How We Got A Deal Buying In Brooklyn w/o Broker

I wanted to write this post because my partner and I were novices who came into the home-buying process knowing nothing about it. Though we made a few mistakes (detailed below) in the end we got an excellent 750 square foot one-bedroom apartment in Park Slope less than half a block from Grand Army Plaza for more than $100k less than the identical apartment a few floors up. We did it all without a... [more]

I wanted to write this post because my partner and I were novices who came into the home-buying process knowing nothing about it. Though we made a few mistakes (detailed below) in the end we got an excellent 750 square foot one-bedroom apartment in Park Slope less than half a block from Grand Army Plaza for more than $100k less than the identical apartment a few floors up. We did it all without a buyer’s broker, so I thought our relatively successful experience might be of some help to people out there. Here are our key pieces of advice: Get to Know the Market We started looking at apartments in Fall 2014. Our budget for a one bedroom was about 550K and even when we started the search it was tough to find good one-bedrooms in this price range. We wanted a large one-bedroom with enough space for a potential small child’s bedroom but didn’t care about fancy amenities like new appliances, etc. For a few weekends, we would go to every open house in our neighborhood and surrounding neighborhoods. It was pretty grueling and we saw some pretty terrible places we still joke about now. It really is astounding the miniscule, average spaces that can be sold for half of a million dollars in New York. Seeing places in other neighborhoods helped us realize we wanted to stay in Park Slope, where we were renting, instead of moving to another area. After a certain point, we realized what to expect from an apartment by looking at the online listing and decoding the real-estate speak. For instance, if it said “cozy” or “quaint” that meant it was too small. At this point, we would only go to open houses that were generally apartments of a size/location that we would potentially want to live in. Anyone with half of a brain can do the same things that a buyer’s broker will do for you, which is basically pulling listing from the internet for you. We also found nearly every real-estate professional we met to be pretty insufferable. And we also knew that this could give us an edge over buyers w/ brokers, since the sellers’ broker would get a bigger fee with us. I did what a broker does--and more--by using the internet. I set Zillow and StreetEasy alerts for apartments in our price range in various neighborhoods. Another thing I did that I found to be helpful was I pulled the historical sales for one bedrooms within the last year in Park Slope and put them in an excel spreadsheet. I could see which parts of the neighborhood were discounted to others and which random amenities made an apartment go for more. It also gave me hope that there were good apartments out there in our price range! Try to Get the “Ugly” Discount In December, we went to an open house that looked very large on the floor plan of the initial listing. When I arrived, I saw the most horrendously decorated home I have ever seen in my life. Words cannot describe the poor taste in decor these people had. For instance, The bedroom had a large filing cabinet in it and a single, inexplicable magenta accent wall. And yet as repulsive as it was, the rational part of me realized that the apartment was actually huge and had a significant dining nook that could easily be a kid’s room. The walls were sturdy and there was nice molding around the doors and windows. The wood floors were actually beautiful. There was a huge walk-in closet. The one drawback was that it didn’t have any natural light. We talked it over and decided to make a bid. One compelling factor was that the same exact apartment right above it had come up on my spreadsheet since it had recently sold and I had loved it as it was decorated by interior designers. It gave me hope that this place could be beautiful too. In the end, we got a between a $50,000 and $100,000 discount simply because the place looked awful during an open house due to its paint colors and furniture. Be Aggressive Then I got a call from the broker saying the apartment went off the market as the apartment the sellers were buying fell through. As the holidays and early January dragged on, we found ourselves talking about the apartment (“Dark apartment” we affectionately called it) all of the time and realizing that nothing else we were seeing on the market compared or would compare. I would politely bother the buyer’s broker about when the apartment was coming back on the market as much as was humanly possible without making him hate me. That worked because he gave me a heads up when it was coming back to the market--and we had a bid prepared to go. We were even aggressive at the open house--we wrote something like “bid in” on the sign-in sheet so people would know that someone was seriously prepared to take the apartment. Be Prepared For What Comes After You Bid This was one of the major places where we messed up. First, the seller’s broker basically called up trying to extort more money from us twice. This was the one situation where having a broker of our own may have helped. The seller’s broker would call up and make very vague remarks about other bids but wouldn’t share the specifics of them with us. We’d have to go up a few thousand bucks each time to get the apartment”. After you are selected as the preferred buyer, stuff can move very fast. We weren’t really prepared for that and didn’t have a lawyer lined up. We literally had to find one on Yelp which was fine in the sense that she wasn’t a crook and did the basic due diligence but not fine in the sense that she didn’t really go above and beyond on a few key things. Read the Fine Print The absolute biggest mistake that we made was that we didn’t pay close attention to the closing date specified on our contract. It was for a date in June, though the sellers said that they would likely be able to close before then (we went into contract in March). And yet, as time went on, little things kept coming up that prevented them from closing. Under New York law, they have 30 days AFTER the date on the contract to really close, so the drop-dead date was in July. Believe it or not, the sellers wound up dragging the whole thing out until the absolute final day in July that they were allowed under the contract. The husband was literally dragging his stuff out of the apartment in garbage bags when we arrived for our final walk-through. This was really inconvenient for us, since we were renters with a lease ending in June. If we had really been aware of the possibility this could happen, we would have insisted on a closing date in early May. So get a good lawyer lined up in advance and pay attention to the date on the contract! Brooklyn Co-Op Boards Accept Everyone. That’s my understanding based on the super easy interview process and conversations with others (including some on Brooklyn co-op boards). I hope this helps someone a little bit! [less]