I touched on the subject of some sellers not providing SPDS and Clue Reports before, and I’ve noticed a similar nasty little trend with investors lately.

The Phoenix market is ripe with investor activity and we should be thankful for it as they are providing many benefits while making a profit. They provide rental housing for persons displaced by a short sale or foreclosure and they are purchasing the destroyed and dilapidated homes fixing them up ( fix and flip ) and selling them to new buyers, often first time home buyers with FHA loans for whom the home needs to be in move in condition.

But I also have a grip with them because so often the counter offer from seller investors includes statements like, ‘buyer waives SPDS and Clue Report’

There really is no reason for the seller not to provide these – absolutely no reason. Even if they have owned it for a short time, a month or 3 or 6 they have a history with the home, especially if they were involved with remodeling the property.

Just because a seller does not provide an SPDS report does not let them off the hook, in fact it creates suspicion and bad vibes because it’s only reasonable and considerate to provide these simply documents and lazy not to.

Often this fine point can be negotiated if the seller wants to sell and has not competing offers. If multiple buyers a vying for a property then a buyer may have to consul in the fact that they will not receive these documents.

(SPDS) = Seller Property Disclosure Statement

(Clue Report) = Insurance Claims History

Investors Are Not Off The Hook For Providing SPDS is a post from: Phoenix Market Trends

We’re surrounded by empty houses – so why did council give go-ahead for even more homes?

RESIDENTS in an area of north Dublin awash with empty homes are objecting to plans to build even more new properties.

Homeowners in Brackenwood, Balbriggan, Co Dublin, say there is no need for a new development of 18 units, since they are already flanked by empty homes in surrounding estates.

The developers, Parkway Partnership, were last week granted planning permission for the units, which will be located adjacent to Brackenwood, after they modified their original application.

CRAMMED

But local resident Rose Allen said: “We don’t need any more houses. Who has the money to buy houses now?

“Now we have a developer coming in who wants to build 18 houses and it’s the only green that we have in our estate. They’re all going to be crammed in because the site is no bigger than a football pitch.

“It’s in our own green area. We’ve no field, no trees in the whole estate, this is the only green we have.

“And they’re planning to build a by-road as well which would bring a lot of traffic into the estate.”

Another resident Siobhan Curtis pointed out that there are already idle units in Brackenwood, and a new development would be ludicrous.

“I really feel strongly against this. There are houses empty around us and I really don’t want this to go ahead. I don’t understand it.

“There are idle apartments in Brackenwood.

“We don’t need more houses, ideally we need a playground there or something like that.

“In the estate behind us, we can actually see houses behind it that are idle, and the houses haven’t been finished either.”

However, a spokesperson for Parkway Partnership said that he believed there would be a market for the new housing development which, he added, would be sympathetic to the surrounding area.

“We got the planning permission a couple of years ago, and we’re just varying it now. We’re actually putting in a much more sympathetic plan with less housing units, lower density and lower height.

“We already had permission for 44 duplex apartments on that site, and we’re now looking for 18 houses so it’s a lot more sympathetic. The open space there will be better and the existing road will be better maintained.”

Fingal County Council declined to comment on the issue yesterday.

A spokesperson said: “Fingal County Council does not comment on any individual planning applications… the decision for this application may be appealed to An Bord Pleanala within a four-week period from the date of the decision granted.”

Report by Geraldine Gittens – Evening Herald.

Ireland Property – Daft Property – http://daftproperty.blogspot.com

Irish property could still be overvalued by 30 percent…

Irish house prices increased by around 330 per cent between 1996 to 2007 – a bubble of impressive scale and duration, but a bubble nonetheless.

Plenty of outside observers saw the writing on the wall and said so, but they were overlooked in the Celtic Tiger gold rush. The European Central Bank (ECB), the Organisation for Economic Co-operation and Development (OECD), the Financial Times, the Economist and the International Monetary Fund (IMF) all spoke of dire portents early and often.

They were ignored. Cheap and easy money arrived in Ireland just as the tiger economy geared up. The country adopted the euro and access to a large pool of low-cost European finance with it.

When the bubble burst Ireland’s main domestic financial institutions were wiped out and European institutions and the IMF took over the nation’s financial affairs. So the question now is has the country reached the end?

