Listing/Price Cuts/Contract/Closing

I think the number people quote as "Days On Market" is from list to contract signing -- maybe Digs will jump on and you can confirm that with him. AFAIK, average DOM in Manhattan is running at roughly three months, and then I'd say it's roughly three months from contract to closing if there's a mortgage and a co-op board involved.

"To cut or not to cut" is more of an individual question -- there's been a conv-3 with outdoor space that I've been watching for a while, and I figure that the listing broker is going to see if better weather brings his buyers before making the chop. In general, if I'm representing sellers that have something sort of cookie-cutter, I counsel cuts faster than if what they have is more interesting -- I think if a property is unique, even if it's flawed, it makes more sense to wait for your buyer.

ali r.
{downtown broker}

Thanks Ali, I thought the listing average would be about 3 months but thought contract to closing would be shorter, more like 2 months. Interesting perspective on price cuts. Thanks again.

just look here - we spent years getting the nyc data problem engineered correctly so we can track this type of thing in realtime and in hyperlocal way - https://www.urbandigs.com/chart.php?type=meddom+60MA&nbhoods%5B%5D=Manhattan&proptype%5B%5D=all&price=all&bdrms=all - dom is day 1 of listing until day 1 contract signing status update by broker. If broker didnt update that CS date, no dom is calculated for the listing.

ps: cheers Ali!!

Our new system will have tools to answer your 2nd question re: price cuts on hyperlocal level, so that the conclusions are relevant to the subject property or sub market. We expect launch end April. Ill try to remember to chk back here at that time

IMO the broker listing the home needs to ramp up the marketing efforts before pushing the seller for any price cuts. The brokers have their standard advertising/marketing efforts for every listing. Before any price cuts the broker should increase their marketing efforts for a period of time. The last thing a seller wants obviously is price cuts so the broker needs to step up if not getting any offers before pushing the seller to cut the price. Cutting the price is easy anybody can do that. The seller can do that. Marketing the apt is what the seller hired the broker for so the broker needs to get to work and not look to price chop at the first chance.

Ali..what about ramping up the marketing? What about trying something different? What about making some extra phone calls instead of just waiting for better weather? What about spending a little more to get the property featured? What about doing something instead of your only course of action is deciding when is the best time to talk the seller into cutting the price?

@RealEstateNY, last two deals I had ---

Deal A, contract signed, then mortgage commitment at plus 38, closing at an additional plus 31, so 69 days. Deal B, contract signed, mortgage commitment plus 33, closing at an additional plus 42, so 75 days.

Both "easy" co-ops...Deal A the board met at will. I consider the buildings over where you are to have tougher boards, so it wouldn't surprise me if your timelines ran even longer.

@steveF , that's why it's so important to figure out how substitutable or trade-offable (somebody come up with a better word here) your listing is. If there ISN'T other inventory like your listing, but buyers aren't biting, that may be a marketing problem. (It might also be a selling problem -- an experienced broker will be able to diagnose from visitor feedback. )

But if there IS other inventory like your listing, and buyers repeatedly chose the other inventory, that's not a marketing or a sales problem, that's a pricing problem.

ali r

Steve - that's an interesting perspective. In Manhattan, I think that if the broker has (i) taken really detailed high resolution photos of the property (including the exterior), (ii) put up a detailed floor plan with measurements, (iii) written a clear description with the key data/costs, (iv) held a sufficient number of open houses (at varying times to allow for people with different schedules) and (v) fielded all inquiries with thorough responses (including following up), then there's really not much that additional marketing will accomplish. In my opinion, websites like Streeteasy has made most other marketing obsolete. Serious buyers can efficiently find and check-out properties efficiently if the broker does the above. If there aren't any "live buyers" (including people making inquiries and doing diligence) after the broker does what I listed for ~30 - 60 days (during a period other than the holiday season(s)) then I think that the market in Manhattan has spoken and that the Seller needs to adjust the proposed deal to Buyers (or decide that they value holding onto the property more than selling it).

TeamM, For the liquid segment what you are saying is correct but for luxury above say 4mm, it takes time and getting foreign buyers, out of towners interested. An extreme version of this finding a buyer for a private company worth 1b. Lot of Potential buyers but it takes time.

300 - I'll take your word for it - I'm not a pro. I would have thought what I said would be even more relevant for luxury buyers (particularly investors).

Selling a private company is a different animal because there is a whole additional layer of diligence, etc.

@steve, "ramping up the marketing" generally means different things to different people. While I agree that most brokers in NYC underspend in terms of getting properties exposure, you don't necessarily want to yell louder over a radio channel that isn't working; more often, finding a new channel and/or a new positioning is what works.

and in the market segments I work in -- nonluxury, what we might call the "middle market" -- the #1 thing that sellers should do that they don't want to do is renovate. I'll use my own personal apartment as an example -- if I put $150K into the place, I'd get back out $250K when I sell it. But the time/inconvenience factor of doing that renovation would be too disruptive to my family, so I probably won't do it. Yet at least *I* understand that my comps aren't renovated apartments.

Hey guys thanks for all of the interesting and informative responses, lots of food for thought.

urbandigs, your chart with filters is a very good tool, thanks. Kept us posted on your upcoming developments.

Everybody thinks their property is unique but some properties truly are unique (ex: a basement apartment with no light but very high ceilings, huge outdoor space and high maintenance). The more unique a unit is, the more narrow the market and the longer it MAY take to sell as a matter of course. You have to account for that when comparing to "averages". The less unique a property is the more it is just a price issue.

My 2 cents is that "marketing" means different things to different listings. Some listings merely need to be distributed with good photos, description and floor plan for buyers to take notice and show up. But that's just one part of marketing. The other part is selling the buyer once they have decided to see the home. This includes staging the home, as well as the actual selling that happens between the broker (or owner) and the buyer. A good broker will know how to differentiate their property from the competing properties that they know the buyers are also looking at, and make the case for why the home is fairly priced. But if a listing is properly distributed, properly staged, with a strong sales presentation and still doesn't receive offers after 20 showings, there's a good chance it is over priced. That said, the smaller the pool of buyers (unique properties, strange layouts, etc.) the longer it takes to sell. At RealDirect, we coach our Owner Managed sellers on all aspects of marketing - and let them know that they can always turn it over to our Agent Managed team if they want a pro to handle it.

Doug Perlson
www.realdirect.com

Sound logical Doug. My problem with brokers is the mentality of "talking the seller into listing for as low a price as possible" and "initiate price cuts as soon as possible" all this for....the quick sale. It's almost as if the seller is not only dealing with the buyers who want the lowest price but their own agent who want the same thing. Lets forget the price cuts first and let's concentrate on ramping up the marketing first.

Steve - I'm curious. What type of marketing do you have in mind? It strikes me that the internet has made the listing/marketing process so transparent that other marketing would be of very limited utility. I do see the value in having lots of open houses, and brokers certainly should do that - is that what you have in mind?