Curious about how low is too low for first offer??

don't worry about laughter. do what you think is right.

p.s.they probably won't laugh but will use profanity...better yet, joke is on them....he/she who has the cash is king. please don't forget that.

thanks - I've mentioned to our broker that I really like a certain apartment, and she knows what my max budget is, but seems to be discouraging from me putting in a lower offer. I keep wondering if brokers are trying to keep prices up (or from further decline?) by not encouraging lower offers.

I dont understand why brokers are trying to keep RE prices up. They make money through commissions, so they want the apt to trade.

But they also know that the owner might be wacko and won't take a lowball.
In the end, they want the seller to go as low as possible, but they also want the buyer to think they HAVE to go as high as possible.

Freakanomics does a chapter on this. They'll tell folks on one side that market is hot, and immediately turn to someone else and say its not... whatever gets the sale.

But, big picture... big what you want. I'd go no less than 30% below 2007 comps. 35-40% if its something with a lot of comparable inventory.

It's not that brokers want prices to stay up. But a broker only earns a commission on a completed deal and a deal is much more likely to close if the buyer offers a higher price....hence the clear conflict of interest between a buyer and his/her broker that is just a fact of life under the present regime....

I would agree tend to agree with nyc10022, but the RE market inventory has grown abnormally large. I would bid 35% from 2007 comps as a start and 45%-50% if its a okay layout.

A huge percentage of the brokers I know bough properties as an investment...If they price low, they are bringing lower comps to the table, lowering the value of their own assets.

Wow - I don't know if I'm out of touch with reality or you guys are. A unit in our building just went to contract for 6.5% below 2007 comp. Nice building, 1-bed near Nat. History Museum. 40% down?! I just am not seeing that out there. Maybe for the $5M plus units, but not nice buildings on good blocks. The Q1 numbers bear this out - average ppsf down 3%. Not saying I'm bullish or anything, but if you can find something 40% off 2007 prices that you love, I would say jump on it stat.

IT DEPENDS!

If you have been looking at lots of properties and following comps, I'd guess you have a good idea. I think only distressed sellers would entertain offers more than 30% below 2007 early 2008 comps.

if the apts. your looking at are out of your budget and the only way you can afford them is to lowball, then you need to downsize your search to cheaper apts. sweetheart.

and you need to crawl back under your rock

OTNYC yes it's happening. come visit the price chopper thread, but even more importantly the mmwcs threads. it's picking up steam.

with 11000 apartments on the market, a few hundred distressed sellers can move the market significantly.

sweetheart? sexist as well as racist? you're such a fucktard alpine.

My pitch to buyers (back when I used to work with them) was always "so make an offer of what YOU think it's worth. there are only 3 possible outcomes: they take it, the say 'F*** YOU', or they counter offer. And if they say 'F*** YOU' , they say it to me, not you, so you don't even have to get embarrassed about it".

depends all how long it has been on the market, price drops and comps do your research. any offer that gets you a counter is a good one.

That's what I'm wondering, how long of a time period is 'too long' for a property to be listed? 2 months, 3 months, 4 months??

AR - I have seen the price chopper thread. Despite the massive volume of posts, this is still anecdotal. I think if someone were similarly inclined, they could pull out at least a dozen units that went to contract above 2007 prices (there is a thread that listed 2 units that fell under this category). I don't think you can argue that there are many on here who take great pleasure in others' misery and the overall deflation of prices, either because they were priced out of their beloved Manhattan, they are jealous of friends that made money (at least on paper) transacting real estate, or they are simply bitter.

I don't support or deny that prices are down significantly - I have a feeling they are probably down around 10-20% depending on product, price point and neighborhood, and in some areas, probably even higher, but every single sale is just one data point. I think average ppsf is the key number to look at in the long run, which was down about 3% in Q1, and I for one will be keeping a close eye on it for Q2. Just because someone overpaid in 2007 and was forced to sell at a steep loss due to a layoff in 2009, does not mean this defines the market.

YorkvilleMom--

In answer to your question, there is no set formula--it all depends on where a particular property is priced. If a property is correctly priced, reflecting today's market, then putting in a low-ball offer likely won't fly. If, however, the seller's got his head up his ass, with an asking price at 2007 levels, then a lower offer is completely within reason.

Best way to gauge things is to get as educated as possible about price trends in the nabe you're interested in--start by looking at comps, price-cut histories (easily found on Streeteasy) and the like.

not sure what you mean by anecdotal...these are many many (dare i say hundreds) of real examples based on lowered asking prices. unless you assume that some significant number of these properties will eventually sell well in excess of asking (which hopefully we can both agree will not happen) they provide a significant base to support that prices are down.

saying that there was a thread with two exceptions doesn't negate the above.

as to sq ft---i can't count the number of threads that have clearly made the point that this measurement is all over the place and not subject to a comprehensible or enforcable standard. off the bat, an average of anything can be very misleading; but relying on an average of a number for which there is no standard seems to make it worth even less.

CC - numbers are only meaningful in aggregate. People cherry picking cases to prove a point doesn't explain the market, even if it is in the hundreds (considering 10,000 properties sold last year). I understand that the measurement standards are all over the place, but as long as there isn't a significant change from one year to the next in the overstatement of square footage, I think this is still a relevant number. Based on your post, 100 cases on a web site is more meaningful than a standard calculation for which there is 20 years of data. If we look at the median price in Manhattan, this number actually went up in Q1 (but we know this was unfairly influenced by a handful of high end closings). Median price on resales was down close to 20%, but since median square footage was also down significantly, we need to adjust. Frankly, I think the most indicative metric is median ppsf but no one calculates this (that I am aware of).

Again, not bullish here - frankly, I am shocked the Q1 numbers aren't more disastrous given the market was basically frozen second half of 08. I am "cautiously optimistic" as I am sure others are (but many are probably too scared to say it here for fear of all the bull-bashing). I agree the fundamentals don't support any flattening of prices, much less an uptick, but deals seem to be happening, which again completely surprises me. Only time will tell. I, for one, still love living here. Unemployment numbers will be one of the primary drivers (as many before me have said). No jobs = no bucks = no bids.

CC and others - curious to know what your metric is for determining whether the market is up or down. Surely it isn't the postings on the "price-choppers" threads. If not average ppsf, what do you look at?