Negotiation tips for a seller

make a counter offer, keep the buyer interested. Make the buyer respond. You saying "No", doesn't require a response from buyer. Counter 50k lower 10k lower 1k lower, just anything that would require a response.

I agree with the need to counter. In a bear market, buyers want to see willingness to work a deal. The aim usually is to settle somewhere in the middle as sellers tend to list their places slightly above market average and buyers want to have a deal and buy at slightly below market average.
Also keep in mind that in bear market, some buyers tend to look at the future average price and not current average price. For example, take the "Edge" in williamsburg. They are pushing units at prices around $800 psf while the current market there should be somewhere in the range of $700 to $750. That is not a big drop; however, buyers are discounting the area even further down to a range of $600 to $650, which is the future price range that they see this area at next year. The result is evident by the low number of units (20%) the "Edge" has in contract.

As someone who's seriously looking to buy, I don't really think that you can get a buyer to meet your price unless the buyer really wants the apartment and is financially able to go up to the price that you want. I wouldn't recommend playing games with a prospective buyer by inventing a fake alternative buyer because you can easily scare off the potential buyer. I've seen many apartments and alot of them are quite interchangeable. This is a tremendous amount of money to spend as you know and I would think that most people know what they are able to spend. Maybe your potential buyer is lowballing, but maybe they really can't go much higher. Making a realistic counteroffer is certainly a good step.

Your question, Mahalia, is no different in a way than a buyer asking how to bid. It depends almost entirely upon how you determined your asking price. Is it in keeping with building comparables? Area comparables? Have you fairly weighed if your unit should be higher or lower than comps based on which floor it is on compared to recent sales, as well as views/light differences? Have you seriously weighed what condition your place is in? And how long ago other comp. sales were (the market is lower now than 12 months ago).

If you have done all this and not come up with false reasons why the comps shouldn't apply to you, then you know what your place is worth and why. Explain this to the buyer/buyer's broker. Ask to see their comps--perhaps you missed something, or perhaps they did. Have a discussion if you truly think your ask price is appropriate. If you think the current conditions make the right price 5% less than ask, negotiate toward that number. I won't repeat everything said here, but read the entire thread: http://www.streeteasy.com/nyc/talk/discussion/8657-negotiating-better-fundamentals-of-effective-negotiating That should get you thinking along the right lines.

I'm a buyer, about to make an offer on an apartment for less than asking & here's how I see it: The buyer has decided how much he thinks the apartment is worth (to him) and is strategizing his offer one of 2 ways 1) he is giving a firm offer & won't be influenced by your counter unless is it is for some insignificant amount that just makes you feel a little better but doesn't change his bottom line OR 2) he has decided how much the apartment is worth to him and he has left himself a little wiggle room, knowing that you will likely counter. There's really no way you can know that in advance but either way, a smart buyer in this market is not going to pay what YOU think the apartment is worth, but what HE thinks.

Btw, "interest" is a fickle friend right now & I wouldn't bank on multiple offers. There really just aren't that many real & qualified buyers out there & the one's who are happen to be the smart ones like me who've been waiting for the adjustment and are looking to get a bargain so aren't willing to pay bubble prices- even if you did. Besides the apartments I am actually "interested" in, I have also been seeing apartments above and below my price target just to get a feel for the market. I aways ACT interested, ask lots of questions and even follow up on some. It doesn't mean I'm really interested.

Thank you, kylewest and everyone. I based my price on the last 3 closings from September/October and added a bit because our place has a large private outdoor space. There haven't been any recent sales with outdoor space, so I guess that part is subjective. Thank you for the link, it's full of great advice.

The questions I'd have about the outdoor space are: (1) does this mean the unit is on a lower floor than comp sales? If so, that must be taken into account as a negative. (2) Is the outdoor space truly private or does the building have rights should they need to set up a scaffold, store materials/equipment for a facade or roof project, etc? Have you priced the outdoor space at no more than 50% of the price per sq/ft as the interior space? And mind you, 50% is a rough figure--there's a big difference between a nasty, dark balcony and a wrap around 10 foot deep set back terrace. They don't both get the 50%-of-interior-space valuation. (3) While it is "large" are there any drawbacks to the space (for example, a huge a/c unit sitting in the corner to cool the lobby and which hums day and night for 5 months a year).

I doubt very much you priced your place intending to get the asking price (a take-it-or-leave-it ask price is almost universally a poor strategy in RE). Thus, you did intend to move toward some other number that is lower than your ask. Now that you have an offer that is -12% from your ask, this doesn't seem like a gap that can't be bridged. If you priced your place so that you don't even have 6% wiggle room to meet a bidder 1/2 way if they bid under by 12%, then I'd say you priced the place too close to what your bottom line acceptable offer would be. In this market I think sellers should generally give themselves about 10% room to negotiate since buyers will feel much more like they are getting a "deal" if the seller can go down 10%. It is psychological, of course, since a well priced unit should sell at the ask price, but humans are not always rational actors. There is psychology involved here.

