

https://www.boards.ie/discussion/comment/120857237#Comment_120857237

I agree - I saw it when it came onto the market and reckoned it was too cheap! Why should a new build not be sold like any other house?

I really don’t understand your outrage OP! The house was clearly underpriced and has now reached its market value! That’s the way the system works. And I’m speaking from personal experience - I have been outbid on numerous properties over the last nine months!

https://www.boards.ie/discussion/comment/120858271#Comment_120858271

What's unfair about it? Conveyancing charges are the same by the way

scwazrh

https://www.boards.ie/discussion/comment/120858271#Comment_120858271

You are complaining in your post that there is bidding going on for a new build which is incorrect .There is bidding going on here for a 2nd hand property.Regardless of how your solicitor may be describing their fees , the facts are this house has been sold before and is a pre owned property. This house has been sold 2 years ago and has had a registered tenancy in it .It is being sold in the most common way for pre owned properties.

https://www.boards.ie/discussion/comment/120858271#Comment_120858271

There are?

Never experienced different prices for new v second hand, it’s either a set fee or percentage of price.

herbalplants

https://www.boards.ie/discussion/comment/120860653#Comment_120860653

Very true. Same price.

https://www.boards.ie/discussion/comment/120860653#Comment_120860653

There can be it depends on the solicitor you use. There is generally less work required from the solicitor for a new builds vs 2nd hand properties. My solicitor charges slightly less but its not a huge saving.

Akarsh

Scwacrh,

okay i take your point and remove the 7 number house from my point.

But, you mean the other 3 houses which were constructed 7a, 7b, 6a; completely new are also old builds?

they also have bidding on it. I mentioned this above as well. I don’t understand the confusion?

Akarsh

Quote given on the same property. Only difference is new vs old.

herbalplants

https://www.boards.ie/discussion/comment/120869248#Comment_120869248

I think the answer is anything goes when we are talking about purchasing Property in Ireland. They can charge anything they like because they know they get the interested parties. I also agree there should be no bidding if it is a new build, no matter what excuses come up on this site that it was underpriced. Nothing is underpriced in Dublin.

astrofool

https://www.boards.ie/discussion/comment/120869248#Comment_120869248

The difference is the professional fees and stamp duty, as this is a second hand house, you may end up paying the second hand fees anyway. You're also free to negotiate the fees.

Stamp duty will be the legally applied amount and will depend on whether the buyer pays VAT on the second hand property (unlikely but I don't know if there was some rental then sell VAT deferral process that the government ran).

You seem to be arguing semantics, it is a second hand house and sold as such, all new builds could be sold by such a process if desired (they're not as the builder usually needs the guaranteed income to fund the build).

C3PO

I still don’t understand the argument that there should be no bidding on a new house? On what logic? Typically new houses have been sold at a set price because they are part of an estate of similar houses but there is no rule that states that it has to be that way!

Former Former Former

https://www.boards.ie/discussion/comment/120872090#Comment_120872090

Yeah exactly.

And usually a set price applies when there are dozens of units for sale. How would you even decide who gets the single new house at the set price?

The J Stands for Jay

https://www.boards.ie/discussion/comment/120872090#Comment_120872090

I've always wondered why new builds weren't sold like other houses. Always seemed strange that the builders would t try to maximise their income.

https://www.boards.ie/discussion/comment/120873332#Comment_120873332

It’s usually because they are sold in phases where each phase finances the next. By placing a set price on the initial phase, and each phase thereafter, developers can quickly get money in, and gauge demand before setting price for next phase. If each unit was sold separately by bidding, it would take longer, involve more risk that disaffected higher bidders would pull out, if they saw similar houses selling for less than they bid, bidding would make selling off plan more difficult, and lastly, the market might set a lower price per unit with bids than the price the developer wants to sell them for. There are probably a lot more reasons to do with finance projections, conveyance and auctioneers fees etc that make bidding on each unit less attractive to the developer.