According to a report in The Irish Times this week one key factor will be residential and development property values. Ireland is currently hoping for a stabilization of prices at current levels.

From 1953 to 1996 the ratio of the price of new houses in Dublin to average industrial earnings was 5.3. That is also where it was in 1996. In 2006, it reached 13.7 but by 2010 it had fallen back to 7.4.

Returning to the pre-bubble level, average house prices in 2010 should have been approximately €180,000 instead of approximately €250,000 in terms of average house prices and average incomes.

Report by DARA KELLY – IrishCentral.com Staff Writer

Ireland Property – Daft Property – http://daftproperty.blogspot.com

Investors have been key players in the Phoenix real estate market, specifically in the process of digesting the effects the Great Recession.

In the last 4 months sales to investors hovered in the 23-25% of sales range including 2,254 units in March, 1,665 in February and 1,618 in January 2011 according to data from the Cromford Report.

Some don’t like this heavy investor involvement citing the crash as being partially due to reckless investors, but these investors today are much different then before: these are not speculators taking on properties for a quick buck with low down loans.  In fact, a large portion of the properties now are being purchased with cash.

These buyers are often local, but mostly they are buyers from other states and international buyers from Canada, Australia in some instances, Poland and Germany.

These cash buyers are posing some problems for buyers with financing. Often, even if the financed offer is higher the sellers, in some cases, have accepted cash offers.

This is not unusual as financing contingencies pose some risk for the seller including the appraisal and the need for other parties to be involved.

There are numerous times when a short sale was approved with a short time to close – too short for the buyer to obtain financing. If the listing agent has not secured viable back-up offers the seller went into foreclosure which has many graver consequences then a short sale.

All activities point to an increasingly competitive market for the next several months.

Investors Target Phoenix En Masse With Cash In Hand is a post from: Phoenix Market Trends

Brian Lenihan tells the Irish bailout story on Radio 4…

The inside story of Ireland’s unprecedented economic bailout is revealed in Bailout Boys Go to Dublin, a new documentary on BBC Radio 4.

In his first major interview since the last November’s bailout, former Irish Finance Minister Brian Lenihan recalls his feelings as he prepared to sign up to the 85bn euro (£75bn) bailout – a deal which would end Ireland’s economic sovereignty.

“I have a very vivid memory of going to Brussels on the final Monday and being on my own at the airport and looking at the snow gradually thawing and thinking to myself: this is terrible. No Irish minister has ever had to do this before,” he says.

“I had fought for two and a half years to avoid this conclusion. I believed I had fought the good fight and taken every measure possible to delay such an eventuality and now hell was at the gates”.

Dan O’Brien, the economics editor of the Irish Times, tells the story behind the bailout.

It is a tale of high drama, international diplomacy and – ultimately – political meltdown.

In the space of just two weeks and two days, the country was transformed.

The Celtic Tiger was dead and Ireland was forced to go with the proverbial begging bowl and accept a multi-billion euro international bailout.

It was an unprecedented situation. Never before had the International Monetary Fund given a bailout to a country that – publicly at least – was insisting it did not need it.

Mr O’Brien talks to the main players to uncover the truth of just what happened during those weeks in November and how the deal was reached.
‘Totally nailed down’

Many believe Ireland was bounced into the bailout by Europe – and in particular the European Central Bank.

“The Irish government decided on its own to seek help. We have not pushed anyone” says Klaus Masuch, the chief negotiator for the European Central Bank.

But Brian Lenihan tells a very different story.

“The European Central Bank appeared to have arrived at a view that Ireland needed to be totally nailed down,” he says.

When asked if the ECB bounced Ireland into a bailout, Mr Lenihan responds: “I would say that, yes”.

Mr O’Brien describes the chaos as teams from the International Monetary Fund, the European Commission and the European Central Bank arrived in Dublin.

“There weren’t enough desks so for the first few days we just sat with our laptops on the floor” one negotiator says.

He hears about the government’s fears of widespread social unrest during these weeks as the country lost control of its own finances. And he hears about the 2am meetings as the international teams struggled to save not only the Irish economy – but the whole future of the euro.

Bailout Boys Go to Dublin is broadcast on BBC Radio 4 at 1330 BST on Sunday 24 April and again at 1100 BST on Wednesday 27 April.