Can you call up all the people who expressed serious interest, but didn't make an offer, and say that you are close to signing a contract? Try to shake another offer out of the bushes.

It's tough to put negotiating into a couple of sentences -- nobody asks trial lawyers, "so, how should I present my case?"

However, one general thought: Avg. listing discount in the third quarter was 7.6% off list, so that's a benchmark for many buyers. I would counter by coming down significantly off your ask, which will be regarded as a conciliatory gesture by your buyer, and try to get them to come up.

ali r.
{downtown broker}

nyc - but anyone who follows threads on SE would consider that a "sleazy broker trick" and would probably not fall for it.

Eh, it's not sleazy, IMO. Say you have a serious offer, and you would like to give them the opportunity to make a bid. If you don't have any takers, get back to the first person ASAP and give them a serious counter if you don't absolutely have to sell or just take it if you do. Often, the first offer is the best.

That SO sleazy. IMHO. There are only 2 types of sellers in this market. 1) desperate need to sell and 2) ahead of the curve get the fuck out fast seller. In q normal market you'd have oh I'm trading up to a classic 7 ppl.

Both types of sellers are very very negotiable.

Gosh kw - your advice is always so fair and level-headed. not sure how i feel about that ;)

is trying to flush out other offers sleazy? i suppose lying about it isn't the most stellar way of going about it, but it's not a bad strategy. during our rental search we had a broker come back to us and say "they have a serious application but are still willing to consider other offers. are you still interested?" (something to that effect). it didn't really matter to us whether it was true or not. since we hadn't made an offer (b/c the place was a 2 br coop sublet and we wanted more space and flexibility) i saw it as an opportunity to offer our bottomline (very low), which i did, and it was rejected. but still, no harm in trying to see what others parties have in mind. it's very likely, as 10023 mentioned, that if there was indeed an offer, it was the best that they were going to get. blah blah blah, i'm rambling. point is, not a bad strategy and i would never assume people are always completely upfront about things (not sure that it really matters in the end).

You aren't lying if you are saying "you are close to a contract" - I wouldn't string along the people who made the offer for a long time. I assume you are marketing the property yourself? Just do it, and if you don't get any bites, counter your only bid in a serious way - that will depend on how much you want/need to sell.

and this is coming from someone with a grad degree in ethics. ethics in real estate is laughable to me. it's all a bit of a game isn't it? (unless kw is involved, then its very serious ;).

Jesus. WTF is so hard about letting the 'mkt' speak. If you have multiple offers you can be a dick. If you don't then play the game.

In the go go 2004-2007, you pulled a number out of your brokere's azz added 10% just because and waited for a bidding war. Now Sellers, do you have a bidding war? Do ya punk?

Kyle, thank you SO much for that link. It was very helpful to get a refresher course on how to negotiate. I have been negotiating deals for work for years, but somehow it's different when it's your home. I knew that going in, but it's still a challenge.
I'm going to ask the buyer how they came up with their offer, that will give me some insight into their thinking. I wasn't expecting a bidding war, but I thought our place was priced pretty sharply compared to recent closings and what else is on the market. Maybe I missed something, or they don't value the outdoor space the same way.

I'm giving Mahalia the benefit of the doubt and that 12% below her minimum makes a difference in her situation. There's no harm done in trying to squeeze a few more dollars out of your buyer, but just be aware that he/she could walk.

Mahalia, I'm curious about how the buyer will answer your question about how they arived at their initial offering price. Did you value your apartment at a higher price than the recent comps in your building because you have an outdoor space? As a seller, did you expect that you would get an offer so quickly?

mahalia, i think you are right on track here. can't hurt to ask the bidder. worse they can do is not explain themselves. information rules, and if you can get some intel, good for you. otherwise, sounds like you have a level head about this and may be close to a deal. 12% apart is actually very close. good luck.

Lmao. I'm sure buyer can go up 3% and seller can go down 3%. Oh shit I know what's holding this up, the fucking 6% brokerage. WOW who'd a thunk it?

ali r-when you say the avg. listing discount in the third quarter was 7.6%, is that off of the original asking price or the discounted asking (assuming the buyer lowers their price during listing of course)?

All right, kylewest, you were right about so much. We countered with 5% down, the buyer upped her initial offer by 5%, so we're now very close. We asked for the bid to come to the middle of our difference and she has a deal, and also told her broker we were going to go back to the 60-odd people who left their name and e-mail addresses with our new low 5% down list.
It looks like we might be in contract in the next week or 10 days, one way or another.