Brokers pushing to lower prices

I bid on a few apartments and got the cold shoulder from brokers.

Uhm, yeah, new devs in Park Slope. We were told if you liked a unit, then bid for it and he'll force the seller to accept it. :) Those terms...

And then there's one which we really liked and he said the seller is not negotiable or will not take our bid...and we understood because the dev't is not yet finished and hasn't really fully come to the market.

As an agent always in the field, staring at pricing data all day everyday, I think is worth considering that we see more price movement that the sellers/sponsors themselves. We as brokers/agents often know when a development is overpriced and will often push offers that some wouldn't believe!

Brokers get paid when transactions get done. A broker sitting around with an overpriced listing can only benefit by pretending with the unrealistic client to be doing the right thing and only suggesting a lower price out of empathy. It is a game. Unfortunately, there are many sellers who are unrealistic and have no sense of the market either but the broker is unable to persuade them or risks losing the listing. Also, owners fall in love with their places, they remember the memories and all of the $ invested in it, even if it is just calling the plumber when the toilet is backed up and paying $200 ... the owner should get paid for those improvements, right? lol

no, no, no. Admit it, it is BUYERS' market now.
Inventories are exploding, in 6 months, today's offer prices(by buyers) will be then's asking price (assuming that the seller doesn't accept).
market is 20-30% over-inflated.
it WILL go down.

Yes. We recently looked at a terrific apartment (which we're quite interested in) and the seller's broker basically suggested we offer low. This sort of thing just would not have happened (in our experience) a year ago.

I meant no to the brokers bramstar, not to you. you and I are both in the same boat.

Brokers only get paid if the transaction goes through, they are your best ally. at the end of the day 500k translates into about a 10k commission at most, so 20, or 50 k really does translate into much money for the broker. The bottom line is that, sellers now know that they are in a jam. Everything that Steve and UD predicted is now coming into play, over time we will see substantial reductions in pricing, 25% and up. If you are a buyer with cash and you are ready to pull the trigger, lowball, and you will find more than a few sellers who are agreeable to your offer.

My number assume the deal is co-brokered. If there is only one broker, better for a buyer because they can go even lower in their offer. Remember, brokers are now as desperate as the sellers, if this market doesn't loosen up, many brokers will just quit or be fired because they won't be earning any money, Believe me, you won't insule them with lowball offers.

'09 -- my 'yes' response wasn't directed at you but to the question in general. I agree with your assessment that it's now become a buyers' market, illustrated by the seller's agent encouraging us to offer low.

bramstar
about 3 hours ago
ignore this person
report abuse Yes. We recently looked at a terrific apartment (which we're quite interested in) and the seller's broker basically suggested we offer low. This sort of thing just would not have happened (in our experience) a year ago.

Hugely unethical on the part of the broker who is just trying to collect a fee

How is that unethical? Any worse than telling the seller that they will get X price just in order to get the listing? Maybe the broker is working with some loony seller who won't accept that the market has changed and is looking to interject a dose of reality. The broker's job is the get the deal done according to market conditions, not hold out until the place falls further in value.

Which group is most in peril during the upcoming real estate slowdown? Brokers, owners or developers? Which group sees the most number of bankruptcies? I'm starting to think the brokers are the most exposed, are the first to go.

I've generally found (selling) brokers very anxious to get bids - even low ball bids. Their big challenge is to get their clients to come down to "saleable" price levels. I've found them quite happy to present low ball bids to their clients - as that helps them get their sellers in touch with reality.

Selling brokers really want to make things happen. And things are "not" happening at current offering prices.

Unethical? Absolutely not. They are simply doing their job in a tough market. And the more "evidence" they can show as to what real bid prices are the better. Otherwise, just more gridlock.

Are there any conflicts? Of course there are. Welcome to capitalism. You just have to be a smart shopper or seller who understands all the motivations.

>> Yes. We recently looked at a terrific apartment (which we're quite interested in) and the seller's broker basically suggested we offer low. This sort of thing just would not have happened (in our experience) a year ago.

Hugely unethical on the part of the broker who is just trying to collect a fee<<

I disagree. The broker is trying to make a DEAL. Who knows what his clients might have told him? Perhaps they've asked high (and know it) and are willing to come down. If the broker finds interested buyers why would he not try to get them to "yes"? Remember, the seller can always counter.

A low offer is infinitely better than no offer.