Report – BBC

Ireland Property – Daft Property – http://daftproperty.blogspot.com

Allsop plans five fire sales a year…

THE UK auction house Allsop and its Irish affiliate Space plans to hold up to five distressed property auctions a year following the success of its first auction last Friday when 81 out of 82 lots were sold for a total of €15 million.

The next auction is scheduled for July 7th, when 200 lots will be auctioned, including apartments, tenanted shops, farms and houses.

According to Space director Stephen McCarthy, his company is being inundated with requests from receivers, banks and individuals who want to sell their property fast.

Many of the properties in Friday’s auction were sold by Bank of Scotland Ireland and it’s believe there is plenty more of this stock to sell. These include apartments in the Castleforbes development in the Dublin docklands, as well as units in Dublin 8 and in Castleknock. However, the agency is also considering taking on more agricultural land. One lot, a 55 acre farm in Co Wickow sold particularly well, making €420,000 against a reserve of €290,000.

Around 20 per cent of the buyers at Friday’s auction were from overseas, according to McCarthy, including buyers from France, England, Scotland and Israel. The event was marketed heavily in the UK, and some London investors were in the room, although more are likely to become interested in the Irish scene as the auctions become more established, he says.

Among Irish buyers, the most significant group was made up of parents buying for their children, says McCarthy.

Future auctions are likely to have a similar mix of apartments and commercial buildings priced at the lower end of the scale.

“It’s clear that the easiest properties to sell are those under €200,000,” says McCarthy. “Agricultural land also went very well, and we hope to have more of that.”

However, he does not see much opportunity to sell houses at the upper end of the market. “You won’t see houses on Ailesbury Road in these auctions,” he said.

Report by ORNA MULCAHY – Irish Times

Ireland Property – Daft Property – http://daftproperty.blogspot.com

Soap opera life of Celtic Tiger dynasty…

THE wealth built up by their parents was a launch pad for sons Jim Jnr and PJ in a boom-time era world of beautiful women, powerful cars and fashionable parties.

In true soap opera style the family has seen more than its share of strife and tragedy.

All three of Jim Mansfield’s sons were brought into the family businesses, but personal rather than business dealings catapulted two of the boys into the media limelight.

Youngest son PJ married model and former Miss Ireland Andrea Roche in a high-profile wedding ceremony in 2006.

The event was a magnet for Ireland’s fashionistas.

Leggy models and household names were packed into a marquee in the grounds of nearby Palmerstown House for the reception.

Nearby, the village of Saggart was choked to capacity by the fleet of Mercedes, Bentleys and Chryslers — as well as the Mansfield’s family Rolls-Royce — which had been left parked on the narrow streets during the big event.

His brother Jim Jnr had dated the fashion model Katy French, who died of a drugs overdose some time after the couple split up.

Last year Jim Jnr hit the headlines again with a conviction for drink driving in the family Rolls Royce and was in the papers again for business reasons after AIB took him to court for a €6.3m debt.

Helicopter

AIB registered a legal judgment against Jim Jnr and four business partners last July for an unpaid debt of €6.3m over a land deal, but the case caught the public attention when Jim Jnr claimed in his defence that he suffered from a reading disability.

That defence got short-shrift from Justice Peter Kelly, the head of the commercial division of the High Court.

Mr Justice Kelly noted that Jim Jnr was a director of 25 companies and qualified to fly a helicopter.

Third son Tony keeps a low-profile, but it was he who faced up to creditors when the company behind Citywest was put into liquidation earlier this year.

It was Tony who read lenders and suppliers the directors’ statement and faced the hostile reaction of business partners left out of pocket by the firm’s insolvency.

Report by Donal O’Donovan – Irish Independent

Ireland Property – Daft Property – http://daftproperty.blogspot.com

‘Property mania’ at heart of bank crisis…

The Nyberg report into the handling of the banking crisis has found that the main cause was the ‘unhindered expansion of the property bubble’.

The Nyberg report into the handling of the banking crisis has found that the crisis was the result of domestic Irish decisions and actions, and not international developments.

The report, written by Finnish banking expert Peter Nyberg, said the main cause was the ‘unhindered expansion of the property bubble’, which was fuelled by banks using money borrowed from international markets.

It said the risks linked to the bubble were undetected or seriously misjudged by the authorities. It said any warnings from the authorities were ‘modest and insufficient’.

