Estate agent advising not to sell?

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whizzbang

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A friend of mine bought a house up in Dundalk about 2 years ao and has decided to sell as the rent isn't covering the mortgage. So he rang up the Estate agent and they advised him not to to sell as the market is going to continue going up. Does this seem odd to anyone? Why would an estate agent turn down a job? Are they that busy?
 
They might be trying to shift their own stuff first,does seem odd though that they'd turn down business.Is there loads of places for sale in the particular estate ?
 
there are 5 houses for sale in Dundalk town according to myhome.ie so I guess business is not exactly booming...
[edit] there are about 10 on daft [/edit]
 
Don't see how an estate agent could prophesise this.

I also think that it is bad advice - if the rent is not covering the mortgage that means your friends' investment has a negative yield and is dependent on Capital appreciation for returns. (Which is very risky especially in the current climate).
 
It does seem weird, I'm just wondering are they seeing a flow of houses going up for sale and they are trying to stem the tide to prevent a glut of property? Not sure how likely it is but can't see why else they would want to do it?
 
I think thats it - that particular EA may have been quietly informed that some really good and easy to sell properties will be coming on the market soon due to investors bailing out and he/she wants to keep his/her books clean so as to concentrate on selling the "sure things" without having (no disrespect to your friend) harder to sell properties hanging around their windows ??

I really don't understand whether or not the current housing market is good or bad for Estate Agents, I read recently that CBRE Ellis Gunne have sold off their residential property arm due to losses suffered !!
I understand the increased competition amongst EAs but their commision must have increased astronomically over the last few years.

Would a crash be good or bad for them ?
 
kane3000 said:
Would a crash be good or bad for them ?
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Bad, I would think. Estate agents get work from sellers but only get paid when the buyer comes into the equation. More sellers (who are trying to bail from a falling market) would mean more work. Less buyers (who are waiting for the bottom of the market) would mean that there would be less payments coming in. More work for less money doesn't sound too good.

whizzbang, I think your friend should ask to get that advice in writing from the Estate Agent.
 
Afuera said:
whizzbang, I think your friend should ask to get that advice in writing from the Estate Agent.
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Good thinking, it would be interesting to see the reply!
 
could be that their office is far from the house and they just couldn't be bothered doing the viewings.
lower hanging fruit etc.
 
Resident said:
could be that their office is far from the house and they just couldn't be bothered doing the viewings.
lower hanging fruit etc.
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true true, would they ever suggest a closer agent? Or would they rather sell their own child? (they are estate agents after all)
 
kane3000 said:
Would a crash be good or bad for them ?
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volume is crucial - they have to shift to make their money. That's why when the market turns they can become agents for good (buyers perspective) and pressurise sellers into reducing prices further in order to move the property.
 
A salesman refusing the sell a product?? seems rather odd, especially when salesman is mainly paid on commission..

So he rang up the Estate agent ...
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She would phone few EAs and see if they also turn down her business. I doubt very much....
 
being from dundalk and still living here i can tell you all that this town is BOOMING! house prices are crazy and the new motorway to the north of ireland is making things even better
 
Not exactly answering your query but I hope you /your friend are aware of the tax implications of selling property. (CGT)

I hope that your friend is making annual tax returns in relatiion to the profit on rental income. (Remember it is only the interest on the mortgage that is allowed plus other allowable expenses) See [broken link removed]

If your friend is paying off the mortgage over a number of years then perhaps he/she should consider changing to an interest only mortgage even if it is only for a short term. Try and find a position your friend is comfortable with.
 
asdfg said:
I hope that your friend is making annual tax returns in relatiion to the profit on rental income. (Remember it is only the interest on the mortgage that is allowed plus other allowable expenses) See [broken link removed]
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I'm pretty sure he is not registered for any tax or anything. And so as far as the revenue are aware it is his Personal Residence. He has been living in a work provided flat for the time of his ownership. All very dodgey i know but I'm not sure there is anything I could say that would enlighten him to his moral obligations ;)

As for interest only mortgage I think he reckons the market might turn in the near to medium term future so he is just going to sell it and move on to the next thing. I also think he might be leaving the country in a while so that probably has something to do with it as well.
 
I also take it that he did not pay stamp duty on the property. Revenue can charge heavy penalties and charge a fairly high interest rate charged on a daily basis.
 
asdfg said:
I also take it that he did not pay stamp duty on the property. Revenue can charge heavy penalties and charge a fairly high interest rate charged on a daily basis.
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yep, first time buyer. ( didn't live there for 5 year first so he is liable stamp duty clawback if he admits it to the Revenue) how likely is he to get caught do you think? so far as I am aware the Revenue think he is living there on his own.
 
Who knows? How many bogus non resident account tax evaders assumed that they would never be caught?
 
ClubMan said:
Who knows? How many bogus non resident account tax evaders assumed that they would never be caught?
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True, true. How could he be caught? the only way I can think of is that the revenue will look at people who are getting regular payments into their accounts (rent) from people they didn't have any relationship with.

Or maybe the renters could rat him out to the PRBT? I think he gives them a good rent rate so they will not claim the tax relief.

Any other way?
 
There are innumerable possibilities including the ones above. Don't forget that Revenue are getting better at profiling taxpayers and singling out some for audits where there may be circumstantial evidence of evasion. Hopefully they catch up with more spongers sooner rather than later and stop them ripping the rest of us off.
 
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