A HOMEOWNER IS trying to break the property market deadlock by selling his house to the lowest bidder.
Rob Reynolds owns this five-bedroom, four-bathroom house in Mullingar, Co Westmeath. He now lives in Germany with his wife and told TheJournal.ie yesterday evening that the economic circumstances in Ireland at the moment have forced him to find a novel way to shift the property.
The house is featured on a new website Cabinbee.com, operated by property agents and auctioneers James B McDonnell & Co., which asks would-be bidders to pay €50 in order to submit a bid for a property. However, the winning bid will be the lowest unique bid. (For example, you can bid 1c if you like but if someone else also bids 1c, then the bid is not unique). Bidders are advised not to bid over €500. The winning bid is announced once 6,000 bids have been received to the site.
Basic calculations would suggest that the process should pull in a gross total of €300,000 (€50 application fee x 6,000 bids) although Reynolds said it wasn’t yet clear how much he would actually get into his hand after auctioneer, legal and agent fees were deducted from that. David McDonnell of James B McDonnell & Co. said that Reynolds would still end up with over €200,000. The valuation of the property on the site is €165,000.
Reynolds told TheJournal.ie:
My reason for trying to sell my house in this manner is mainly due to economic circumstances in Ireland at the moment. Credit is virtually impossible to get so a solution was needed to be able to sell the property without the need for bank financing, ie, so the buyer does not need a mortgage. The one thing we have learned from the guys who run the distressed property auctions is that there is still a strong appetite among Irish people for property. The biggest issue is getting a mortgage from the banks and we think we have the solution for this.
He said that the house had already received bids despite the Cabinbee.com website just going live this week. Reynolds had thought of selling the house himself over the internet but decided that it would be too risky and asked James B McDonnell & Co to step in. He said: “They are bonded which means that the money they hold is insured. That way bidders can be assured that their money is in safe and trustworthy hands.”
The estate agent/auctioneer company liked the idea so much that they set up Cabinbee.com in the hope that Reynolds’s house will not be the only property they can sell in this way.
David McDonnell of James B McDonnell & Co. said that the idea had been brought to them by Reynolds. “It does work,” said McDonnell, “It has worked in Europe and we have to try it. Certainly it would make getting a house very affordable for one lucky person. I had heard of it before and Rob would have seen it in Germany quite a bit so we did our research and we’ve had a good bit of interest although this is the first real exposure that we’re getting.”
Properties currently languish on the market for an average of a year before a sale is made – McDonnell hopes that the Reynolds house could be sold within three to four months. He said that finances are obviously the “biggest concern in offloading property” at the moment and that unless they are “priced very attractively”, it can be a waiting game.
He reiterated that the auction process was being overseen by a solicitor. Reynolds also explained: “At the end of the auction, when enough bids have been received, James B McDonnell & Co. auctioneers will review the list of bidders to determine the lowest unique bidder. The bidding process is sealed until the auction ends.” Even Reynolds himself will not know what the winning bid is until the auction is over and the result verified.
While Reynolds’s house is the first to be featured on Cabinbee.com, McDonnell is optimistic that there will soon be more properties on the site. “I have had one enquiry today,” he said, “and it does seem to be generating interest. Essentially, the site opens your market from the provincial to the national.”