ESRI Study Finds Home‑Buying Process Fuels Overbidding and Stress for Buyers

A new study from the Economic and Social Research Institute (ESRI) has found that Ireland’s current home‑buying process is contributing to inflated prices, significant delays, and rising stress levels among purchasers. The research, funded by the Competition and Consumer Protection Commission (CCPC), highlights widespread misunderstandings about buyer and seller rights as well as the impact of auction-style bidding on final sale prices.

Auction Systems Driving Higher Prices

The ESRI’s Behavioural Economics Unit conducted a controlled auction experiment with 800 adults and found that open and online bidding systems—while perceived as more transparent—actually led to higher levels of overbidding. Many participants exceeded their original budgets and even bid above what they believed the property was worth.

Researchers attribute this behaviour to “auction fever,” where competitive pressure and loss aversion push bidders to escalate their offers. Each time a bidder is outbid, it can feel like a small loss, motivating them to continue raising their bid.

Gaps in Public Understanding

The study also uncovered significant gaps in public knowledge about the legalities of the home‑buying process:

• Only one in five people knew that estate agents can continue to market a property even after it goes “sale agreed.”
• Most buyers were unaware that they can withdraw from a purchase without penalty before contracts are signed.
• While two‑thirds of respondents understood that sellers cannot accept multiple deposits for the same property, many remained unclear about other key rights and responsibilities.

Delays a Major Source of Stress

Delays emerged as the most common and stressful issue for both buyers and sellers.

Among those who had purchased a home:

• 63% experienced at least one major hurdle.
• This figure rose to 80% for buyers who purchased within the last three years.
• One‑third of second‑hand buyers reported conveyancing delays.
• More than a quarter of new‑build buyers faced delays moving in.

Other challenges included unexpected additional costs, sellers pulling out of deals, and discovering issues with the property after the sale.

Call for Reform

Dr Deirdre Robertson, Senior Research Officer at the ESRI, said the findings show that buyers are navigating a system they “may not fully understand,” with delays and bidding practices contributing to unnecessary stress and inflated prices. She noted that the most commonly used bidding systems “encourage people to overbid,” suggesting that reforms may be needed to create a fairer and more efficient process.