Awesome WordPress Themes

The Irish Times – Thursday, February 23, 2012

• 1
• 2
• 3
• 4
• 5

• Clonbur, Connemara – five-bed with €70,000 reserve
• Meadow Court, Blackrock, Co Dublin – four apartments for sale
• The Watermill, Rathvilly, Co Carlow – millhouse with a reserve of €150,000
• Belfry Drive, Drogheda – showhouse for €128,000
• Gary Murphy who conducted all four of last year’s Allsop/Space auctions

The first of five planned Allsop/Space auctions for 2012 is scheduled for next week.
FRANCES O’ROURKE gets a glimpse backstage with Allsop auctioneer Gary Murphy and below
EDEL MORGAN previews some of the properties that are being lined up for sale

ALLSOP/SPACE’S first mass auction of properties in the Shelbourne Hotel, Dublin, last April “was more buzzy than I’ve seen in my whole career,” says Gary Murphy, the silver-tongued UK auctioneer who conducted all four Allsop/Space auctions here last year.

“As soon as the first lot was offered, hands went up everywhere and I thought ‘this is going to be a good day’. ”

And it was: all the lots sold, either on the day or just after. “I’d only done that once before,” says Murphy, who has been an auctioneer for 27 years, when he joined his father’s firm in London before moving to Allsop to build its residential auction arm in the midst of a 1980s recession.

Now, he says, Allsop/Space is here for the long term: it has five auctions planned for 2012, the first one kicking off next Thursday.

Over four packed auctions between April and December 2011, 96 per cent of 340 lots – 80 per cent of them residential – sold, bringing, Murphy says, transparency to a property market where information is a scarce commodity.

Thus when asked if prices are falling, he’s confident saying that “the price of good apartments producing an income in the centre of Dublin now appears to be stable. We’re getting the same price at each auction. Yields are between 8-12 per cent; it’s a benchmark.”

There will be no shortage of properties to sell, he says. “I think we’ve just scratched the surface: it’s a question of getting the right stock at the right price.”

Allsop/Space discussed its plans with banks here in the year before it launched its first mass auction, and is understood to be selling properties on behalf of the Bank of Scotland, although Murphy will not confirm this.

He is sympathetic to people who protested at Allsop’s recent auctions but says there are very few repossessed properties in its sales.

“Selling properties on behalf of receivers would be different, however.”

One of the keys to the success of the mass auctions was establishing record low reserves – and guaranteeing that the properties would sell once they had reached them.

How did they hit on a reserve of €7,500 for a cottage in Leitrim which grabbed headlines when the March 1st auction was announced?

“We look at properties, try to get comparisons. It has to be a no brainer price, the ‘I’d buy it for that’ price. The problem is getting the vendor to agree.” About 30 per cent of vendors in its catalogues are private sellers.

“When you set the maximum reserve, it has to be lower than the price you expect to achieve, to provoke competition. But we pledge that a property will be sold when it reaches that reserve price.”

Over four auctions, 76 per cent of properties sold at or above the reserve, and 72 per of sales were to cash buyers. The auctions have attracted attention from a global market, with 140 registered bidders from abroad.

“Twelve per cent of overseas bidders – from countries ranging from Australia to the United Arab Emirates to South Africa – were successful.

Auctioneering is in Murphy’s genes: he has been on the rostrum since he joined Hillyer’s, the London firm his grandfather had founded. He joined Allsop, a 104-year-old firm, in 1986, building its residential department on the back of large country houses. Then, in the recession of the late 1980s/early 1990s “we talked to Halifax and pioneered the sale of repossessed properties by auction. We’d have two-day sales, selling 400 lots a day”.

He enjoys auctions enormously, saying “I’m a bit of a show-off.” He says he can spot who’s an investor, who’s a first-time buyer by looking at his audience, and that every bid is a little negotiation, a bit like tennis. He says he particularly enjoyed the Irish auctions “because of the characters in the room; and it’s nice to see people enjoy buying property. An auction is a great way of focussing people’s attention.”

AUCTION HIGHLIGHTS WHAT’S ON THE CARDS 

A DETACHED new four-bedroom showhouse in Drogheda with a reserve of €128,000, four apartments in a south county Dublin development, Meadow Court in Blackrock, with prices ranging from €90,000 to €170,000, and a house of bedsitters in Crumlin with a yield of 28 per cent – the highest in its catalogue – are amongst properties included in next Thursday’s Allsop/Space auction.