The report said nobody abroad forced Irish households, investors, banks and authorities to take what it called ‘unsustainable’ financial risks.

The report referred to the development of a ‘national speculative mania’ in Ireland during the property boom. It said neither banks or borrowers really understood the risks they were taking.

It said Anglo Irish Bank, because of its strong growth, came to be seen as a role model for other Irish banks, leading to a general lowering of credit standards.

The report refers to a ‘pervasive pressure’ for consensus during the period leading up to the crisis, saying banks appeared to have behaved in a ‘herding’ fashion, while there was a widespread lack of critical discussion within many banks and authorities.

The report says the way Anglo Irish Bank and Irish Nationwide were run fell short of best practice. Mr Nyberg says that while procedures and process existed on paper at Anglo, they were not followed in practice. At Irish Nationwide, he says, some essential, independent functions either did not effectively exist of were under-resourced.

It found that there were ‘numerous’ instances were banks did not comply with banking regulations, but went unsanctioned by the Financial Regulator. In the cases of Anglo and Irish Nationwide, where the regulator did raise concerns, they led to little real change.

The report describes it as ‘remarkable’ that the regulator accepted the severe problems in Irish Nationwide and allowed it to continue without major reform or sanctions. It adds that the regulator’s problem was not lack of powers but lack of scepticism.

On the other banks, the report says some board members interviewed indicated that there was a ‘strong preference for consensus’. The report says it appears to have been difficult for individual board members to express views which went against the majority. Mr Nyberg also says the documentation of board discussions over the period was ‘insufficient’.

Central Bank ‘may have been in denial’

The report says the Central Bank and Financial Regulator took note of risky bank behaviour, but did not seem to think it worrying enough to take major policy measures to restrain the banks.

It says a ‘very limited’ number of individuals argued for stronger measures but failed to convince their superiors.

The report says the Government actively supported the property market over a long period against the ‘apparently weak but clear’ opposition of the Department of Finance.

The report says the Central Bank may have been in a state of denial, and did little to alert banks or other authorities to potential financial risks. Any warnings that were made public were toned down. The report says staff at the Central Bank and Financial Regulator did not co-operate in a meaningful way until the crisis.

It adds, however, that international organisations such as the IMF, EU and OECD, were at most modestly critical and often complimentary about Ireland. ‘This gave the authorities and the banks additional reason to assume that all really was well,’ it says.

It also says that the banks’ external auditors fulfilled their narrow function according to existing rules, but did not appear to have questioned the banks about their growing exposure to property. The report says such dialogue could have highlighted the risks to the banks’ business models.

Guararntee talks ‘based on wrong assumption’

On the bank guarantee of September 2008, the report says that if accurate information on the state of the banks had been available at the time, it is ‘quite likely’ that a more limited guarantee, combined with a State takeover of at least one bank might have been considered more seriously.

The Nyberg report says decisions at the time were made on the wrong assumption that all the banks were and would remain solvent.

It says the guarantee represented a considerable risk to the country, and it could have been useful to consider other ways of keeping the banks going for a few days. But the report adds that, given the mood of financial markets at the time, the risk fo destabilising the situation would have been ‘substantial’.

Noonan says Government will reflect on report

Finance Minister Michael Noonan has welcomed the publication of the report.

He said the Government intends to reflect on its contents after making a formal statement to the Dáil tomorrow when the House is due to hear statements on its findings.

Today’s report is the final of three reports into the banking crisis. That collapse has so far cost the taxpayer €70 billion.

Last summer Central Bank Governor Patrick Honohan’s report focussed on regulation of the banks. A second report by experts Klaus Regling and Max Watson examined the economic background which led to the crisis.

The Cabinet discussed the report earlier today before its publication.

Report – RTE

Ireland Property – Daft Property – http://daftproperty.blogspot.com

At last! A plan to kick-start property…

Nama’s €1bn ‘financial muscle’ to get sales moving and help balance books.

Frank Daly, the chairman of Nama, which has €1bn at its disposal, has said that the State agency intends to use its “financial muscle” to “kickstart the property market”.

Yesterday, Mr Daly told the Sunday Independent that the provision of “limited financial support” for the purchase of property was a “natural next step” for Nama.

