Any advice on pricing strategy?

When did u sign contract for purchase, in spring 07 or earlier? Did you do any renovations since the purchase in '07? Did the brokers who quoted 2m provide solid comps data to justify 11% market increase since 2007? For what its worth, market is hot now but if you price wrong, you'll miss it and have a stale listing unsold going into the slower summer. The market will determine value, so just dont fall for brokers who are sugar coating you with a high valuation to get u to sign that listing agreement - and then 3-4 weeks later ask for a price cut. SE condo index has market down 5% or so since spring 2007 - Id widen that a bit to down 7-10% or so in the 1-2m price point. If you signed in late 2006, lower that slightly. If no reno since your purchase, Id agree with the broker who is saying 1.75m, that broker seems to have much better pulse on the current market and thats what you want.

What you paid is irrelevant. Bank appraisals aren't worth much to me. Especially 2 years later. Look at comps in your building. Adjust a little for condition, views, light, floor number. Look to comparable buildings as close as possible. Then ask for a nominally aspirational price if you must for the first 2 open houses. Listen to feedback and adjust downward accordingly in realistic way. No nickel and dimming reductions. Take big bites if you must.

First, you should determine the likely current market / sale price of your apt. The SE index of same-condo resales has prices down 6.5% since May 2007 when you roughly bought, and flat since Oct 2010 when you roughly got a refi appraisal. That gives you two data points that indicate a market price of $1.68M and $1.7M. I would supplement that with same-line, similar-floor, similar-condition comps from your building. If there have been no sales recently in your line, connect the dots between a recent sale in a different line vs. a past sale and compare that to the SE index. Does it roughly match?

Having determined that price, make a decision as to whether you want to sell vs. rent. No sense going through the hassle of trying to sell and losing months of rent with an unrealisic sale price in mind.

On choosing brokers, take the one that is accurate. Ask each of them to explain the reasoning behind their listing price recommendation, with their expected market price. Say you have come to an expected sale price is $1.68M or $1.7M. The one with the $1.75M listing price probably will give you a sale price of $1.7M, saying that $1.75M will generate quick bids and a quick sale with a little room for negotiation. That is good: the sign of an honest & efficient broker. The one at $2M will say $1.8-1.9M, pricing reflecting on finding the right buyer, we can always drop later. That is bad: the sign of an inefficient broker who is either dishonest (lure you in with a high ask) or incompetent (cannot accurately gauge the market price of $1.7M). Whichever the issue, you don't want either.

Your pricing strategy should be a result of the price you want to end up at crossed with the amount of time you want to spend to get there crossed with the conditions in your submarket. (For some reason, people on this board hate the term "micro-market," but realize that the pricing trends of $750K 1 BRs have little to do with you.) I am happy to come take a look at your place if you are downtown or on the West Side, and generate a number with a justification of how I got there.

If you want to ping me, just please put "streeteasy" in the title so I can find the email.

ali r.
DG Neary Realty
ali [at] dgneary [dot} com

The statements that caught my eye are "significant loss" and "can always rent but I don't want to be a landlord."

You wouldn't deliberately sell your stock portfolio low, but you're contemplating doing a similar thing with this investment when it's not necessary for you to do so?

I hire property managers for my rentals, and that solves most things you don't like about being a landlord. I find depositing checks every month is not too inconvenient. You do have to give instruction to the PMs once in awhile.

PMs must be real estate licensees, and they need to screened with serious care. This is the hardest part and it takes time, and must be done right.

If you'd like help with this as a rental, please email me at kharby at crrnyc.com.

Urbandigs: we signed in spring 2007 and have not done any renovations whatsoever. We are planning to do a fresh coat of paint and resurface the floors (heavily scuffed). Getting quote on that now but don't want to spend more than $10k or so to freshen things up. Kitchen and baths are in fine condition and don't need any work.

The "sugar coating" brokers are saying that we should put it on in the $1.85+ range and see what we get as offers. Most likely, they expect the offers to come in lower than that but that is the strategy. It gives us negotiating room and the buyers want to feel like they are getting a "deal".

