Lack of legal literacy causes home-buyer distress
The home-buying experience in Ireland is becoming objectively more difficult, according to ESRI research.
Ireland’s home-buying process is marked by auctions that induce overbidding, misunderstanding of rights and responsibilities, and delays after sales are agreed, according to research from the ESRI’s behavioural research unit.
The research, funded by the Competition and Consumer Protection Commission (CCPC), draws on a nationally representative survey of 800 adults who completed a controlled auction experiment, and a detailed survey of buyer and seller experiences and expectations.
An overhaul is required to combat a system that encourages reckless overbidding and leaves consumers in a state of “stressful limbo”, according to the study.
It paints a picture of a market defined by ‘”auction fever”, a widespread misunderstanding of legal rights, and systemic delays that have worsened significantly in recent years.
The research found that 63% of all past property buyers experienced at least one major stressful hurdle.
However, that figure spiked to over 80% among those who purchased a home within the last three years.
The primary driver of this stress is conveyancing delays.
One-third of second-hand buyers reported significant delays in the legal transfer of property, while over a quarter of new-build buyers faced delays in moving into their new homes.
Bottlenecks
These bottlenecks were cited as the single most common stressful problem for both buyers and sellers alike.
The report also noted a ‘trust deficit’ in the market. Previous CCPC data indicates that only 22% of people trust estate agents, and just 16% trust second-hand sellers.
In contrast, solicitors and engineers remain the most trusted figures in the process.
The study’s bidding experiment tested how different systems influenced buyer behaviour.
The results revealed a sharp disparity between what Irish buyers believe is a ‘fair’ system and what actually results in the lowest prices.
While 50% of participants favoured visible online bidding platforms for greater transparency, the experiment proved the opposite.
Online auctions actually inflated prices the most, as the visibility of rival bids triggered ‘loss aversion’ and ‘herding’ behaviours.
In these open formats, buyers were significantly more likely to exceed their original budgets and bid more than what they believed the property was actually worth.
Conversely, the ‘sealed bid’ system, where bidders submit a single offer without knowing what others have bid, resulted in the lowest price inflation.
Despite its effectiveness at cooling the market, this system remains less popular with the public due to the perceived lack of transparency.
‘Sale agreed’ misconception
The report identified a critical knowledge gap regarding the legal status of a property once an offer is accepted.
In the Irish market, ‘sale agreed’ is a non-binding stage, yet many buyers operate under the false impression that the deal is secure.
While over two-thirds of respondents correctly identified that it is illegal for a seller to accept multiple deposits for the same property, only one in five knew that estate agents can legally continue to market a property and accept higher offers (‘gazumping’) after it has gone sale agreed.
Most are unaware that a buyer can withdraw from a sale without any financial penalty at any point before the final contracts are signed.
This lack of legal literacy often leads to emotional and financial distress when transactions collapse late in the process, the study states.
‘Conveyancing limbo’
In response, the CCPC has issued a series of recommendations:
- Legislation for pre-sale information: The CCPC wants a mandatory ‘seller's information pack’ with essential documents – such as title deeds, planning permissions, and property tax compliance – as marketing starts, rather than after a buyer is found,
- A new conveyancing profession: To break the legal logjam, the watchdog recommends creating a dedicated profession of conveyancers. This would move the process away from a solicitor-only model, increasing competition and potentially lowering fees and timelines,
- National completion targets: The CCPC supports a target of eight weeks to complete a property transaction, moving away from the current indefinite timelines,
- Property condition surveys: The research showed strong public support for sellers providing a condition survey to all potential bidders, rather than each individual buyer having to fund their own survey for a property they may not even win.
ESRI’s Dr Deirdre Robertson noted that the current system effectively penalised inexperienced buyers.
Financial risk
"People are navigating a system they may not fully understand and increasingly experiencing stress," she said.
"Our findings suggest that the most commonly used bidding systems encourage people to overbid, inflating prices and increasing financial risk.
CCPC’s Simon Barry urged caution. "Buying a home is the biggest purchase most people will ever make. It is vital that buyers understand the bidding system they are entering and stick to their budgets. These findings reconfirm that the conveyancing space is ripe for reform."
The findings of this report tally with the CCPC’s 2025 report on the residential property market, which found low trust and transparency in the home-buying process.
Law Society Director General Mark Garrett and Eleanor McKiernan (Conveyancing Committee) recently (2 July 2024) told the Joint Oireachtas Committee on Justice that the current process was dysfunctional and, at times, chaotic.
The CCPC also hosts a homebuyer’s guide on its website.