Any price you want - so long as it’s slashed
HENRY Ford was a shrewd operator. Having made his fortune in the motor trade, he paid a highly -publicised visit to Co Cork in 1912 in order to seek out his family roots at Lisselane.
After visiting the empty tenant cottage in which his father William had been born, Ford approached the owners — three local brothers — with the intention of acquiring it from them along with the tiny 30-acre holding on which it stood.
Local legend has it that instead of biting his hand off, the brothers instead approached the priests of the parish for advice. The priests told the brothers to hold out for a much higher price simply because this wealthy yank obviously had dosh in buckets.
But Ford wasn’t having any of it. He declined their opportunistically inflated price and he left Cork. But before he went he took out the hearthstone from the tiny derelict cottage and brought it back with him to America.
The following year Henry Ford commenced building his now famous Fair Lane mansion in Michigan. He built it with 56 rooms within 31,000 sq ft and he placed that hearth stone into the wall of one of the main receptions.
Common perception is that the rich have their money because they’re careful with it and usually they won’t easily be codded out of it. But it seems that as vendors, they can be even more optimistic and unrealistic about the true worth of their properties than the rest of us.
Back in Ford country the old lesson still hasn’t been learned, as evidenced from the recent news that Lisselan, the country estate in Clonakilty from which William Ford’s family emigrated, has finally been sold for a price believed to be in the order of €2.9m or less. The property, which includes a fairy-tale style French chateau and a nine-hole golf course on its 315 acres had been on the market for almost four years. The owner, also a millionaire in the motor trade, had initially sought a whopping €9m for the place. When no one came biting after three years (a hint that it was a tad overvalued?) that price came down eventually to €3.6m and finally Lisselan, at last, changed hands this month for a price reported at just under €3m.
Interestingly Ireland’s four most expensive houses for sale this year were also the most expensive homes for sale during spring 2017. Luggala at Roundwood in Wicklow went on at
€28m in February and this price hasn’t shifted, Harristown Demense in Kildare went on at €25m in September 2016 and that still hasn’t moved. Montebello at Killiney went up for €9m last year and Monte Alverno in Dalkey went on at €8.5m in April last. The latter had previously been placed on the market in early 2007 for €25m and was still on the market two years later in 2009, this time at less than half that — €11.5m.
The Ryan family famously placed the Lyons Demesne in Kildare (the former home of Ryanair founder Tony Ryan) on the market in 2009. It was reported in the British media at the time that they were seeking an eye-watering €80m. And this was in 2009, one of the worst of the downturn years for Irish property. The asking price was reported at €60m soon after and then reduced again to
€50m before it was finally sold in 2014 for less than €25m, entailing price cuts over a five-year period of €55m. What’s that about?
With property cycles turning over every six to 10 years, the long holdout can lose a fortune for pernickity owners. Sorrento House spent a lengthy cross-cycle period on the market after being placed for sale at €30m in 2006 after which a purchase attempt fell through at €20m/€22m (Sorrento was also being sold by a motor sector millionaire). It eventually sold in 2015 for almost half that — €10.5m — almost a third of the original price. But wouldn’t it have been wiser to sell the house at the height of the Tiger? Even if that meant taking €18 moreven €15m?
Last but not least there’s Michael Flatley, the world’s fastest tapper but one of the slowest vendors. Flatley placed his Castle Hyde mansion in Cork for sale in 2015 for a price reported at between €20m to €30m. Three years later it’s still for sale with no sign of any significant price cuts. How long should he wait before deciding that the global mansions market doesn’t believe his home is worth what he’s asking — even with his hugely impressive restoration work taken into account?
Selling a home in the top 1pc segment has often been described as a waiting game by agents at the top end. But it seems that Irish millionaires tend to wait around a lot longer. According to London -based Knight Frank, which specialises in top 1pc properties worldwide, homes priced over US$20m take about one year to sell on average while those priced over US$50m tend to take two years. By this yardstick, it takes Irish millionaires about twice as long to get realistic about price and cut it to the point of selling.
Estate agents will tell you most of us believe our homes are worth more than the market will pay. But unlike the wealthy, we plebians cotton on to reality within months rather than years. When it comes to selling up we’re far more realistic. Either that, or our appointed agents are not half as worried about telling us sooner that we are wrong.
It takes Irish millionaires about twice as long to get realistic about price