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From today's Irish Times:
Overseas buyers' dreams turn sour
Some investors are complaining of their experiences with property company MRI, writes Paul Cullen , Consumer Affairs Correspondent
Clients of one of the world's largest overseas property companies have accused it of resorting to pressurised selling, over-optimistic claims about the prospects of property locations and a lack of customer support once they agreed to buy.
The Irish Times has spoken to a number of dissatisfied customers and former staff of MacAnthony Realty International (MRI), which is owned by Dublin-born, Marbella-based Darragh MacAnthony (31). Some of their stories, which include claims they paid over the odds for their property, and faced unforeseen additional costs, are told below.
Some customers claim they were promised guaranteed rental streams for their investments which have not materialised. Others have suffered financial problems after using their money to put deposits down on multiple apartments in the - false - expectation that rising property values would allow them sell on some of the properties at a profit, before completion of sale.
There is no suggestion of anything illegal involved in these transactions and the usual principle of caveat emptor - buyer beware - applies. Most of those who spoke to this newspaper admitted they lacked previous experience of buying overseas and some said they were naive in their approach or were, for personal reasons, unable to devote time to sorting out difficulties when they arose.
However, a common thread is the difficulty they experienced in getting MRI staff to act on their behalf once they paid a deposit on a property, a factor which was made worse by constant changes in staff. Customers found themselves bombarded with calls from other MRI staff selling further properties or other services, even when difficulties arose with their original purchase.
MRI HAS SOLD thousands of properties to middle-class Irish customers, mostly through property roadshows around the country. Consumers are not always aware that the exhibitors at these shows are usually either owned by or linked to MRI.
In 2006, the Advertising Standards Authority upheld a complaint from a rival who claimed MRI was misleading people by giving the impression its Bulgarian Property Expos involved many different agents when, in fact, all belonged to the MRI family.
At the expos, interested customers sign up for one of the company's inspection trips to an overseas property destination. Sales are usually made during the pressure-cooker atmosphere of these short trips. "In their own right, the customers are often very smart people, but they're out of their comfort zone when they find themselves abroad and are presented with such a professional operation," says a former MRI agent.
"During the trip, the sales guys stuck to us 24/7 until we bought," one customer said. "Then we never saw them again."
Some customers end up buying more than one apartment off the plans after understanding they will be able to "flip" (sell on for a higher price) one of the properties later on in order to pay off their outstanding debt. This might be fine in a booming market, but is potentially ruinous for financially stretched investors when prices stall or drop. Some MRI customers found themselves spending more on legal services and furnishings than they expected, because the options recommended were more expensive than alternatives. Another complaint relates to the over-optimistic assessment by some MRI staff of the investment potential of properties. One buyer was told her ski apartment would increase in value once Bulgaria was awarded the winter Olympics; another was told a new airport was mooted near her apartment in a summer holiday resort on the Black Sea. Neither has happened as yet.
MRI says it is the world's number one family-owned property company, and claims it sells a property every 42 minutes. The company says it has many satisfied customers, and its website carries testimonials from a number of Irish clients.
HOWEVER, THE COMPANY has been the subject of sustained criticism on property and finance websites, a number of which have banned discussion of MRI after receiving legal warnings from the company's lawyers.
MacAnthony is a multimillionaire who moved with his family from Dublin to Spain at age 15 and set up MRI with a staff of two in 2000. Today, it sells property in 16 countries.
It is one of many firms operating in a largely unregulated business sector. "If you put a fiver into an Irish bank account, you're regulated," says Irish overseas property consultant Diarmuid Condon. "Yet you can send off a cheque for €500,000 to buy property abroad and you're not protected."
MRI's response
The Irish Times put a series of questions to MRI arising from the interviews with customers. In response, the company stated through its lawyers that the allegations made by customers were entirely unfounded, and that it was not in a position to respond fully unless it received more specific information on the individuals imvolved.
"MRI has over 20,000 clients spanning the last seven years, which simply would not have been possible unless it was providing an extraordinarily high level of customer satisfaction to its very large and burgeoning customer base," according to the statement. MRI is committed to providing a comprehensive, honest and professional service to all its customers, and has built a reputation on trust and reliability; indeed, it regards these as the cornerstones of its success. Customers come back to MRI time after time, which can only be because they have learned from their own experience that MRI acts with integrity and sets very high levels of customer service."