Some of the properties failed to sell in Allsop’s recent auctions and have dropped their reserves: the reserve on a two-bedroom apartment for sale in Meadow Court, Stillorgan Park, Co Dublin, has cut its reserve price from €240,000 to €170,000 for next week’s sale.

“We’re learning about prices as well,” says Allsop/Space’s Robert Hoban.

The auctioneers are confident that next week’s auction in the Shelbourne Hotel in Dublin will again attract crowds.

There are 100 lots in the sale, of which about 74 per cent of the properties are residential. Fifty per cent of the 100 listed for sale are being sold with tenants in place and nearly half the lots are in Dublin.

While 68 per cent of the sales are on behalf of receivers or liquidators, about one-third of the sellers are private, people who in some cases have had their houses on the market for a couple of years says Hoban.

According to Hoban, three of the most talked about properties – the ones that made headlines a few weeks ago, when the agents announced the auction – are being sold on behalf of private individuals.

Lot 55, a cottage at Drumcannon, Carrigallen, Co Leitrim which has a reserve of €7,500; lot 67 the Watermill, Rathvilly, Co Carlow, a millhouse, with a reserve of €150,000; and lot 54, 41 Seville Place, Dublin 1, which is set at €35,000.

“All were frustrated with the arduous process of having tried the private treaty market with no success. All had been on the market for a long time, with numerous offers received, but none progressed. Each are very keen to establish open market value with hopefully the certainty of signed contracts.”

He says a large number of the receivership properties have tried the private treaty market without a signed contract emerging – most notably, the Sandhouse Hotel in Donegal, which was on the market for three years without success. “Many eyes will be watching to see how it fares.”

By Linda Stern

WASHINGTON |
Wed Feb 22, 2012 3:47pm EST

WASHINGTON (Reuters) – This is America Saves Week, one of those artificial holidays designed to convey a message. And the message is: Save more money.

Oh, sure – we are all supposed to be saving more. But raise your hand if you have any cash left at the end of the month to plunk into that savings account. That’s what I thought. Keep your hand up if you are underwhelmed by the 0.4 percent interest your bank is offering you on that account.

Maybe that’s why the personal savings rate seems sort of stuck at around 4 percent of disposable income in the U.S. according to Commerce Department. There’s got to be a better way, as the commercials say.

Here are a few better ways to save. They work because they take the savings out of your hot little hands before you get any chance to spend them. The theory behind these automatic savings is this: You won’t miss what you won’t see. And your savings will build up despite your best efforts at self sabotage.

- Buy a house. That may sound like crazy advice at a time when many advisers have newly come to embrace renting, but look at the math: If you buy a home on a 30-year fixed mortgage and make your payments every month, at the end of 30 years you own a house you can sell. If you rent instead, at the end of 30 years all you’ll have is another rental contract.

The numbers are somewhat persuasive. The median home price today is $231,300, according to the National Association of Realtors. Borrow $212,000 at a 4.18 percent average interest rate (according to HSH Associates; you can probably do better), and your monthly payment will be $1034. In 10 years you’ll have paid it down to $168,142; in 20 years, $101,361 and in 30 years you are done.

You can turbo charge that by getting a 15-year loan at 3.47 percent and paying $1,513 a month. In 5 years you’ll owe $153,265; in 10 years, you’ll owe $83,255 and in 15 years, finis.

Meanwhile, your payment will stay the same. It’s hard to imagine rent staying stable for all those years. It’s hard to imagine interest rates staying stable for all those years.

Critics will point to the meltdown in housing that’s occurred in the last five years and say it’s a bad investment. But in actuality, the housing meltdown followed an unusual ramp up. On average, people who bought houses before 2004 are even or above, according to the Case Shiller index. Furthermore, the likelihood of a post-meltdown meltdown isn’t zero, but it’s not that high either. Home ownership is a long term proposition.

Critics will also say that homeowners have to pay for property taxes and home insurance, but don’t you think that landlords are charging you for that, too?

- Use high deductible health insurance and a health care savings account. The high deductible insurance plan lowers the monthly premium. You can link the plan with a specially designated health care savings account and make tax-deductible contributions of up to $3,100 per person ($6,250 for family coverage) a year. There’s also a catch up contribution of $1,000 for people over 55.

