Sale at 300 East 93rd Street, #36ABCD

REAL ESTATE | August 10, 2008 Neighborly Competition By TERI KARUSH ROGERS When several apartments in one building are for sale at the same time, it’s not necessarily a bad thing. Sellers can work together to mutual advantage even as they play up what sets their units apart. http://www.nytimes.com/2008/08/10/realestate/10cov.html?ex=1218945600&en=576c438238dc98ce&ei=5070&emc=eta1... [more]

REAL ESTATE | August 10, 2008 Neighborly Competition By TERI KARUSH ROGERS When several apartments in one building are for sale at the same time, it’s not necessarily a bad thing. Sellers can work together to mutual advantage even as they play up what sets their units apart. http://www.nytimes.com/2008/08/10/realestate/10cov.html?ex=1218945600&en=576c438238dc98ce&ei=5070&emc=eta1 August 10, 2008 Neighborly Competition By TERI KARUSH ROGERS IN real estate, more is almost always better when it comes to such things as light, square feet, closets and bathrooms. But to buyers (and, by extension, to sellers), the same does not necessarily apply to similar apartments for sale in the same building. In the current Manhattan market, it is taking longer for apartments to sell, and it is not uncommon for apartments next door to each other or on different floors to hit the market at the same time. Some brokers say that there is more to be gained by (cautiously) working with the competition in setting prices and marketing strategies than by going it alone. In the end, sellers want to make sure their place doesn’t compare negatively, especially since an apartment with an in-house rival is already at a psychological disadvantage. “All of a sudden it goes from being a home or a special space to a cookie-cutter apartment,” said Bahar Tavakolian, an associate broker at the Fox Residential Group, because buyers forget that apartment buildings are by nature a collection of clones and cousins. “It’s like when you walk into a party wearing the same dress as someone else, you get uncomfortable.” Buyers confronted with more often wind up doing less, in the form of lowball offers or none at all. Some even grow suspicious. “Buyers are funny animals — they’re always looking for reasons not to buy,” said Michele Conte, the executive vice president for marketing and sales at Stillman Development International, which builds luxury condominiums, and a former broker at Brown Harris Stevens. “Especially if there are several apartments on in a building, they think there might be a problem, like an assessment that is about to start.” (In fact, brokers say that several apartments for sale at once in a 150-unit building is generally pure coincidence, but four units in a single line of 20 apartments could be a red flag.) Still, there are ways that sellers can mitigate the doppelgänger effect. Some, like staging and marketing an apartment in deliberate contrast to a rival, aim to defuse any cookie-cutter impression. Other tactics, like making friends with the competition, can maximize exposure to buyers and provide valuable reality checks. They might also cut down on slander and other forms of internecine warfare that can occur when competition lies too close to home. “Brokers will sabotage anything,” Ms. Conte said. “If you say, ‘Well, the one upstairs has been on the market for four months already at only $10,000 more,’ the broker will say, ‘Oh, well, they have a terrible leak.’ ” Other brokers talked about having traffic to their open houses siphoned off in the lobby by the competition and of agents who act like the undercover variety, posing as potential buyers to perform reconnaissance. To head off such behavior, many brokers recommended sharing information about offers and giving advance notice on pricing, especially if your price is lower than a rival’s. “You’re kind of undercutting your neighbor,” said Deanna Kory, a senior vice president at the Corcoran Group. “So a lot of times I find it’s a very good strategy to at least connect with the other person and tell them why we are coming on at a certain price. Because one of the things you don’t want is a price-lowering feud where people are angry with each other and making barbs about the other property.” Cooperation has other payoffs, too. For instance, many brokers stress the importance of co-ordinating marketing efforts like open houses: more people will turn out when they can see two or three apartments in the same building. “It’s familial and competitive, like gas stations across the street from each other,” said Arlene Weissberg, a vice president at Corcoran. Ms. Weissberg is representing one of three one-bedroom duplexes on the market since early spring in a prewar co-op at 170 East 88th Street, between Lexington and Third Avenues. (“Three young couples all had babies around the same time,” Ms. Weissberg said by way of explanation.) She and the other brokers — Beth Ferrante at Corcoran and Brett A. Miles at Brown Harris Stevens — refer buyers back and forth among the three apartments, which range in price from $899,000 to $1.075 million. “Now that there are computers, it’s out there — you can’t hide a listing,” she said. “We’ve been trying to support each other because we figure if one apartment moves along, it helps the others.” (Many brokers said that one sale will often engender the next, breaking a stalemate of indecision and doubt.) “It was a little weird in the beginning,” said Stacy Fogarty, one of the owners of the three apartments. “But it seems to be increasing foot traffic, and I think it kind of helps give people a vision of what you can do or undo, like to see what happens if you put in a regular staircase instead of spiral staircase.” Some sellers practice extreme cooperation. When JoAnn Melendez decided to sell her two-bedroom, two-bath condo on East 130th Street three months ago, the first person she turned to was her friend and -door neighbor, whose three-bedroom, two-bath apartment had been on the market for several months. He suggested that she hire his agent, Maggie Ocampo of Time Equities Residential Brokerage, who recommended that the pair market their apartments as a possible combination as well as individually. “When we show them together we get a lot more feedback,” Ms. Melendez said. She and her 6-year-old daughter, Sophia, plan to move in with her ailing mother on the Upper West Side. So far, the neighbors’ united front hasn’t paid off. Ms. Melendez has dropped the price on her 926-square-foot apartment from $575,000 to $549,000. Her neighbor, Armen Benson, has also lowered the price of his 1,140-square-foot unit, from $695,000 to $649,000. Both sellers bought in 2005 and hope to break even on the sale. They believe that their comradely approach will ultimately serve them, so much so that they are looking forward to adding a third neighbor to their ranks: a slightly smaller two-bedroom apartment two floors below is expected to come on the market later this month. Although