Property in Ireland is sold by auction, tender or private treaty. An estate agent can guide you through all three methods of sale, discussing the pros and cons of each. There are cultural factors here as in some parts of the county different selling methods are more widespread and popular than others.

Auction, where a price is set at a particular level, referred to as the guide price and interested parties are invited to place bids on the property at a specific time and day; when the auction is held.

In the lead-up to an auction, the property will be marketed and viewed for a specific period. When the auction concludes, assuming the highest bid has met the reserve, which is the minimum price that the vendor is willing to accept, the purchaser is legally bound to sign contracts committing them to complete a sale.

For this to happen, contracts are made available during the marketing period. Prior to the auction, the successful bidder must be satisfied with the contract and have completed a survey to ensure they are satisfied with the condition of the property.

A solicitor will need to review the contract and a surveyor will need to be engaged to survey the property. The property should have a clean title and any qualifications on the title should be made clear.

Auctions are carried out in the below circumstances:

• Strategic value; a good example is a slice of development land that is needed to complete a large development.
• Strong demand; is the main ingredient for a successful auction. Provided that the property is likely to attract strong interest, the competitive nature of an auction can drive up the price.
• Uniqueness; an unusual property or lack of comparable evidence can make some properties hard to value. Auctions are generally considered the purest method to determine market value.
• Certainty; if a property needs to be sold regardless of the price, a successful auction will provide the vendor with the certainty that the sale will be complete. This is common in bank sales or estate sales.

Up until recently auctions used to take place in auction rooms by auctioneers. Now many auctions take place online on bidding platforms. The main characteristics are the same; the buyer must be present at a particular day and time and they must be ready to sign contracts on the day.

There is a lot to like about auctions, they capitalise on people’s competitive nature and they give the vendor certainty. However they are restrictive and unless some or all of the above characteristics are met, then the result can be underwhelming.

Tender; where a price is set at a particular level and prospective buyers submit sealed bids by a certain deadline. Like with an auction, there is a marketing period when the property is open for viewing.

Tenders are generally used in commercial sales, where there are specific tender documents and tender rules. Solicitors are heavily involved and offers can be binding on acceptance.

Tenders are most effective where strategic value exists. All offers are submitted in a sealed format and bidders are unaware of what other bidders are offering.

To ensure a purchaser secures an asset they will have to submit an offer higher than they think anyone else will offer. This can have a profound effect on the price.

This method is rarely used in residential sales as done properly adds a lot of cost and complexity which can be off-putting for both buyers and sellers. A diluted version is sometimes used, which is non-binding by its nature but can still result in surprisingly high sale prices.

Sealed bids in these circumstances, will still need the below information:

• Offer amount
• Proof of funds
• Type of funding
  • Mortgage
  • Cash
• Subject to survey
• Subject to sell
• Proof of ID
• Proof of address

Unlike an auction, the vendor isn’t obliged to accept the highest offer. They can analyse all of the offers and may not accept the highest one. In our experience purchasers do not like this method due to its lack of transparency.

Private Treaty, there are no fixed rules other than the basic ones set down by the PRSA.

The PRSA will insist that all offers are recorded and made available if required. In addition, Anti-Money Laundering (AML) requirements are in place and to fulfil these the agent needs to be supplied with proof of ID and proof of address for anyone making an offer.

In a private treaty sale, a property is placed on the market and the agents’ job is to represent the vendor in the sales process, by whatever means they see fit.

This method is non-binding and the vendor can accept any offer for any reason and withdraw from the sale right up until they sign contracts. Purchasers are afforded the same flexibility; their offers are non-binding and they too can pull out of a potential sale right up to the signing of contracts.

Properties sold in this manner do not need the same level of marketing as an auction or tender and often solicitors aren’t engaged until a sale is provisionally agreed.

During the sale, various methods can be employed and indeed the method of sale can change during the sales process. Often bids are made with the agent encouraging counter bids, effectively creating an auction without the formality.

Sometimes this can go on until the agents decide that sealed bids should be submitted, which is referred to as best and final offers. What we see here has both the characteristics of an auction and a tender. The agent is entitled to adopt whatever method or methods he or she sees fit in order to achieve the highest possible price.

The vast majority of residential sales in Dublin are completed using the Private Treaty method as it is the easiest, most flexible and most cost-effective method.

However, it does come with drawbacks and can be the cause of a lot of frustration. Firstly the agent isn’t required to conduct a sale with any fixed rules and even if a property is sale agreed higher offers can still be accepted any time up until contracts are signed.

Secondly, vendors and purchasers can pull out right up to the signing of contracts.

Despite these drawbacks, if agents are serious about representing their clients and conducting the sale in a fair, open and transparent fashion then we believe that a private treaty is the most effective way to sell second-hand residential property in Dublin.

Agents can’t control the actions of buyers and sellers and this forms part of the journey when buying a residential property in Dublin.