Tricks are for kids

I don't know about brokers in general, but I'm just about to list my apartment, and the broker researched contracts and sales from the last 2 months to find the market price. I think listing at 2007 or even worse, pie in the sky prices, is a very silly tactic. I've been looking at buying another place, and as a buyer, seeing an unrealistic price tells me I should wait another 6 months. By then, either the price has been chopped 3 or 4 times, or the property is off the market because the sellers weren't really interested in selling.

Broker...tell'in like it is.
Not so long ago I made a low ball offer on a place to the listing broker.
Her responce was that my offer was an insult.
I explained that It was not an insult, it was a number. Not the number the broker and seller had in mind but, still just a number. If anything, it was a compliment. It's says to the apartment, "I like you". I might even love you if your current owners adjust their expectations. The broker informed me in that fake phoney way that if the owners' were interested they would be intouch (translation: take your lowball offer and shove it up your). The property did sell some time after that at a price that could eaisly have been derived from my portly offer. It's a game but, not any more a game than anything else.
Remember that girl you knew from back in single times, the one who flatly refused to 'play games'. Still single living with 3 cats. Come on!!! Pick up the dice, roll, play the game! Isn't that what your doing here? Attempting to learn the rules and tricks of the game.

OK, falco, but in your example I roll the dice & make an offer on a place & I get to take the fallout for insulting the seller while the next guy/gal who comes around gets what I wanted for what I was willing to pay for stepping up early.

Sounds like you might be making my point on waiting.

"I had a broker tell me this weekend to ignore the asking prices & offer what I wanted to"

imho the buyer should always behave like this (if letting that property go is not the end of the world).

I agree, except.... when I was a seller, I trusted that my broker would advise me accurately on what my apartment was worth at that time since I really did want to sell it.

As a buyer, I'm trying to remember what it was like to be a seller. I expect the asking price to be fair & reasonable & market-current. If I can't count on that but I also have to worry about "insulting the seller" what's the point? The only way to get the apartment is to overpay & I'm sorry, but that's just not going to happen.

"insulting the seller"

if you submit the bid saying "that's all i can pay for it" instead of "this is what i think your property is worth" it's hard to hurt the seller's feelings. btw, since when are sellers concerned about insulting buyers with inflated asking prices?

lol. good point. But the insulting the seller thing is a real concern apparently (I didn't make that up). You're right though, I'll make sure to present the offer humbly.

I guess I'm nervous about the bid because I am definitely bearish & so I do not want to overspend, but I don't necessarily want to wait another 6 -12 months since I have found at least 3 apartments that I think my family would be happy in & this is a long-term (15+ years) purchase, not a flip.

i always determine what i feel the property is worth, put forth an offer, and refuse to budge. that was once full asking price, the other three times not. interestingly, one time i was getting desperately close to my moving date, found something i liked that was too expensive, submitted a lowball offer and admitted that it was low but also admitted it was my self-imposed spending limit, and got the apartment.

If every potential buyer is going to bid below asking price, why wouldn't the broker set the asking price higher than what they expect to get? Seems like logic, not tricks.

malthus, because a seller really needs to sell, like yesterday, and bought long ago enough that they will still make a profit. you see it here and there already.

I think it's often the delusional seller who sets the price & that the broker takes the listing & thinks/hopes that they can get to a realistic price eventually & get the place sold. Remember, the realtor is working for the seller.

AR: But assuming Broker A can pinpoint the actual bid that a place can draw (which assumes a lot, granted), A would be leaving money on the table by pricing it at that price since everyone is going to come in lower.

I agree that if you are desperate to sell you need to take a different approach but that is not necessarily the case.

