Property Advice session. The client

A man his early sixties booked a property advice session with me this week. I’ll call him John ( not his real name). John owns two properties in Dublin, a big one and a small one.  He lives in the big one and his young adult son who’s working and solvent, lives in the small one.  John has no mortgage on either property. His thinking had always been that he would, when older, sell the big house, realise a decent size nest egg and move to the small house. John’s now at the point where the big house is too big and a nest egg would come in handy.

Why did he book a property coaching session?

John phoned me because he was feeling guilty that if he sells the big house in order to move into his small house, his adult son, who lives in the small house will then need to move out and find somewhere of his own either to rent or to buy. Right now there is an unprecedented shortage of homes on the market in Dublin, so John's son is almost certainly going to face quite a challenge when looking for a home..  John wanted my thoughts on whether he should wait for a year or two before selling the big house and moving into his small house.  He was aware that this is a good time to sell a property, but equally aware that it’s a difficult time for his son to buy or rent.

John was hoping that if he waited for, say two years, his big house would have appreciated in value and there’d also be a bigger supply of homes on the market for his child to buy or rent.   When he phoned he was really hoping that I’d think that this scenario is likely and that it would indeed be a good idea to wait.

My advice

• In an increasingly volatile world, we can’t be sure of anything. I would not just assume that prices will continue to rise or having risen, stay high. So I didn’t think John could comfortably rely on prices rising. My thinking was that if John is happy with the price he’d get for his big house in todays market, then he should go ahead and sell it today. It’s quite possible that a major world event could happen or new legislation be introduced in the next two years which could negatively impact property prices. We’ve certainly had good examples of such world events in the form of Covid, bank collapses, government imposed rent controls which affect capital value. etc.

• Ideally we all want to sell when prices are high and buy when prices are low. However unless we’re prepared to have many years pass between the date we sell one home and the date we buy another, we can’t do both. We’re either in one property market or another. It’s either a strong sellers market or a strong buyers market. It’s not really possible for it to be both. So John’s proposal to wait a few years to sell his big house at a price that is as high or higher than he could get for it in todays market in the hopes of a bigger supply of reasonably priced houses for his son to buy, is not likely to be a successful one. A market that will provide more affordable housing for his son is likely to a market that will give John a lower price than he’d like for his big house. So waiting a few years to sell the big house is in my view only pushing a problem down the road

• You can’t hold off making a decision on the basis that everything will remain the same except the one thing you want to change. We can make the mistake of assuming that all conditions will remain constant except the one thing we want to change eg. John is hoping for one condition to change eg. an increased supply of affordable housing for his son in a few years. However he is also assuming that he, John will continue to have good enough health to make a move in a few years. He’s assuming his son will still have a job in two years and be still able to afford to move out. etc My thinking is that often when one condition changes over time, so too do others that we might not have expected. So my suggestion is that while John can sell, wants to sell and is healthy enough to sell the big house and his son is healthy and solvent enough to find ( albeit with a good bit of difficulty) a place to rent or buy, then the time to act is now.

Last word to Shakespeare who said that “there is a tide in the affairs of men, which when taken at the flood, leads onto fortune”. When it comes to property decisions my view is that the “flood” is when you know for sure that you want to buy or sell, and you have the power, the time and the health to do it . Then you should just do it.

What do you think? I’d love to hear from you.

Would you like to book a one hour property advice slot with me. Book here