Home Truths

Excuses to pull out of sales lead to tales of hard times for agents, says Edel Morgan

It's a very Irish trait that we like to let people down as gently as possible. Better to spin an elaborate - even far fetched yarn - than expose the other person to the brutal truth and, God forbid, risk an awkward conversation.

This can extend to major life decisions including, for example, deciding to pull out of buying a property after making an offer. Instead of telling it like it is with: "I've changed my mind" or "I'm nervous about completing the sale in a slow market", anecdotal evidence from estate agents suggests people often try to soften the blow with convoluted excuses. "I've decided to emigrate" is apparently a common one, or "we're splitting up" or "I've been offered a once in a lifetime opportunity to become a space tourist and am using the money for that". Okay, I made the last one up but you get the gist.

It's hard to know what people think is going to happen if they tell the truth. That the agent will turn green and start hurling furniture about? Or worse, weep inconsolably and beg them to change their minds? (This one might be not be so outlandish in the current market.)

One agent I spoke to - who says a guy once told him he couldn't buy a property because he was off to join the priesthood - maintains that he now expects 10-20 per cent of "sale agreeds" to fall through, but he knows of agents reporting 40-50 per cent fall-throughs, often in new homes developments where people get cold feet after putting down a deposit.

He believes there is a large pool of potential buyers around with mortgage approval but they are - understandably - a jittery bunch, influenced by media reports and speculation about falling prices and by the opinions of friends and family. "Nobody wants to be the eejit that paid the top price before the market falls further. People are afraid of paying too much. They are all waiting, waiting and panicking when they hear a report or are talking to a friend who says 'what are you buying that for'," he said.

During the boom gazumping was prevalent - where a vendor, through an estate agent, accepts an offer and then reneges on this agreement when a better offer comes along. The slow-down has sparked the buyers' revenge where, after an offer is accepted, they demand a discount and threaten to withdraw from the sale. In one new homes development, two-thirds of buyers negotiated a price with the developer and many asked for extras to be thrown in. In other cases, buyers are producing the surveyor's report on second-hand properties and saying they need a reduction in the price to pay for repairs or upgrading.

The agent, who didn't want to be named, says in the current market vendors and developers often accept a lower price rather than lose a sale. "This is going on all over town, but quietly, behind the scenes. Nobody wants to be the first to be seen to be dropping their prices, because they know once it starts, no-one knows where it will stop. It is not generally known how bad it really is on the ground."

Another agent told me out of 18 sales last month, his firm has had only three cancellations, "but some auctioneers are experiencing 50-60 per cent and some are laying staff off".

He said that, when people pull out of a sale, sometimes it's hard to know if their reasons are genuine. "They often say they couldn't get mortgage approval, which might be true as the bank could have given them provisional approval and then stress-tested them and turned them down. Another one is that the school they want their child to go to is too far away or they can't get their children into the local school, which could be a valid reason. Sometimes, though, they feel it's easier on you not to tell you the truth, but if people don't want to buy, there's not much you can do about it."

- emorgan@irish-times.ie