Here’s the beauty of this plan. Withdraw the savings to pay for health care costs and you never have to pay taxes on them. But there’s no requirement that you withdraw them in the year you make those expenses. So, make the full contribution and let it sit in your health savings account until you retire. Use other funds for your health care costs until then.

You’ll probably have plenty of health care costs after you retire, and can use this account. Even if you don’t, you can withdraw money in retirement to repay yourself health care costs you laid out during the earlier years when you were participating in the plan and stashing the money. It’s even better than a tax-deferred retirement account, because there’s never any tax on that money, if used for healthcare.(Learn more at HSA Bank, one bank that offers these accounts and allows you to invest them long term; www.hsabank.com).

- Use a credit card that saves for you. The uPromise credit card will put your cash rebates directly into your college savings account or another savings vehicle; www.upromise.com.

Fidelity Investments offers three different American Express cards that will put 2 percent cash back into your retirement account, brokerage account or college savings fund. (www.fidelity.com.)

- Go autopilot. Choose a no-load inexpensive index mutual fund at a company like Vanguard or Fidelity. Open an account and authorize the fund company to automatically pull a set amount out of your checking account every month and invest it in the fund. Make it whatever you can afford; $50 or $100 or more. You won’t miss the money when you’re used to it being deducted automatically. Month after month, you’ll buy more shares when prices are low and fewer when prices are high. You’ll accumulate enough money so that next year, you will really feel like celebrating America Saves Week, too. Maybe with a bumped up contribution.

(The Stern Advice column appears weekly, and at additional times as warranted. Linda Stern can be reached at linda.stern@thomsonreuters.com; She tweets at www.twitter.com/lindastern.;

Read more of her work at blogs.reuters.com/linda-stern;

Editing by Richard Chang)

It may just be a blip, but South Florida homeowners will take good real estate news where they can get it.

A housing-price index that excludes foreclosure sales showed South Florida homes sold for 1.2 percent more in December than they did in November. The FNC Residential Price Index does not adjust for seasonal swings in the housing market, but it’s encouraging to note that December 2010 saw a 2 percent dip in the South Florida index. A gain for December 2011 hints at a possible turnaround in an historic collapse in prices. Whatever the cause, Miami was in the minority for December. Of the 30 metropolitan areas tracked by FNC, only seven saw higher prices than they did in November. Tampa joined Miami in beating the curve in December with a higher FNC reading, another good omen for real estate in the Sunshine State.

Or not. Similar indices — most notably the Case-Shiller index — have bounced off lows in the past, only to resume a general slide that began five years ago. The FNC index shows home prices are down 55 percent from their peaks. Case-Shiller mostly agrees, showing a 51 percent drop.

DOUGLAS HANKS

LIN’S NEW CRIB

Remember when Jeremy Lin was sleeping on his brother’s couch? What a difference a couple weeks makes. See photos of Lin’s new home in NYC.

Breakout New York Knicks star Jeremy Lin is renting an all-inclusive, impeccably furnished pad at the W Hotel in Manhattan’s Financial District, sources said.

His swanky, 1,182-square-foot (110-square-meter) condo at the Sunshine Select Residences is in addition to his new digs at the Trump Tower in White Plains.

And both are vast improvements over crashing on a couch at his brother’s Lower East Side pad, which was Lin’s living situation just weeks ago.

The two-bedroom W suite comes outfitted with $30,000 to $35,000 worth of Tui Lifestyle furniture.

LINSANITY!

Rents there range from $3,600 to $8,900 a month, according to Streeteasy.com. The owner of Lin’s unit had put the two-bed, two-bath apartment up for sale for $2.315 million before renting it out.

Building amenities include a gym and preferred reservations, seating and in-residence dining at the hotel’s BLT bar. Residents also have access to a digital lounge with video games, a movie screening room, cafe, gym and rooftop terrace.

The humble hoops star did not pick the flashiest apartment in the building and instead went for a mid-level unit, sources said.

Lin will sign the rental papers this week, giving him a short trip to Madison Square Garden on game nights.

And his Westchester County condo — owned by his pal and former Golden State Warrior teammate David Lee — is a short drive from the Knicks’ practice facility in Greenburgh, N.Y.

HE’S BALLIN’

Check out Jeremy Lin in action during his breakout season.

Sources said Lin plans to spend most of his time at the hotel residence.

Lin, an ex-NBA cast-off cut by two teams, sparked a phenomenon known as Linsanity in helping the Knicks turn around a losing season.