If we list lower, the offers will come in lower than that and we will have no negotiating room. It's hard to go back to a buyer with such little wiggle room and by starting lower, we end lower.

Kylewest: what do you consider a big bite price reduction? I really don't need to take a loss since renting will cover my costs.

Inonada: most of the brokers are using my purchase price as a starting point and then looking at comps. Not sure that makes sense to me. If I were a buyer, I wouldn't really care what the seller paid. I would only care what the comps are... They seem to be saying $1.7M is likely around market (plus/minus a couple percent) so let's list $150k higher and see if we can't do a little better and give us negotiating room. Can always reduce price in 30-60 days...let the market tell us. They say there is no upside in starting low. You will just be giving it away.

Kharby2: renting is definitely the fall back option so I am not going to sell low just to unload it. I am willing to take a limited loss because personally, I believe the stock market will appreciate faster than real estate over the next 5 years. And I don't want to wait 5 years to sell my apartment as an out-of-towner. But if I can't get my price, yes, I will rent.

consider renting for two years and selling as an investment loss. Of course, you can try to save yourself 6% of 2 million....ah... nevermind.

Im in a similar situation and I'm going with renting. To me, there is no reason to lose $. Disclaimer: I am one of those people who believes the market bottomed already. If you are in the camp that believes there are going to be further declines, then that may be a reason to sell now.

Regardless, you have to go with comps period, because that is what every buyer will base their bids on (unless you have some very unique place and there are no other apartments like it)

Gcondo -- I like the idea of taking an investment loss. My understanding is if I sell without renting first, I cannot claim a loss since it was not an investment property. Do you know how to document what the value was when I started renting? Is a listing price sufficient?

Technologic -- I think there is risk of further declines but probably not another bottom falling out. I am pretty sure there won't be any real price appreciation for the forseeable future. And certainly any growth in real estate prices will not outpace the stock market. If stock market is up, real estate will follow. But I don't think it's realistic for real estate to go up faster than the stock market. People are just too recently burned by the bubble. So I'd rather have my money in a different asset class than real estate.

list at whatever price you like, it really doesn't matter.

if it doesn't sell in 2 weeks, the price is too high. then lower it by 20%. if still can't sell it in another 2 weeks, lower another 20%, and so on. this is the most efficient way to sell a property

jtam: I always look to see what seller paid. It always tells me how aspirational the price vs. comps and how serious the seller is. Btw, if you are in a building with big tax abatement, consider that after renting a few years, as you get closer to abatement expiration you might have a lot more competition sales in the building ....or rentals.....or both

"urbandigs
2 days ago
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...For what its worth, market is hot now but if you price wrong, you'll miss it and have a stale listing unsold going into the slower summer....

Did you just say the housing market is HOT NOW??? You're just setting yourself up to get torn apart by W64thstreet and his gang here.

if you rent the apt for 2 years, then it is an investment property. your cost basis will be the lesser of either the amount you paid for the unit (plus cost basis adjustments), or the current fair market value at the time you converted it to a rental. Of course being able to take the entire loss against income in a single tax year is, well, huge.

Per the IRS:

http://www.irs.gov/publications/p17/ch13.html#en_US_2011_publink1000172224

Property Changed From Personal to Business or Rental Use
If you hold property for personal use and then change it to business use or use it to produce rent, you can begin to depreciate the property at the time of the change. To do so, you must figure its basis for depreciation. An example of changing property held for personal use to business or rental use would be renting out your former personal residence.

Basis for depreciation. The basis for depreciation is the lesser of the following amounts.
The FMV of the property on the date of the change.

Your adjusted basis on the date of the change.

as for documenting the value - an appraisal would be good, or maybe a broker analysis... If you think your apt is worth more than you paid, then just go with your original cost basis.

put it on for 1.7mm and hope for a biding war. HAHAHAHAHAHAAHHAH

List it at $1,950,000 and offer to pay all closing costs.

Noah's comments on the housing market are backed up by real data http://www.urbandigs.com/2012/03/market_still_active_-_weekly_d.html
Priced correctly your apartment would indeed sell quickly.