strategic thinking

always thinking, falco. while it might not get you anywhere in the short term, submitting a bid at the level you'd be willing to pay might or might not get the sellers thinking about their asking price. in the beginning it's not likely, however, so you're probably wasting your time.

patience.

well falco with any return there is risk. If you wait for a more desireable price(return), someone else may come and scoop it up(risk). If the numbers do not make sense to you then go with your gut I say. Good Luck.

there are plenty of fish in the sea, falco. no apartment is irreplaceable.

aboutready

Agreed I adopted this philosphy 4 months ago and I've been wasting my time. Educating sellers on what is and what's to be while they are still overly emotional about their prize possession only puts you in their "next" file. Ask questions about the apartment that they themselves will answer to your line of thinking. Let them reach the conclusions. Let them call their broker and say, "What happened with that guy?" "Contact him and see what he's thinking. Tell him we are negotiable."
Silence can be quite loud.

falco, great question. In my experience, unless you know the seller personally, you can't really predict how they'll react to an early lowball. In general, I'd say if you're truly interested in the property, make your bid early. Yeah, they may shoo you away, but if it languishes, they're probably more inclined to remember you. In short, I don't think you lose much by stating your intentions earlier in the game.

I've seen 50 apartments. I liked maybe 6. I put offers on 4.
All 4 showed either "went into contract" or "no longer available." The "in contracts" later showed "no longer available" and no sale on acris.

I actually don't even put a property on my watch list until it has been on the market for a while (generally). There is a certain amount of seller education that I don't want to pay for with my time.

Hmm. Maybe depends on how much you like the place. You do run the risk of losing it if you just sit and wait. What is lost by making a bid right off the bat? Complete rejection? You could still watch the property, right? Or are you locked out from bidding again if your offer is declined, they reduce the price, and you want to make another offer. I've never tried to purchase a property, so I don't know how this works.

You could be surprised by how much the owner is willing to negotiate (or not). Guesswork gets you nowhere, imo.

I sorta like the idea of letting it age a bit, get them nervous. Psychologically, if they get an offer, even a lowball, they'll think of it as "well, people are interested, and they'll be more".

Crickets is MUCH more damaging.

I think folks are actually BETTEr at rationalizing the bad viewpoint when they have something to push against. "oh, that guy is an idiot, just a lowball, etc.". When you have noone to push back on, I think you get MORE nervous.

FALCO - great topic to discuss. My opinion is that acting immediately has a psychological drawback that is pitted against the risk that the property sells before you act. So two dynamics here at play and seller motivation plays a role. If its priced 15-20% above market value, and you know the market and that price point, then clearly the seller prefers to test the waters to see if any fish will fall in love with it and submit a very aggressive bid.

So, acting immediately may only further the confidence of the seller. If they are asking 2.5M and it should trade around 2.1M, putting in a 2M or 2.1M bid in first week, may make the seller think: 'well i got 2.1M in the first week, clearly my property is priced right and is getting serious interest. lets see how high this guy will go, and if he doesnt budge, well I have a backup'.

Its dangerous to discourage any client from placing a bid on a property they want. You just have to deal with the emotions that come with bidding early as sellers motivation to hit what they consider to be a low bid may be very low. It only matters what the seller thinks as its their property and their call how to respond and what to accept. You cant force any seller to agree to a price they dont want to agree to, unless they are desperate in which case I would think the pricing would be more in line with reality.

I would submit the bid, but play hard. Dont leave it active and on the table for more than 2 days if you get a response that is not desired. You may need some luck, but leaving the bid on the table for a long time, so early in a listing, in my opinion will cause you to lose control of negotiations and lower the chance the seller will hit your bid. Plus they can use it as leverage for other interested parties. Being pressured by a real bid that will withdraw if not agreed to, makes the seller seriously rethink their plans and motivations. If anything, support your bid with data explaining why it is where it is.

Well, I'm a little information hound so I've done my homework on the seller. Retired successful NY lawyer. I'll guess high 70's in the age department, to be kind, seemingly in good health. I sence no urgancy to the sale but, a desire to sell. If I could give you a read, I'd say that this is a seller that will insist on 'market value'. The question is how long and under what conditions will 'market value' make itself be known. These deals can be personal. Sometimes the seller has to want you to have it. When their this fresh on the market I hate to be the one claiming that their castle should be priced like it's in Shanty Town. It's a tough call. September could bring the market back a bit for the 'pick of the litter' properties or leave us flat ready for the next leg down.
What to do, what to do...........
By the way, I promise all of you that their is not a property in the world I would not walk away from if the price was not right.

"I think folks are actually BETTEr at rationalizing the bad viewpoint when they have something to push against. "oh, that guy is an idiot, just a lowball, etc.". When you have noone to push back on, I think you get MORE nervous."

I think that's a good point, but it only works if no one has bid. You obviously can't control other bids coming in, and chances are, there's going to be at least one bid sooner or later, lowball or not. urbandigs' approach is right on - state your intentions early (once you've done all your homework of course), and if they're pushed back on, hold your ground, pull the bid, and wait. If there's no movement after awhile, they'll know how to get in touch with you. I would certainly not approach this with any patronizing "this seller needs to be educated!" attitude - that's condescending and will probably get you nowhere. Provide data to support your price and be friendly and sincere. I don't see any reasons ever to do otherwise.

