Since NYC real estate is a crazy and high-stakes game, who can blame property owners from checking and re-checking the value of their home? There comes a time, though, when hand-wringing and equivocating about the exact value of a condo or co-op or townhome must end, and that’s when you’re going to list it and need to decide on a price.
Stick to a number
Our first bit of advice to you, the seller, is to decide on a price and stick with it.
Once the listing is live and being advertised for all the world to see, there’s no turning back. Sure, there are new listings that get a price “increase” after hitting the market, but this is not the best approach. If you truly want to sell and you don’t want to alienate buyers who are hungry and perhaps even desperate for a fairly priced apartment, lock in on the best price and keep it there. That’s why the work and deliberation must come first.
In order to maximize a quick sale and to achieve the top end of the market value for your apartment, the pricing discussion with your broker must be under your belt well in advance of listing it publicly.
Though every seller dreams of attracting that eager buyer who is willing to pay more than the list price, or entertain a bidding war between buyers who’ve signed off on escalating clauses, the fact is that there’s usually enough data from market comparables to establish a price that will attract a buyer and also satisfy your financial expectations.
These comps are the tools for establishing that price, so it’s very important to take the time to analyze recent sales and building comps as well as other market conditions in order to help you make the best and most informed decision about price.
Watch other listings in your building
If you know you are likely to list your home soon, then you need to start watching other listings in your building and comparable properties around your building.
And while it’s true that data and market analyses suggest that there’s a science behind determining a list price, there’s also an art to the enterprise, especially in New York City where it is infinitely safer to hit the market at a slightly higher price and then come down rather than trying to raise the price once it has been listed.
Check recent sales in your line
If you are in the B line of your building, it’s likely that every B line apartment above and below yours has a similar layout, or at least they did at one point in time. Recent sales in your line are the best comps available because the square footage is the same, and the layout is likely similar, and the location can’t match more.
You will need to adjust for light and view as well as property condition. Standard price differential per floor is about $10K-$15K, assuming similar condition and layout. But as you clear certain milestones like a neighboring building or to gain a certain view, the number can be upwards of $50K per floor.
Checking your line is the best place to start and should give you a baseline for where your apartment’s sale should land in the value range.
Check the price per square foot in your building
If you can’t find any good comps in your line, look to your building as a whole. Pull the last six months’ worth of recorded sales in your building. It’s important to pull recorded sales and not simply the list price of for-sale apartments. A seller can ask the world, but that doesn’t mean he or she will get it.
The market value is the sale price of any arms-length transaction. The price per square foot in your building will provide valuable information. Look at the average and then look at recent sales that were both way over the average and way under the average and you will start to see how your apartment compares.
It’s not rocket science to figure out that a large, high-floor apartment with open exposures, a great layout and fully renovated will get the best price per square foot. Conversely, apartments in original condition on a lower floor will get a very low price per square foot.
Check neighborhood comps
If you can’t find a recent sale in your line or there just aren’t enough sales in your building, it’s time to look outside the building to understand neighborhood price per square foot and see some comparable apartments.
As an owner, you will likely know the top five buildings in your neighborhood. Look for the same class of building as well as buildings built in the same era as yours. It doesn’t make much sense to compare a 10-year-old condo building to your prewar co-op. In fact, never compare condos and co-ops.
Once you find a similar building, you will need to understand the differences between them. It could be about location, amenities, views or any number of things. Look for apartments with the same number of bedrooms, on a similar floor and with similar square footage. If you have private outdoor space, you’ll need to seek out a comp nearby.
A good rule of thumb for pricing outdoor space is to take half of the space and add it to the square footage, to better understand price per square foot. The more incorporated the outdoor space is into your apartment, the better. Buyers pay more for seamless access to outdoor space as well functional outdoor space.
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