36 Belgrave Square Monkstown AUCTION 3.25m

I am not in Real Estate but work in an industry that involves auctions of all types - phone, internet, physical, sealed bids etc. Minimum lot size is about 20m but can go way higher than that. Being doing for over 7 years now (sigh).

One of our senior people asked me to attend an auction of a luxury house in Dublin a few months ago by [mod redacted] property agents. They also had their own local agent also at the auction, but was interested in getting my view as well.

The house in question was 36 Belgrave Square Monkstown Co. Dublin which was profiled in the Irish Times for 3.25m.

irishtimes.com/life-and-sty … -1.2999618

According the local agent, it was one of the best luxury houses to come to market in Dublin for a while - beautiful period, huge size, newly renovated, south facing garden, gable end, great location. etc etc. He also said that it was also the first auction of a luxury house in Dublin for well over a year (never explained why). I never heard of [mod redacted property agents name] property agents or seen their signs around in Dublin. He said that is was an usual choice of agent for a luxury house sale.

The only bidder in the room was another property agent bidding on behalf of a client. This property agent specializes in luxury Dublin houses. The local agent said that the client in question was one of two possibilities, neither of which was a local Irish buyer. According to the local agent, the rest of the room were other agents, neighbors and some local buyers, none of whom are bidding on 3m houses (he knows most luxury buyers in the market at any time).

I was surprised there were no local buyers. Shows how severe the crisis was on Irish upper wealth. The agent said that from 2012 to 2015 it used to be about half locals and half foreign (or returning Irish). He said that since 2016, it is almost all foreign (or returning Irish) above 2.75m. He said that this was pretty well known in the market (no new news here)?

I expected the luxury property agent to do well therefore on behalf of his client and he opened up with a bid of 2.8m (sensible). There was a minutes pause before a voice was introduced from the far side of the room. There was a telephone bidder. The telephone bidder was speaking via a [mod redacted property agent’s name] agent.

Telephone bid 2.85. Property agent bid 3.00. Telephone bid 3.05. Property agent bid 3.2. Telephone bid 3.25. Property agent bid 3.40. Telephone bid 3.45. Property agent bid 3.60. Telephone bid 3.65. Property agent bid 3.75. Sold.

I felt like I was watching an episode of the series “The Irish RM”, where the locals manage to get the “Major” to bid up for the best village bull. I relayed this to my colleague after who spoke later with their local agent. His agent’s view was:

  1. The bidding property agent in question is one of the biggest agents of luxury houses in Dublin, is highly respected, and would never be involved in anything odd. He can still bid his heart out for his client (what is good for the goose is good for the gander). He had already made a firm bid for the property before it was put to auction.

  2. It was odd that [Mod redacted name of property agent] was chosen as the agent for the auction of a luxury Dublin house. There wasn’t a huge lead time from marketing to auction date, so it was strange that it wasn’t one of the bigger established luxury house agents. Perhaps the fact that they had a firm bid from the bidding property agent (who is from a big luxury house agency) helped.

  3. He was more circumspect on the telephone bidder. He has seen telephone bidders at luxury house sales before however in most cases that he can remember, their lawyer relays the bids (not the selling agent) and can sign there and then. There didn’t seem to be any lawyer in the room associated with the telephone bidder and [mod edit - property agent] said nothing.

There is no auction I have ever attended where someone would be allowed to chip in bids on a phone without a recognized lawyer in the room who can vouch for the provenance of the bidder, and demonstrate their authority to sign if successful. Otherwise any seller could submit their own bids and even if they won, they could claim some issue happened and then approach the known under-bidders (and their highest prices) later. It is auction 101.

Ultimately we left it at that. Our business is large, global, very liquid and very professional (full of lawyers). Maybe we can’t expect a smaller business like occasional sales of Dublin luxury houses to replicate it.