Just looking at the listing discounts lately for Manhattan co-ops, there're very few real (more than -15%) lowballs getting accepted. They're rare enough that each gets posted on the lowballs thread. Most are ho-hum single-digit percentages off from last asking. That suggests the truth of what you and others said above: it takes time for most sellers to acclimate, with decreases along the way.

bjw makes good points falco. Since you say, "their is not a property in the world I would not walk away from if the price was not right", I don't see the harm in bidding now. UD's point about an early bid inflating heads is guesswork. UD - you have much experience, I have none, but I would have to think that it just depends on the seller, no?

I faced the same question when I saw a place I liked asking around $70k over market. I ended up putting in a slightly above-market bid on the apartment about three weeks after it came on. The response was a counter-offer at asking. I then made the mistake of trying to reason with them -- pointing out that there were plenty of comps, that my offer was above market value, that inventory was high, etc. Their response was that I must really love their apartment -- so I should pay asking.

(My response included, as an initial step, suggesting that they turn their apartment sideways.)

But that's just one experience with one seller -- if the seller had been more reasonable, maybe we would have had a different result.

(I then bought (fingers crossed) a better place for less than they were asking, while their apartment is still on the market about 3 months later. So it worked out better for me in the end anyways.)

In the end it's no different than picking up a girl in a bar.

(apologies to the ladies on the board if my post comes across sexist)

or picking a guy up in a bar. (there, sexism gone).

like i said, i've never tried to purchase a property, but i've purchased many other things in life, many of which required some negotiations. you could speculate and try to play games, but you should always keep in mind that there is a real possibility that you and the seller might just have the same idea of "reasonable price" in mind. That is the assumption I would work from.

aboutready

Yeah, except one is usually more a seller's market and the other a buyer's market. :)

I'm not too sure that I'd be able to coax the seller to a local bar, ply him with copious amounts of alcohol, regale him with my faux sexual prowess-ness and, then work him back to my current apartment for a little of the 'ole 'hide the pickle'.
Even if I could pull it off I'm not sure what kind of help it would be. Then there are those awkward moments at closing were nobody makes eye contact.

It's all about the tease falcongold.
And he needs to know he's not the only handsome gent in the room.

uwsmom - yep, always does! Seller's motivations vary so greatly and we wont find out true intentions, well usually we dont, which means the buyer is left guessing how pressured the seller really is and motivated to move the property so early in a listing. I know many situations, including myself, where sellers ignored a bid in the early goins that ultimately prove to be the highest bid received. But it takes the seller 4-5 months of no other quality bids to realize they made a big mistake!

I got a 975K bid in first week for my place, 2M at 245 E 93rd, when I was priced at 1.075M. I countered at 1.025M and the buyer stopped. I ended up selling for 935K.

http://www.streeteasy.com/nyc/sale/32035-condo-245-east-93rd-street-2m-yorkville-new-york

Listing on SE didnt show the marketing I did myself on NY Times and as open listing on citi starting around late JAN 2006 at 1.075M. I officially listed with my company in May, and got cash deal a month later.

There is no right answer. I think you did good by your research 9before i read that part I was going to suggest having a chat with the super and doormen bearing gifts (also don't forget there are probably 4 different doormen, and the night doormen often have different tales to tell.

See if you can get aboutready's hubby to tell you what the guy is like to deal with in client matters (if he's ever dealt with him; of course, substitute any attorney for aboutready's hubby). What field is he in?

There are times when each strategy will work, and you never know till it's done. But one thing I will point ot: right now, my guess is that there are lots of people out there throwing out lowball offers. this changes things for you in a few ways:

1) When you're swimming in the water and there's a shark, you don't have to outswim the shark, you just have to outswim your slower friends. What i mean here is that if the guy is getting lots of REAL lowball offers, yours might not seem so bad compared to the crap that is being thrown at him.

2) If he takes a lowball offer below what you were going to offer, you are going to feel really stupid.

3) He may very well know exactly what it's worth, but taken a look at some brokerage's "average first offer off asking price" and is playing game expecting a first offer of exactly what you are willing to offer and planning on taking the first one at that number which comes in and getting out of dodge.

So, I guess what I am saying is that in the current environment, I think there are more risk in waiting than making a pre-emptive offer sooner. Also, what is the risk of making an offer too soon? That it takes him longer to come down? That's not really a big risk is it? So it takes him another month to come down? You can't wait an extra month? OTOH, look at the risks of the alternative position. I think that simply as a risk management issue, your risk of loss (of a deal) is greater than your risk of loss in having to wait longer because he thinks he's going to get more. And hey, maybe he WILL get more. But I don't think if he will get more that you would have gotten the deal anyway.

if the guy is really motivated the only way to know is to put a bid into him

i bot a loft in 86 (pitched it in early 88...whew!!) at a price much lower than the FSBO listing
i very delicately lowballed the seller who was a little arrogant in his response. i stayed mechanically polite and cheerful and left my phone number with him despite his assurances that he wouldnt be calling. 6 weeks later the phone rang (pre caller id) and i recognized the accent immediately..bot wothin a few %age points of my lowball

i'd try not to think too much about the seller, calc where I want to bid, and submit, while always maintaining a respectful cheerful demeanor, regardless of that of the seller

once you are in contract stages, you should assess the cred of the seller--bot one place from a lawyer who delayed the closing almost 4 months with no explanation--to sue would have been counterproductive--i had to remain a captive to this sob and close on his sched despite huge hassle for me