What does an auctioneer's commission get determined by?

A house myself and my girlfriend wish to buy has a current bid in at €320,000. The house comes with a fair bit of contents e.g. washing machine, cooker, a couple of beds and some bits and pieces. As first time buyers we said we'd bid €321,000 but only as €317,500 for the house and €3,500 for contents. The auctioneer really didn't like this and eventually said she'd ask the owner but we don't believe she will.
We were wondering maybe if our bid gets accepted that she only gets commission on the €317,500 and nothing on the €3,500 for contents while if the other bid gets accepted she would get commission on the €321,000. Does anyone know if this is the case?

Also, what can be considered contents?
She said only furniture but I said the fireplaces and garden shed could be considered contents as well.
Other people have told me that everything outside of the bricks, mortar, wiring and plumbing could be considered contents e.g. Extractor fan, shower, sinks, patio, garden plants, carpets, lightshades, etc.
Is there any official list of what contents can include?

Joe Nonety said:

A house myself and my girlfriend wish to buy has a current bid in at €320,000. The house comes with a fair bit of contents e.g. washing machine, cooker, a couple of beds and some bits and pieces. As first time buyers we said we'd bid €321,000 but only as €317,500 for the house and €3,500 for contents. The auctioneer really didn't like this and eventually said she'd ask the owner but we don't believe she will.
We were wondering maybe if our bid gets accepted that she only gets commission on the €317,500 and nothing on the €3,500 for contents while if the other bid gets accepted she would get commission on the €321,000. Does anyone know if this is the case?

Also, what can be considered contents?
She said only furniture but I said the fireplaces and garden shed could be considered contents as well.
Other people have told me that everything outside of the bricks, mortar, wiring and plumbing could be considered contents e.g. Extractor fan, shower, sinks, patio, garden plants, carpets, lightshades, etc.
Is there any official list of what contents can include?

Click to expand...

2% of 3.5k is only €70... so I can't imagine that is the issue!

Presumably you're doing this (splitting the purchase into house - under €317,500 - and contents - the balance) in an attempt to avoid stamp duty by coming in under the €317,500 exemption threshold for first time buyers of a second hand house? Are you sure that this strategy works? I seem to recall doubts about it myself. Has your solicitor advised you on this?

No, a previous auctioneer told us when we were looking at a house that was at €317,500. I had forgotten that! Why would an auctioneer be recommending that tactic if its no extra benefit to him.

Sorry - I don't understand your last post. Maybe you can clarify? What tactic is the auctioneer (which one?) recommending? As ever don't take what an auctioneer says as independent "advice" since they have a vested interest in selling you something.

Cm ,
The contents arent part of the house and are not liable to stampduty. IF the contents are worth the balance in this case €3500 I cant see it not working.In saying that I am not a solicitor and leave all stamp duty calcs to them.

jem said:

Cm ,
The contents arent part of the house and are not liable to stampduty. IF the contents are worth the balance in this case €3500 I cant see it not working.In saying that I am not a solicitor and leave all stamp duty calcs to them.

Click to expand...

Yes - but the tactic of splitting the deal into two contracts (one for the house and one for contents) was mentioned before and, if I recall correctly, questioned as to the legitimacy of using this to squeeze into a lower SD bracket (ideally 0%) than might normally apply. Either this is not kosher at all or else the total of the two contracts is what determines the SD rate applicable even if the SD is calculated on the house price only. For example, in this case the total price of €320K might set the SD rate (3% for FTBs) even if this rate is only applied to the house price of €317.5K. Ultimately I seem to recall that there were serious question marks over using such a "split" house and contents transaction in order to artificially avoid SD. I could be totally wrong though.

As I remember the discussion, there is no problem with this as long as the contents are not artifically overvalued just to get under the mark. As regards garden shed, fireplace, no problem with including these as you could of course ask them to remove these items when they are leaving the house as you may not want them...they are removable.

A solicitor should be able to answer this once and for all.

OK thanks, will get back to ye after chatting with solicitor.

Sorry - I just meant that one of the solicitors who contribute to AAM might be able to comment but there's no harm in seeking advice from your own too.

Heres one I made earlier........

There is always a lot of confusion surrounding stamp duty thresholds, consideration for property, consideration for contents etc.,etc.

The stamp duty thresholds are fixed and immutable. If you go above them, you pay stamp duty at the higher rate. If you apportion a pruchase price into consideration for house and consideration for contents, and the effect is to breach a stamp duty threshold then you pay stamp duty on the consideration for the house only but at the higher rate applicable to the total transaction : pay higher rate on lower amount.

This is the relevant Revenue Cert. to be inserted in the Deed:

2. that the consideration (other than rent) for the sale is wholly attributable to residential property and that the transaction effected by this instrument does not form part of a larger transaction or series of transactions in respect of which the amount or value or the aggregate amount or value of the consideration (other than rent) which is attributable to residential property or which would be so attributable if the contents of residential property were considered to be residential property exceeds €254,000.

Series of transactions would include a separate contract for contents.

Its important to recognise that there was an old view that you could legitimately apportion the purchase price between house and contents: the difficulty has always been with what is a legitimate value for contents? And the practise had grown up that people were trying to apportion silly money for contents to evade stamp duty. This is what Revenue have sought to stamp out. Judging by the number of times it crops up on this site though I do wonder if its reaching peoples consciousness.

Moral of the story: if you are buying a property and it is likely to breach the stamp duty thresholds, do your sums and see what you can afford and beyond which you will not go. You cannot legitimately enter into a series of contracts to keep contents separate. That is a fraud and is an unenforceable contract. And I know that people do it - but that does not make it right.


mf

Thanks mf1 - that more or less tallies with my, somewhat unsure, understanding of this whole area as outlined above.

To get back to the query about the auctioneers fees. As we are all aware, it is not uncommon for an auctioneer/estate agent to try and push the price over a percentage threshold in order for them to be able to gain the best fee price.

The auctioneer's fees are normally set under a contract which is signed, between the vendor and the agent - if the estate agent follows standard practice. This would set out the fees, be it set or a percentage, and the marketing costs and the extent of the contract.

It is not uncommon for these terms and conditions to include percentage bonuses or lump payments for the auctioneer/estate agent for pushing the price over a set limit.

Hope that answers the query in the title!