Plans by the Government to investigate the estate agency business in Ireland were welcomed yesterday by the president of the Irish Auctioneers and Valuers Institute.
Mr Aidan O'Hogan who is chairman of HOK, one of the top Dublin commercial and residential agencies, said the commission, which is likely to sit for a year, will be "the best thing that has happened to the estate agency business."
Chaired by Mr Alan McCarthy, the commission will examine estate agency practices, and is expected to recommend guidelines for setting up new estate agencies. It will also deal with the issue of selling properties by tender, private treaty and auction. However, the most topical issue to be reviewed deals with guide prices issued by estate agents prior to auction.
Guide prices - which are expected to give an indication of the final selling price of an auction property - have come under the spotlight in recent weeks, when Dublin houses in particular have been selling for record prices, leaving underbidders disillusioned with the advice coming from selling agents.
Thursday's sale of a large detached house on Cowper Road in Dublin 6 for €6.275 million - a whopping €3.775 million over the auctioneer's guide price - has intensified the debate about misleading guides.
The price, achieved by Lisney, is likely to be pinpointed by critics of the industry who want to compel estate agents to issue more realistic information to potential buyers. Lisney's €2.5 million guide for the redbrick house took many people by surprise since the same agency sold a similar house on nearby Temple Gardens last year for around €5 million.
Despite the unease about guide prices, Mr O'Hogan says he does not anticipate that the new commission will be able to make any impact because of the dangers of interfering with the auction process. The agent's prime responsibility is to the vendor, rather than the purchaser, he points out.