© 2008 The Irish Times
The following posts are case studies attached to the article
Overseas buyers' dreams turn sour
Some investors are complaining of their experiences with property company MRI, writes Paul Cullen , Consumer Affairs Correspondent
Clients of one of the world's largest overseas property companies have accused it of resorting to pressurised selling, over-optimistic claims about the prospects of property locations and a lack of customer support once they agreed to buy.
The Irish Times has spoken to a number of dissatisfied customers and former staff of MacAnthony Realty International (MRI), which is owned by Dublin-born, Marbella-based Darragh MacAnthony (31). Some of their stories, which include claims they paid over the odds for their property, and faced unforeseen additional costs, are told below.
Some customers claim they were promised guaranteed rental streams for their investments which have not materialised. Others have suffered financial problems after using their money to put deposits down on multiple apartments in the - false - expectation that rising property values would allow them sell on some of the properties at a profit, before completion of sale.
There is no suggestion of anything illegal involved in these transactions and the usual principle of caveat emptor - buyer beware - applies. Most of those who spoke to this newspaper admitted they lacked previous experience of buying overseas and some said they were naive in their approach or were, for personal reasons, unable to devote time to sorting out difficulties when they arose.
However, a common thread is the difficulty they experienced in getting MRI staff to act on their behalf once they paid a deposit on a property, a factor which was made worse by constant changes in staff. Customers found themselves bombarded with calls from other MRI staff selling further properties or other services, even when difficulties arose with their original purchase.
MRI HAS SOLD thousands of properties to middle-class Irish customers, mostly through property roadshows around the country. Consumers are not always aware that the exhibitors at these shows are usually either owned by or linked to MRI.
In 2006, the Advertising Standards Authority upheld a complaint from a rival who claimed MRI was misleading people by giving the impression its Bulgarian Property Expos involved many different agents when, in fact, all belonged to the MRI family.
At the expos, interested customers sign up for one of the company's inspection trips to an overseas property destination. Sales are usually made during the pressure-cooker atmosphere of these short trips. "In their own right, the customers are often very smart people, but they're out of their comfort zone when they find themselves abroad and are presented with such a professional operation," says a former MRI agent.
"During the trip, the sales guys stuck to us 24/7 until we bought," one customer said. "Then we never saw them again."
Some customers end up buying more than one apartment off the plans after understanding they will be able to "flip" (sell on for a higher price) one of the properties later on in order to pay off their outstanding debt. This might be fine in a booming market, but is potentially ruinous for financially stretched investors when prices stall or drop. Some MRI customers found themselves spending more on legal services and furnishings than they expected, because the options recommended were more expensive than alternatives. Another complaint relates to the over-optimistic assessment by some MRI staff of the investment potential of properties. One buyer was told her ski apartment would increase in value once Bulgaria was awarded the winter Olympics; another was told a new airport was mooted near her apartment in a summer holiday resort on the Black Sea. Neither has happened as yet.
MRI says it is the world's number one family-owned property company, and claims it sells a property every 42 minutes. The company says it has many satisfied customers, and its website carries testimonials from a number of Irish clients.
HOWEVER, THE COMPANY has been the subject of sustained criticism on property and finance websites, a number of which have banned discussion of MRI after receiving legal warnings from the company's lawyers.
MacAnthony is a multimillionaire who moved with his family from Dublin to Spain at age 15 and set up MRI with a staff of two in 2000. Today, it sells property in 16 countries.
It is one of many firms operating in a largely unregulated business sector. "If you put a fiver into an Irish bank account, you're regulated," says Irish overseas property consultant Diarmuid Condon. "Yet you can send off a cheque for €500,000 to buy property abroad and you're not protected."
MRI's response
The Irish Times put a series of questions to MRI arising from the interviews with customers. In response, the company stated through its lawyers that the allegations made by customers were entirely unfounded, and that it was not in a position to respond fully unless it received more specific information on the individuals imvolved.
"MRI has over 20,000 clients spanning the last seven years, which simply would not have been possible unless it was providing an extraordinarily high level of customer satisfaction to its very large and burgeoning customer base," according to the statement. MRI is committed to providing a comprehensive, honest and professional service to all its customers, and has built a reputation on trust and reliability; indeed, it regards these as the cornerstones of its success. Customers come back to MRI time after time, which can only be because they have learned from their own experience that MRI acts with integrity and sets very high levels of customer service."
© 2008 The Irish Times
The following posts are case studies attached to the article