What did stoke our concern again were the e-mails from other Dublin property agents that my colleague received in the next few weeks about this auction. I won’t quote to preserve anonymity. Suffice it to say the auction I attended of a lone luxury Dublin property agent bidding aggressively, on behalf of a client, against an anonymous voice on the phone, was nowhere to be seen. This was a cauldron of bidding and the only surprise is that it didn’t get 4m.

I thought I would put this to thepropertypin community for feedback.

[mod note - I have redacted the property agent’s name if anyone wants it feel free to PM the poster]

If you wait until you’re doing it for 14 years the options for a jump out will be exponentially less than they are now.

I had the good fortune to relish most of what I did for a good 20 years but when Multinational-Corporation took over, the downsides (I had been warned: “prepare for bureaucracy / don’t make waves / they don’t get to be big by being nice guys”) amplified the lurking boredom and resulted in my baling out.

It pains me to suppose there are multitudes out there in traffic jams heading towards jobs that they cannot stand.

I’m not sure what the problem is: I’ve been to a good number of property auctions (partaker). There was no vetting of the bidders at those auctions that I can tell. In one (which racked out at 2.2 mil) the bidder (winning bidder as it happens and a pal of mine) had done nothing more than appear at viewings and talk of the property he was going to be disposing of.

One could say that the value of an asset rests solely on the amount a person is willing to pay for it. Nothing has any intrinsic value outside that.

So, take bids off the wall? If someone else thinks the asset has more value then let 'em show so.

welcome back observer35 / davidm / facts / etc etc
dont see what the issue is here…
if anythin the telephone bidder could probable be more vetted than a bidder in the room because they had to arrange it in advance and might have been prevetted before they bid
any joe soap sitting in the room can lash in a bid if they want and whos to know if theyve the money or not !
still no sign of this sale in the property register so perhaps your client didnt have the money to close in the end either [light hearted joke]

thanks for that Mod.

Fair point you make re work life (aka the “sunscreen song”). My job can be intense at times and the highs almost all financial. Our industry cycle is very late stage now. It takes about 3 years for the cycles to wash out and another 3 to stabilize so it will be at least another decade before I have a shot at buying a house like the above (double sigh).

2nd reply to a first post an I am being trolled - feels like a night on 4Chan??? Tried to scan the observer35 posts but there are thousands and not all about property ??? Didn’t see the connection - have this group raised similar issues re auctions. I think you have me as a property agent. If I don’t get out the other side of the washout, perhaps I will give it a go!

It is interesting that both of you, who seem like Irish property people, are okay with phantom auction bids (rafter bids as they are known as in my market). In my industry it is not just frowned upon but is fraud. We use a ton of bank financing and insurance u/w. Banks themselves attend most main auctions and will touch base with the winner and a sample of the under bidders. They know where market pricing is at all times as the financing is locked in fast. That day in cases. Do you ever see Irish banks checking Irish property auctions?

You see few auctions now being run anymore by entities who also act as intermediary / commission basis in my industry. Particularly on the electronic auctions where the independence is paramount (all bidders vetted and electronic signature is full execution, all under bidders get confirmation of winner). I’m sure when you add up all Irish property deals per year it runs into many billions. That could justify one main independent 3rd party auction platform through which they would all be processed. Would also help with transparency and discovery of market pricing (vs. biased auctions). What do you think?

Estate agents in possibly being a bit dodgy shocker.

Though, really, I don’t see why it couldn’t be a genuine pre-vetted bidder.

Very anecdotal but in my experience of Auctions in Ireland they seem to be much more transparent than private treaty sales. I have been to 4 and been the winner in 2. In the two that I won, I knew the other bidders and knew that their bids were genuine. I have been fecked around by auctioneers numerous times in private treaty sales.

The only reasoning I can think of the above is that auctioneers think they can bullshit their way through a private treaty process and still easily make the sale. In an auction the risk is too great of an off the wall bid being the highest and thus losing the sale. All IMO!

Had a look at a house over the weekend myself. In my mind it is worth twice the asking price, and no bids at asking price yet. It’s probably my value set is out of kilter with that of the owner and agent. It’s all in what sings to the soul in the end.