Although I think low-balling is an appropriate strategy, I think many (including me) are often discouraged by inflated asking prices and just walk away.

That's the big problem for brokers who are trying to establish a "price discovery" mechanism.

With stocks there is virtually always a bid and an offered price. With real estate there is now typically only an offered price. Brokers are trying coax out a bid price - even if the bid-offer spread is wide. At least establish the price level where there is, indeed, buying interest.

There's an old saying in investments, "A thing is worth what someone else will pay for it."

"price discovery mechanism" - i am running into this problem now myself.

i am putting my place on the market and have had 4 different brokers give me four different price points.
i am going to give it a go myself first, but i am trying to figure out where to price my place.

it is very frustrating. i have taken P/SF of the last few sales in my building, plus matched it against others in the immediate neighborhood. it is such an un-exact science. every place i look at on this site seems to have a "recent reduction" next to it, so even the brokers haven't done a good of putting them at the right price.

any advice on figuring out where to price yourself? thanks.

I think the reality of the market has set in to the brokers, and they are really kind of anxious for a deal to transact, even at 20% below.
The homeowner may be in denial. Even if their apartment is not desirable, they are too emotional about their home and take low ball offers personally.
A good broker will be able to demonstrate the fair and current market price for their home and advise them on accepting fair offers.

Based on what Urbandigs has been saying, deals are getting done about 20% below comps. Where you price would probably depend on how quickly you want to get rid of it. You could always ask 30% below and let the market be the "price discovery mechanism." Or, you could ask 10% below and wait for lower offers to come in, then negotiate.

IN this market, though, if you need to sell, key is not to get anchored to any particular price. HArd to know in advance where the market is for your apartment. If you find yourself insisting that it's really worth $X, so you won't take $(.9*X), even if that's the best offer out there, you'll risk holding on too long and watching the value erode further.

sniper,

Re: Price discovery mechanism

I think brokers are reasonably conflicted as regards their recommended "initial" offering price. There is probably a tendency to try to "buy" a listing with an optimistic figure; thereafter, they can always cut it. So, I think you need to be fairly engaged in the process yourself. If I were a seller I'd probably initially think in terms of mid-2007 comps. (That said, I'm skeptical you can actually sell there - but probably a good starting point.)

I'm also guessing that the mid-range of recommended offering prices would probably be a good starting point as well.

I bought my place in 1992 in a FSBO transaction which I generally think of as the best win-win arrangement. The seller started with a broker but couldn't sell in that tough market. Thereafter, the seller shifted to FSBO and cut the price some more. And that clinched the deal for me.

Whether you go the broker route first (which I think I'd do) or go directly to FSBO, I think it's real important to try to coax out a number of bids - even if they seem like real low-ball ones. That way at least you can find out where the market really is "for transactions to take place." You can always say yea or nay.

Ultimately, I return to my original assertion, "A thing is worth what someone else will pay for it." You'll probably need to be a bit patient. But also be realistic about where things can really be sold. And finally, don't be too patient if you really want to sell as I'm pretty confident that the next two years are going to see steadily declining Manhattan prices - so better to be early rather than late. Also, remember that if you intend to subsequently buy another place, that place's price is probably coming down just like your place.

Good luck!

thanks for the advice.

i have a true 2BR 1BA on E 79th street, 1100 square feet. the last unit like mine to sell in the building was almost one year ago to the day @ $950K (more recently updated kitchen). before that i was the last unit of my line to sell in the building (almost 4 years ago to the day) in an owner-to-owner transaction.

One of the brokers told me to price at $929K-$939K based on the last sq. ft. sale price in the building. the number they had for the sale and the number my management company has listed for the sale was actually 10% lower...and obviously they want the exclusive listing. another agent who has sold the last 4 units (any line) in the building told me $850K. i am thinking about going with $899K but am torturing myself over what the best number is. i am not forced to sell but would like to sell soon. i think $899 will get the under $900K searchers in (it should show well - good layout, possible convert to 3rd baby's room, etc.) and then i am open to offers there and below. does this make sense?

is there any more info i could give that would help me figure it out?
i will be hitting 4 or 5 open houses on the street today to see where the competition is.
thanks.

