Leitrim-based IPAV president comments on report that states open auctions push the prices of houses up

A new report has found that "auction fever" encourages people to overbid, leading to inflated prices.

The report by the Economic and Social Research Institute (ESRI) stated that bidding systems that involved open competition led to higher prices. 

IPAV President, Fintan McGill, said to the Leitrim Observer. "We have been working on the A Seller's Legal Pack. If you are selling your house by public auction tomorrow, everything is up front and nobody is going to come back to you a week after the auction after paying up €400,000 for a house, and say 'You didn't tell me about the right-of-way down the middle of the driveway.' I can't see why the same thing can't be done regarding private treaty- that all the documentation is upfront."

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The study was funded by the Competition and Consumer Protection Commission (CCPC), which has previously recommended reforms around simplifying and increasing transparency in the conveyancing process including legislating for pre-sale requirements and the full disclosure of information on property platforms.

Simon Barry, director of research, advocacy and international at CCPC said the study reconfirms the need for reform and greater financial literacy.

Mr McGill also stated that people will always pay more for houses in an auction setting and that's not unusual. "If you go to the bank and say 'There is a house up the road and they are asking €300,000, how much can you give me?', you try and get as much as you can for that house. Nobody can control what people want. If they want something, they will buy it. It's common sense. If you go to buy a car and there is a nicer one there with shinier wheels and it's €500 more, you'll do your best to buy it. We all want nicer things and if you want nicer things, you'll pay for it."

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While the majority (63 per cent) of people who previously bought a property in Ireland experienced at least one type of stressful hurdle during the process, the figure rose to over 80 per cent among those who bought in the last three years, with the most common issues relating to delays.