Malthus, there's a whole strategy in setting an ask price. The actual negotiation is different. Sometimes it's set artifically low to qualify for search hits based on some criteria. Brokers must communicate any/all offers. And of course today buyers throw out many low-ball offers(throw spaghetti against the wall) and see which if ones get accepted.

malthus, despite the talk there's still too much inventory out there. some sellers want out, and are nervous. others not. there is not one set of psychological rules for this game, there are a few. sometimes it is more obvious to a buyer than others.

and if you hunt around recorded sales, you'll see that as prices came down the discount from final list became much smaller, with some apartments going for over asking.

right now, as Noah has noticed, sellers are a bit giddy. i think some brokers would love to convey low bids to their sellers just to get them to adjust their thinking.

malthus, here's an example. 8N just closed for $860k. this seller decided not to test the market, but to try to start out lowish, at $895k, which is much lower than like-sized apartments in the building are currently listed for. may partly be condition, but 8N wasn't too lovely itself. i'd guess these people want to sell, and quickly.

http://www.streeteasy.com/nyc/sale/467502-coop-200-east-57th-street-sutton-place-new-york

The problem with setting an aspirational price in a declining market is that it soon looks delusional. Much better to set the price within the range of very recent comps, and designed to be caught by the maximum number of searchers ( ie $799,000 rather than $805,000), and wait a bit to see if you can full ask. If you ignore recent comps and price that hypothetical listing at $879,000, by the time you realize you need to lower the price after all, the recent comps might be for the low 700's, and down you go chasing the market with your stale listing.

maly, that's very true but to look at it from the seller's position: A few years ago, the unit was thought to be worth 900, now the buyers are thinking it's worth 695 (perhaps a little off on both sides); anyway, the seller is loath to ask 750 when "just 2 years ago, the unit upstairs sold for 925".

The comps from 2 years ago don't matter. As a seller myself, I clearly missed the frothy top of the market, but hey, that's life.
I wouldn't listen to what the "buyers" on Streeteasy think it's worth either. Just look at comps from the last 3 months, and give it a whirl.

Well, I wouldn't advocate a "too high" price, or one that is "aspirational". I'm simply pointing out that in any negotiation you don't start at a price at which you think your counterparty is already. Likewise you don't start at a price that drives them away, but I think that is obvious.

From my perspective as a potential buyer, it is almost all priced too highly, which is why I am not looking right now. But clearly there are plenty of people who disagree.

I'm starting to agree with you Malthus, though I am still trying to find something anyway. If sellers don't wake up and see that the bubble has burst then they're going to scare off the few of us buyers that are left. Hey, they just reduced my rent without our even asking! I can sit comfortably on the fence until things come down even more.

I also can't imagine why anyone who doesn't NEED to sell would even list their apartment right now. Are there really many unmotivated sellers out there these days, brokers?

This is why you should say when you make an offer "tell your moron seller that he's an asshole if he doesn't take my $750,000 offer". At least this way the broker can be correct about SOMETHING when they say your offer is insulting.

30 YRs - really like that tip : I will be sure to use it the day that RE prices fall so much that renting looks expensive!

we really don't say that crazy shit, we just think it. We know the buyer is not delusional just motivated by greed and what's bad about that. If your a careful shopper your doing endless price comparisons. If your a new seller you tack it to the wall with your dream price. You even think your greedy broker who is begging you to list it for less just wants to work less and sell it fast so they can steal your 6% w/o doing jack. The broker job is a thankless task at times. So you list at your idiot ask and after a few months the problem is not with the price it's with the loser lazy broker and those cheap ass buyers who wouldn't know a quality deal if it bit them on the ass so...they change brokers and keep the price. Time passes and even the non-educatable begin to erode their false hope and they begin to cave....ever so slowly, surrendering 40 to 50K at a clip as we watch and laugh as their dreams of a king's ransum slowly wittle away. Not an evil bone in anyone's body just greedy greedy greedy and all side on all accounts. Gordon Gecko would be proud.

When exclusives on "every day properties" was just coming in vogue (right around 1990?) there was a panel discussion held by the "Downtown Broker's Association" which largely centered around the new phenomenon. When asked what a broker should do when faced with taking an exclusive on a totally overpriced listing, Barbara Corcoran answered something along the lines of "as long as you get a long enough exclusive so that eventually they have to lower their price and sell".