Estate Agents "advice"

Discussion in 'Investment Strategy' started by Squirrell, 2nd Mar, 2021.

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  1. Squirrell

    Squirrell Well-Known Member

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    Hi. As mentioned before, need more rooms so we are looking at either buy/sell,extension or knockdown rebuild. Big 1000sqm land, clinker renoed 20 years ago but still perfectly liveable for another 20 years for a small family. Got a couple of agents in for appraisals, both seemed to think we would overcapitalise with rebuild or extension as our street has an eyesore in it which puts off some buyers ( we dont mind it but houses in street prob 10pct less than than other streets because of it and are not as well maintained so street is a bit shabby but still ok). Id like to give them the benefit of the doubt, but as a general rule should i completely disregard what agents say as they just want a sale? They also recommended sell before buy.
     
  2. Sackie

    Sackie Well-Known Member

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    No. Doesn't make any sense to completely disregard their feedback. Listen, then DYOR.
     
    Last edited: 2nd Mar, 2021
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  3. unicorntears

    unicorntears Well-Known Member

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    It might depend on your relationships with them. My existing contacts actively told me not to sell last year, a fresh contact tried to convince me to sell a property for a 20% discount. *eye roll emoji*
     
  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Is it like asking a Barber if you need a haircut?
     
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  5. skater

    skater Well-Known Member

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    1000sq land and they say it would overcapitalise? What suburb are we talking about? That could mean a world of difference. Capital City, or out the back of Bullamacanka?
     
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  6. Squirrell

    Squirrell Well-Known Member

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    Melbourne. Boxhill area. Nrz.
     
  7. skater

    skater Well-Known Member

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    I'm no specialist on Melbourne, but I would presume that being that close that you would not overcapitalise by upgrading your home, especially with large land. Don't know what Nrz means, if that's relevant.
     
  8. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    If it's your PPOR and once upgraded you'd be happy living there for another 10-20 years then I think do what makes you happy and what you can afford.
     
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  9. Squirrell

    Squirrell Well-Known Member

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    Nrz is neighbourhood res zone. Which would allow 3 townhouses. Im investigating building ppor in front with enough room to subdivide back down the track.
     
  10. skater

    skater Well-Known Member

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    Now THAT sounds like good use of the land.
     
  11. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    I'm not familiar with Melbourne zoning but that does sound like the best of both worlds. Future proof to downsize the block in years to come or just knock off some debt and sell off (or build) in the rear.
     
  12. Brendon

    Brendon Well-Known Member

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    Are you sure with NRX you’d be able to get 3 townhouses on? I’m not an expert but I’d double check if that’s accurate
     
  13. Squirrell

    Squirrell Well-Known Member

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    I think i could, but the intent would be one 35sqm house at the front with a huge backyard for the next 10 to 15 years, and then have option to build a stand alone at the rear. From my enquiries it should be ok so long as i position front house to maximise space and leave enough room down side. Obviously would get planner advice before i sign anything.
     
  14. The Y-man

    The Y-man Moderator Staff Member

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    Ok, if it's Box Hill Vic, then it's all about land land land - and you have lots of of it. I'd actually agree with the agents in this case - the house is sort of an accessory so spending anything on it is probably "overcapitalising" - it'd be bright eyed bushy tailed (early or first time) developers you want to target.

    The Y-man
     
  15. Onyx_OCAU

    Onyx_OCAU Well-Known Member

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    The agent's telling you to sell before you buy because as soon as you've sold, they've gotten their comission and you're no longer tied together - they will no longer care about your predicament of having no house, and there being no good stock to choose from in this current market. You and the agent should write in the contract you and your family can stay at the agent's home until such time as you find a new place... see their tune change.
     
  16. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    The agent may have many reasons to suggest selling first.
    • Actual proceeds on sale are known and locked in assisting a future purchase - especially if it could sell above a reserve etc. That windfall may assista better purchase
    • No delays and less finance issues. Makes making a subsequent offer very easy
    • Less complicated and less anxiety
    • An extended settlement clause may be suggested and may be more palatable to a buyers than a lease back. No rent-back complicates matters
    • Buying a replacement is far easier than selling. You can be looking and ready to pounce.
    • Agent could (??) get a double whammy although unlikely you would be one of their homes.
    • Settlement or buyer loan approval issues wont destroy the chain. The new purchase wont be as "subject to finance". If the former property doesnt sell after purchase is committed it may affect finance. Bridging finance is now not easy to access and is very expensive
    You cant add a clause allowing occupancy as suggested. Instead you can reach agreement with a buyer that you can let the property. Many buyers may refuse and walk. It places complications that may limit sale. Especially if it is an auction.
     
  17. AlRoss0908

    AlRoss0908 Member

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    Doesn't make any sense for me
     

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