Along the way, he has also shown an uncanny ability to win friends — even among opponents.Nets forward Kris Humphries said, “It’s nice to see great things happen for nice people.”

LOS ANGELES
- Next to filing for bankruptcy protection, nothing wrecks your chances of qualifying for a home loan like a foreclosure.

And if you got out from under an oppressive mortgage through a short sale — when the bank agrees to accept less than what the homeowner owes — lenders can look upon you just as unfavorably.

It’s a reality that the former owners of the more than 4 million homes lost to foreclosure in the six years since the housing bubble burst will have to confront if they want to own again. But the passage of time makes all the difference.

That’s because mortgage-lending guidelines that most banks follow prohibit them from making loans to people with foreclosure or a short sale in their credit history, often for years. Never mind the hit that one’s credit score takes.

Still, some of the homeowners who were foreclosed upon when the market first started to skid are now looking to buy and getting loans.

“They’re probably going to pay a little higher interest rate, but with rates so low, a higher interest rate of 4 percent is not a big deal,” said Rosa Herwick, a broker and owner of Century 21 JR Realty in Henderson, Nev.

So how likely are banks to approve your mortgage application if you have a real estate-related blemish on your record? And can you do anything to spring yourself from the mortgage penalty box?

It depends on several factors, but largely on whether you had a foreclosure or a short sale.

FORECLOSURE

Generally, borrowers who have a foreclosure in their credit history can expect to wait between two to seven years before a lender will even accept their loan application.

The waiting periods stem from guidelines most banks must follow in order to be able to sell their home loans. That’s because potential purchasers, such as Fannie Mae and Freddie Mac, each have a different set of guidelines for the loans they will buy and criteria for whom they deem a qualified borrower.

The fact is, a person’s credit score, employment history and other factors that make up one’s creditworthiness will take a back seat to these resale guidelines.

If a buyer with a past foreclosure is seeking a government-backed mortgage, the waiting period can vary before they can qualify.

Take the Federal Housing Administration, which insures roughly 30 percent of new loans. Under its guidelines, former homeowners must wait three years from the date of their foreclosure before they can qualify for backing by the agency.

Compare the U.S. Department of Agriculture’s housing program which requires three years, while the time penalty for a VA loan is two years. Fannie Mae and Freddie Mac, which own or guarantee about half of all mortgages, require the longest stretch: seven years after a foreclosure.

In some cases, the waiting periods for a foreclosure can be reduced.

Fannie Mae, for example, allows a three-year waiting period in the event the foreclosure was due to an extenuating circumstance. The company defines this as an event that was beyond the homeowners’ control and resulted in a sudden reduction in income or catastrophic increase in financial obligations. Think job layoff, medical bills or divorce.

FHA may grant an exception to its waiting period in the event a wage-earner becomes seriously ill or dies. A divorce may qualify for an exception, but only in certain cases.

SHORT SALES

The roadblocks for having a short sale in your credit history can be less severe, and in some cases, waived altogether.

FHA requires borrowers who weren’t paying their mortgage when they sold their house to wait three years before they can qualify for a home loan. That time penalty may be waived in certain cases, including long-term job loss.

There is no FHA time penalty for homeowners who made their house payments in the 12 months before their short sale.

The size of a down payment can also shorten the waiting period.

A down payment of 20 percent or more will cut Fannie Mae’s time penalty on a borrower with a short sale down to two years from seven. Buyers who put down 10 percent can qualify after four years.

CREDIT SCORE

It’s no longer just a waiting game for homeowners caught up in the earliest stages of the foreclosure crisis in 2007 and 2008.

There’s still the impact a foreclosure or short sale has on one’s credit score — still very much a factor in qualifying for a loan.

Like most credit blemishes, foreclosures and short sales will remain in your credit history for seven years.

As a general rule, the higher your FICO score, the more it will drop as a result of a bad debt, said Barry Paperno, consumer affairs manager for MyFICO.com, the consumer website for FICO.

FICO credit scores range from 300 to 850. In simulations, a foreclosure sent a FICO score of about 720 down to as low as 570 and took about seven years to recover fully, assuming everything else being equal.

Still, there are steps one can take to burnish one’s tarnished credit rating.

_ While in the foreclosure penalty box, make sure to pay all your bills on time.

FREE 3 in 1 CREDIT REPORT