He said: “What we’re aiming to do is build market confidence at sustainable levels — to use Nama’s financial muscle to kickstart the property market in a way that will benefit the project itself and provide people with an opportunity to own their own home.”

The disclosure that Nama has up to €1bn to directly intervene in the moribund market comes after an auction of property in Dublin on Friday which has generated a huge level of excitement.

A total of €15m was spent on over 80 “distressed” properties, in many cases exceeding the stated reserve. This may be an indication that the Irish love affair with property remains undiminished, particularly when perceived bargains are available.

The prices fetched at the auction will further inform Nama as to the state of the market as it prepares to sell off thousands of properties around the country.

All of the properties sold at the five-hour auction went for in excess of 50 per cent below prices they would have realised at the peak of the boom. The outcome has generated a feel-good factor, which many experts hope will serve as a precursor to a sustainable recovery in the market.

Yesterday, financial adviser Eddie Hobbs said the proposed intervention by Nama would be a welcome “upward pressure” that would help the market recover somewhat.

However, he urged caution against expectation that the market was poised to rebound: “It won’t,” he said, “there are still too many downward pressures.”

Mr Hobbs said the property auction at the Shelbourne Hotel in Dublin was another indication that the “mood” of the country had changed for the better since the new Government was elected.

Figures published last week show that consumer sentiment rose sharply in March, after the Government was elected. The gain was the third largest monthly rise in the 15-year history of the index.

“The auction caught a little of that pulse, a very low pulse, but it is there,” Mr Hobbs said. “It is perceptible, many business people have said it to me since the Government was elected. There is a little pick-up and that should be protected.”

Figures recently published by the Department of Finance reveal there is €126bn in retail deposits in Irish banks — in fact, people here are the highest savers in Europe.

It seems certain that a majority of bidders at the auction were such ‘cash buyers’ who could afford to purchase the properties outright.

Therefore, irrespective of whether prices fall further or not, these purchasers will be satisfied that they have achieved a good deal as most of them secured properties for less than construction costs, including site value.

For the property market to recover, Mr Hobbs said that “downward pressures” would have to be addressed.

He added: “The cost of borrowing has almost completely offset the fall in property prices so far. For example, the cost of a €200,000 mortgage today is almost the same as the cost of a €300,000 mortgage a few years ago. We won’t see the floor and a recovery until the banks’ margins on mortgages tighten up.”

There is a view among experts that a recovery will not be widespread, but that good properties in urban areas, or established suburban areas, will recover relatively within the next year or two.

Mr Hobbs also said that the Government and the European Central Bank should force banks to introduce mortgages on a fixed rate between 20 to 30 years.

A Nama spokesman yesterday said: “Nama’s aim is to work with the existing banks to help them provide adequate finance for people who wish to purchase Nama assets.

“The customer will still deal with their bank, but behind the scenes part of the finance may be supplied by Nama or part of the risk of providing a mortgage to a customer may be borne by Nama. We’ll be talking to the banks in the coming weeks about the proposals.”

Mr Daly said: “Nama’s proposal to explore how it can provide liquidity to the market is a sign of strength and reflects the progress it has made in the 15 months since it was formally established.”

The chairman also said that some of the top property developers were being co-operative and “they will help us recover money for taxpayers”. But he added that some were “still in denial” or were “refusing to co-operate”.

In those cases, Nama would move to begin enforcement proceedings, he said.

Report by Jody Corcoran and Ronald Quinlan – Sunday Independent

Ireland Property – Daft Property – http://daftproperty.blogspot.com

The bargain hunters were out in force today in Dublin!

It was a busy day at the Shelbourne Hotel where many cut-price homes and properties were sold. Here are the Allsop Auction results:

