Premium for third bedroom

Normally, I would expect a premium for the third bedroom, but by constraining the footprint of the apartment, you raise other issues related to flow, living space, bathroom placement, etc. Maybe a 15% premium? (+20% for the third bedroom - 5% for poor floorplan)

Why don't you post an example as this would also depend on location?

1200 F2 does not make for a very large 3 bedroom. Assuming it is priced under $2M I think the 3 bedroom aspect ( lay-out is normal etc) you will create some extra competition from buyers that 'need' a 3 bedroom but are constrained by price. If this condo is in a highly desirable location, good light etc it may not matter much, there is plenty of demand for great 2 bedrooms (bidding on one now, currently 5 offer after 5 days on market). I would not assume more demand necessarily, perhaps a smaller pool of buyers that MUST have 3 bedrooms. They may be willing to pay approx. 10-15% more all things being equal other than the 3rd bedroom. Look at the differential on a dollar per f2 basis...

Now a 2000 f2 condo with only 2 bedrooms (somehow non-convertible) would certainly be disadvantaged v a 3 bedroom. But lets stick to the op's scenario ;)

I bet if you went to www.urbandigs.com you could create a chart to try and quantify the difference based on closing price. Noah?

Keith Burkhardt
The Burkhardt Group

If the condo is 1400- 1500 sq ft, I can think of a 5-10 percent premium but nothing for 1200 sq ft condo. If one is so desparate for a 3 bed, buy a cheaper coop. 1200 sq ft 3 bedrooms are too small for New York ' taste.

agree with jsw & Keith on this for the simple reason that many consumers looking for a 3bedroom may not find the property if this upgrade wasnt done and shared in RLS by the listing broker. The fact that both are same footprint and size greatly diminishes the premium I would expect this to get though. However, I would expect a small premium of up to 10-15% depending upon the other attributes of the property. If those attributes are high quality, the higher end is more possible. If the apt attributes are poor, expect less. But either way, by converting to the 3rd bed you certainly will get the most out of marketing as many consumers out there either won't "see" the scalable option to an extra bedroom without significant impact to the existing layout. In their minds either the extra bed will be too small or the living space gets too diminished. When its fully done and marketed as such, consumers tend to be able to more easily "see themsleves" living in (or making do) in the space. In short, converting to that extra bedroom imo is the highest and best use of the space for marketing purposes vs not doing it. Just expect the premium to be within reason. I used this strategy when selling by junior 4 unit 2M at 245 E 93 back in 2006.