Transparency of residential property prices

Following the National Consumer Agency's decision to involve itself in the disagreement between the Irish Times and certain estate agents, Geroge Hook yesterday had a discussion on his radio show with Pat Stephenson, director of Norths Property and Alan Ahern, economist from NUI Galway.

Ahern was quick to blame the industry for trying to 'talk-up' the property market. He added that the shortfall of the Irish property market is that the consumer must turn to the untrustworthy industry for any statistical information

Pat Stephenson advised that many agents, such as Norths, strictly abide by the privacy understood within private treaty sales and don't disclose any figures whatsoever. He also said that the level of inaccurate information was not an industry problem, but rather a problem of regulation, which he hoped the forthcoming auctioneers bill might go some way towards solving.

This morning, Ann Fitzgerald of the National Consumer Agency (NCA) was on Morning Ireland's business news. She argued that the reporting of inaccurate information on the prices paid for houses was illegal and created a "false market", against the interests of the consumer. She suggested that future breaches would see the NCA initiate legal proceedings under consumer protection legislation against the individual agency misreporting. She said it was critical that there be "a clear and transparent market".

Is there a necessary change underway in the Irish property market?

Have your say! Vote in our poll to the right! Should we have full transparency in the residential property industry?

National be nice to estate agents day: did you catch it?

In this Guardian blog from February, we can learn a lot from the (uncensored, you are warned!) comments at the end about what people think of estate agents ...

"Even the most cynical among us can surely spare a thought for that much-maligned individual the estate agent, writes Susan Smillie.

These property professionals are apparently so unloved that one of their number, Alan Howick, from Essex, has felt the need to designate today "national be nice to estate agents day" (NBNTEAD)."

Sold: new UTV series on estate agents

Sold is a new drama on UTV about estate agents.

It hasn't been very well reviewed, but the reviews have generated some interesting perspectives on estate agents:

http://www.telegraph.co.uk/arts/main.jhtml?xml=/arts/2007/11/16/nosplit/bvtv16last.xml

http://blogs.guardian.co.uk/tv/2007/11/i_wasnt_sold_on_sold.html

http://teevieo.com/not-sold-on-itvs-new-show/

New regulatory environment

We understand that the Minister for Justice will be announcing the new Code of Practice for Property Services Providers tomorrow. We hunted around a bit online and discovered that the NPSRA has their website live: www.npsra.ie

You can download the new code here: CLICK TO DOWNLOAD >>>

The new regulatory environment.

The new legislation shall apply to the regulation of property services providers. These are persons involved either as corporate bodies, partnerships, sole traders or employees in:

• The purchase or sale, by whatever means, of any estate or interest in land (including buildings) wherever situated;
• The auction of private property other than land;
• The letting of any estate or interest in land wherever situated;
• The provision of property management services.

Thus Auctioneers, Estate Agents, Letting Agents and Property Management Agents will be regulated by the Authority. This will apply not only to property located in the Republic of Ireland, but also to transactions in Ireland which relate to property located abroad.

Regulation not only includes a licensing requirement, but also scrutiny by the Authority during the course of complaint investigations, audits or general inspections. The Authority will have power to sanction a licensee up to and including the suspension or revocation of a licence. Where it considers it necessary, the Authority may bring a prosecution against a licensee which may result in either a large fine or imprisonment or both. Where a person suffers a loss due to the dishonesty of a licensee the Authority may award compensation from the “Compensation Fund” which it will be required by law to maintain. All licensees will be required to pay into the Compensation Fund.

2 new services: TELL THE WORLD!

Property Week has launched two new services recently ...

1. Developer.IE

has been set up to hold in one place information of particular interest to property developers, especially:

• Development land on the market
• Development projects going on
• Profiles of property development companies

The most important feature of the site is a Development Land Interactive Map that enables developers to see at a glance the location & summary information of particular sites and then click for more information/the brochure if interested.

2. JobsinProperty.ie

is a simple site aimed at giving property companies a chance to target the precise audience they need to in their recruitment drives. Contact Paul on paul@propertyweek.ie to place your free* ads & notices.

Free to subscribers of PropertyWeek until end February 2008; free to all property companies who register with us until end January 2008.

"Uneducated opportunists" please remove yourselves

Asked recently by Irish Construction,What do you think are the main challenges facing your sector in the future?

Alan Cooke of the IAVI had this to say:

"For properly educated estate agents to seize the opportunity and recover ground lost to uneducated opportunists who entered the business to take advantage of the State's heretofore lax approach to the need for estate agents to study law, valuation methodology, town planning, building construction etc.

This, coupled with the fact that most uneducated estate agents have never experienced a difficult market, presents an ideal opportunity to those for whom real estate was always a first choice career, for which they secured relevant third level qualifications, to effectively reclaim the market."

We just hope he didn't actually say that out loud, cause it's quite a mouthful.

Said the agent to the developer ...

The mighty Quinn

This image reflects one of the most bizarre phenomena of the Irish property market: that some agents do not include the asking price of the properties they are selling on behalf of their clients in the advertising that those same clients ultimately pay for.

I find it hard to believe that some agents don't record other details of properties: floor area, year of construction, size of plot etc. But PRICE, the damn price they are seeking - how can it be that they wouldn't advertise that? If I'm searching in a particular price range, how am I to know they have properties that match?

What do the clients think? Well, if John Quinn's success in Galway is anything to go by - they are not too bothered. This agent lists about 15% of the properties coming on the market in Galway city, and yet doesn't include prices in either his advertising in the Advertiser or on his website. (He does allow you to search in large price brackets, but is this sufficient?) One of his tag lines on the site is: Galway's New Generation of Estate Agents. Aaaagh!

We're trying to encourage transparency in the market, most recently introducing a way for agents to exchange information on private treaty results, and yet this is what we are up against.

How much do you earn per hour?

Did you know that senior counsel at the planning tribunal earn €2,250 a day and juniors €1,500. That’s around €280 per hour for senior and €190 for junior.

Now, here’s an exercise for you if you're an estate agent: Divide the fee your company got for the last property sale you achieved by the total number of hours spent by different people in the company on bringing about that sale (starting from the day the instruction was won).

So, did you manage to make anywhere near, say, €100 per hour, or was it more like €8.30 (the minimum wage rate)? Perhaps you don’t know how many hours were spent on the sale of that property, and of couse it varies considerably from property to property (and vendor to vendor, more revealingly!). It’s something agents should keep records on – a job diary for each property that vendors could see and from which they would maybe begin to understand for the first time the many, varied and time-consuming tasks that are required to sell a property properly.

And wouldn’t it be interesting to perform this on a macro level – that is, that a number of property firms would perform this analysis on a large enough scale to produce a report that reveals how much on average estate agents are making per hour selling client properties.

This could be an important part of the so-badly-needed public awareness campaign on the work of estate agents.

Of course, most would agree the average rate should not be equal to that of barristers at tribunals or consultants in operating theatres. But the (somewhat less arduous) training, the inate skills, the considerable experience and the specialist knowledge that a good estate agent offers vendors access to, is certainly worth equal to the rates charged by other business professionals offering similar levels of service.

Anyway, something agents might discuss at the IAVI get-together this weekend perhaps?