some brokers cozy up to rivals, others approach the situation more like warriors, starting with a period of intense reconnaissance. “You have to study the other apartment almost like it’s the enemy,” said Jacky Teplitzky, a managing director at Prudential Douglas Elliman who happens to be a former sergeant in the Israeli army. “You have to find out how long it’s been on the market, whether it’s had price reductions, how many showings they’ve had, or if they’ve had any offers. Then you decide on a strategy of how to differentiate yourself and do things your competition isn’t doing.” To sell a four-bedroom, four-bath apartment in a new condominium building this spring, Ms. Teplitzky went to considerable effort and personal expense, organizing a marketing barrage to set the 15th-floor unit apart from a carbon copy eight floors below. First, she went several leaps beyond hiring an interior stager. She hired an interior designer to corral four design showrooms to take on sections of the apartment, transforming it into a show house of sorts. Her publicist, Jennefer Witter of the Boreland Group, succeeded in getting the apartment featured on a local Sunday morning television show about luxury real estate. Meanwhile, Ms. Teplitzky put on a catered brunch at an open house for buyers. To draw brokers, she held a second event to which she invited an expert to talk about how the Bear Stearns collapse might affect the real estate market. “The rule is that you need to be ahead of your competition,” Ms. Teplitzky said. “That’s the only way you can lure and win buyers.” The condo, listed for $7.5 million in March, sold for $6.995 million in June. The apartment eight floors below was reduced from $6.985 million to $6.495 million and has since been withdrawn from the market. Dorothy Somekh, a senior vice president at Halstead Property, the agent for the competing space, said: “The reason I couldn’t do what she did was that my sellers lived there and had spent a few hundred thousand dollars in upgrades that weren’t all in yet. There were wires hanging everywhere, so I couldn’t even stage it.” Her clients plan to put the apartment back on the market in September, she said, after the improvements are completed. While brokers don’t usually go to Ms. Teplitzky’s lengths, most acknowledged the increasing value of staging an apartment, to show it off to best advantage. Staging costs about $1,000 to $4,000 for labor, plus materials and rentals, said Barbara Brock, the president of A Proper Place, a Manhattan staging company. Deal sweeteners, such as throwing in a storage unit that could otherwise be sold separately, can also serve to distinguish an apartment. So can astute consideration of commissions. Sellers who negotiate lower commissions with their brokers may find themselves effectively blacklisted, as other brokers steer their clients to listings that have standard (and larger) commissions. “Brokers are not bad people — they’re just self-serving,” Ms. Conte said. “If you’re 21B and you’re paying 5 percent to your broker and 23B is paying 6 percent, very often buyers’ brokers won’t even tell their clients about your apartment. I’ve absolutely seen that happen — they’ll only take clients to 21B if they don’t like 23B.” (With this line of reasoning, a truly motivated seller might consider offering a larger commission than the standard, usually 6 percent.) At a minimum, sellers ought to play up anything that sets their apartment apart, in a positive sense, from their neighbor’s. “Every apartment has something that makes it better in one way or another,” said Judith Saunders, a senior vice president at Halstead Property. “One may have a stainless-steel kitchen, whereas another may be more traditional. There can also be differences about what floor it’s on, what condition it’s in, what direction it faces.” Still, no matter how expertly an apartment is staged and marketed, competition in the same building typically exerts downward pressure on prices. “It’s always better not to have competition, but one or two more units is not terrible,” Ms. Conte said. “Anything over three units, and I think the buyer is going to have a question, and you’re going to have to really battle each other’s price.” That can be devastating when a rival is desperate for a quick sale. “Say you have a listing for $3 million, and someone comes on with a similar line and property who’s just been transferred to San Diego and needs to sell soon,” said Brian Lewis, a senior vice president at Halstead. “They come in absurdly below, like $2.3 million or $2.4 million. At that point the seller may decide to temporarily take theirs off the market.” As for determining whether to follow a neighbor’s price cut, “there are many, many factors that go into making a decision,” said Wendy Maitland, a managing director of the ID Marketing Group of Brown Harris Stevens. She ticked off some of them: “How long it’s been on the market, how it was originally priced and what is the motivation of the seller — some have no time pressure whatsoever and can wait to get their price.” Some brokers, like Ms. Kory of the Corcoran Group, said that pre-emptive price cuts were a useful way to test the market. Last April, within a month after listing a renovated two-bedroom, two-bath co-op with a river view on the 14th floor in a prewar building on Riverside Drive in the 80s, Ms. Kory found herself competing against two similar but lower-priced apartments in the same building. She advised her clients to drop their price from $2.195 million to $1.995 million, the same price as a sponsor apartment on a higher floor that would require no board approval. Even so, the lower price was $300,000 more than that for a similar adjacent unit in need of significant updating. “Our claim to fame for marketing this apartment was that it was beautifully renovated,” Ms. Kory said. “The apartment next door had a lower price, but the kitchen was slightly larger, by enough that it drove people crazy because they couldn’t make a decision between ours and theirs.” The apartments lingered until the price of the adjacent unit was cut to $1.695 million in late June. It immediately drew multiple offers. “We waited until they got into contract, and then we strategically lowered the price to $1.895 million in the second week of July,” Ms. Kory said. Her clients wound up with four bidders, including ones who lost out on the neighboring apartment. “That’s an advantage when you have two or three apartments on in a building,” she said. “You have an amazing ability to listen to the market.” For similar reasons, most brokers said that it’s better not to be the first seller to put an apartment on the market. “It’s better to be the second,” said Ms. Saunders of Halstead, “because then you know exactly what your competition is and you know how to price. Pricing isn’t an exact science, and you may agree or disagree, but it gives you some kind of point of reference.” [less]