Lot Type Location Reserve Price will not exceed this figure
1 Vacant Flat Temple Bar Sold €126,000
2 Investment Flat Dublin 1 Sold €129,000
3 Investment Flat Dublin 8 Sold €102,000
4 Investment Flat Dublin 8 Sold €159,000
5 Investment Flat Bray Sold €154,000
6 Investment Freehold Building Clifden Sold €141,000
7 Investment Flat Portlaoise Sold €61,000
8 Investment Flat Portlaoise Sold €62,000
9 Investment Freehold Building Roscrea Sold €336,000
10 Vacant Freehold House Dundrum Sold €410,000
11 Vacant Flat Dublin 1 Sold €120,000
12 Vacant Flat Dublin 1 Sold €116,000
13 Investment Flat Dublin 1 Sold €190,000
14 Vacant Flat Dublin 7 Sold €107,000
15 Vacant Freehold House Renmore Sold €332,500
16 Investment Freehold Building Renmore Sold €205,000
17 Investment Flat Dublin 8 Sold €159,000
18 Investment Flat Galway City Centre Sold €74,000
19 Vacant Flat Dublin 8 Sold €345,000
20 Investment Dublin 6 Sold €350,000
21 Investment Flat Dublin 8 Sold €93,000
22 Investment Flat Castleknock Sold €207,000
23 Investment Flat Castleknock Sold €200,000
24 Investment Flat Rathfarnham Sold After
25 Vacant Freehold House Churchtown Sold €495,000
26 Vacant Freehold House Churchtown Sold €505,000
27 Investment Flat Galway City Centre Sold €70,000
28 Investment Flat Portlaoise Sold €64,000
29 Investment Kilmallock Sold €285,000
30 Investment Flat Dublin 1 Sold €179,000
31 Investment Freehold Building Wexford Sold €560,000
32 Investment Flat Castleknock Sold €159,000
33 Investment Flat Castleknock Sold €160,000
34 Vacant Freehold House Dublin 4 Sold €550,000
35 Vacant Flat Galway City Sold €95,000
36 Investment Flat Galway City Centre Sold After
37 Vacant Flat Dublin 1 Sold €161,000
38 Retail Dublin 1 Sold €190,000
39 Investment Flat Dublin 8 Sold €120,000
40 Investment Flat Dublin 7 Sold €100,000
41 Vacant Freehold House Dublin 14 Sold €470,000
42 Investment Flat Rathfarnham Sold €145,000
43 Investment Flat Castleknock Sold €160,000
44 Vacant Freehold House Dublin 18 Sold €530,000
45 Retail Bettystown Withdrawn
46 Vacant Flat Dublin 1 Sold €99,000
47 Vacant Freehold House Wicklow Sold €420,000
48 Investment Mahon Village Sold €130,000
49 Investment Freehold House Tuam Sold €70,000
50 Investment Flat Galway City Centre Sold €70,000
51 Investment Flat Dublin 8 Sold €103,000
52 Investment Newbridge €70,000
53 Investment Flat Rathfarnham Sold €139,000
54 Vacant Castleknock Sold €163,000
55 Retail Crumlin Sold €220,000
56 Land/Site Malahide Sold €230,000
57 Investment Flat Dublin 1 Sold €140,000
58 Investment Flat Portlaoise Sold €64,000
59 Vacant Dublin 8 Sold €160,000
60 Retail Dublin 8 Sold €57,000
61 Investment Flat Galway City Centre Sold €70,000
62 Vacant Flat Dublin 1 Sold €163,000
63 Investment Freehold Building Castletownbere Sold €365,000
64 Investment Flat Dublin 8 Sold €121,000
65 Vacant Freehold House Corrandulla €125,000
66 Investment Flat Rathfarnham Sold €140,000
67 Leisure Arklow Sold €400,000
68 Investment Flat Galway City Centre Sold €78,000
69 Investment Flat Castleknock Sold €172,000
70 Investment Flat Castleknock Sold €180,000
71 Investment Flat Dublin 8 Sold €119,000
72 Investment Flat Dublin 1 Sold €165,000
73 Investment Flat Dublin 1 Sold €185,000
74 Vacant Freehold House Lucan Sold €250,000
75 Vacant Freehold House Tinryland €77,500
76 Vacant Freehold House Athlone Sold €49,000
77 Vacant Freehold House Lucan Sold €161,000
78 Vacant Freehold House Carlow Sold €129,000
79 Vacant Freehold House Mullingar Sold €30,000
80 Vacant Flat Withdrawn Withdrawn
81 Vacant Freehold House Lucan Sold €181,000
82 Vacant Freehold House Tuam Sold €74,000
83 Land/Site Wicklow Town Sold €52,000
84 Vacant Freehold House Rathangan Sold €140,000
84 Lots sorted by Lot Number Lots: 1-84

Ireland Property – Daft Property – http://daftproperty.blogspot.com