Sniper - the agent who sold the last 4 units is probably the one with the best sense of the market for your building. Can you ask that person if he/she would be willing to list at $899K? The agent is obviously not trying to "buy" your listing, and sounds realistic about pricing for a quick(ish) sale.
One conversation you can have with your listing agent regards commission structure. You can ask that the agent take only 3%, unless it's a co-broke. And co-broke at 5%. This way, if the agent singlehandedly finds a buyer at $850K, the lower commission rate makes the lower price more attractive to you. Some companies won't do it, but it's worth asking.

sniper - where on east 79th? That makes a huge difference.

1 bathroom is also a huge minus for most people (especially anyone that might want to make a 3rd bedroom for a baby, as you suggested), although it appears to be priced in if the last unit was under $1000psf at the peak.

I also think the want/need to sell is key. If you are just testing the market, and wouldn't accept any price lower than X, I would list at X+10%, or something like that. If you want to sell regardless, and are just trying to get the best price, I would err towards listing lower to generate more attention.

Good luck.

I agree with Tina, $899 is a great price to be at, and you can probably expect to have to do a price reduction if no interest by March. You should not list until the 2nd week of January when the holidays have completely left everyone's mind.

If you are finding your apartment going stale after 6 weeks, with no offers, you are going to have to take it down to $850k. The most important thing is to keep interest going and in a buyer's market the only way to do that is by being the lowest price, if you are a serious seller. Be priced as close to your bottom line as possible, but leave a little room for negotiations. It's a psychological impact buyers like to know negotiating.

thanks to all with advice.

tina - i actually have not chosen a listing agent yet. i think i am going to try to sell it myself first. the agent did mention 3%, or 5% co-broke. she was very open about sharing advice with me and encouraged me to try to sell on my own first then come to her later if i have trouble. that is an approach i liked.

newbuyer - the apartment is east 79 between 1st and York, full service doorman bldg (roof deck, backyard, discounted garage, etc.).
we live here now with two girls (4 and 2) in the 2nd bedroom. only 1 bathroom is a bummer as far as a selling point but the apartment definitely appeals to a wide range (i think): single or couple looking for a second bedroom/office, couple expecting or planning a child, couple already with a kid or couple with two small children, older couple who wants an extra room for friends/children/grandkids visiting. i want to sell but don't need to - i am not just testing the market. what i mean is that IF i am only getting offers 30% below asking (which is what a lot of people on these boards suggest) i am staying here and will be okay with it.

nointerest - $899K feels right to me. i just came from a 2 bed 2 bath between 2nd and 3rd on east 79th that was in very nice building, well kept, crown moldings, updated bathrooms, w/d in apartment, etc. and they now have it at $1.15M down from $1.25M 6 weeks ago. That puts them at a difference of $260K from where I would list. Square footage is maybe 50 square foot difference and my maintenance currently comes in at under $1200, they are at $1400. I don't think the extra bathroom, moldings, and w/d warrant +$250K. Maybe they are high or I am low (or just right). Market will tell. Also, we definitely don't intend to list until 2nd week of January.

Thanks to all.

I"m looking for a 2/1 in the east 70s or 80s. I'll probably be waiting till mid-January to really look but no matter what I won't pay more than $799.

where's spunky?

Unless made top quality renovations, $895,000 is a lot for a 2 bedroom/ 1 bathroom apartment.

Wainley - you won't pay more than $799? I could be had for $799.50 but i guess I will have to keep looking. Seriously though, you should check out 222 East 82nd Street #5F. I went to take a look today. They are asking $725K, motivated seller, etc. My building is definitely an upgrade from them (part-time doorman, only 6 floors, no garage, one slow elevator, etc.) but it is in your range. Maybe worth a look and could be had for less.

alipne - how can you make an arbitrary statement about "top quality renovations" if you have no idea what the apartment is like or what is was like when i moved in? that is curious.

I'd go with $890 K for now. See what sort of reaction you get from the market. See if you can get some bids so as to ascertain where transactions can actually take place.

Don't wait too long, though, to drop your price if necessary as things are likely to get a whole lot worse (from a seller's perspective) over the next couple of years.

Consider renting for a year or two before re-entering the market.

Good luck!

Just my $0.02 but I think that for many buyers with children, as is my case, square footage, number of rooms, etc. are more important that nicer finishes or a more luxurious bldg. Provided that both are in the same school district, I would just NOT LOOK at a 2/1 for 899K (or 800K for that matter) if there is a 1300 sqft 2/2 very easily convertible to 3/2 nearby (200 East 74th 3B) for 879K or a 1,244 sqft 2/2 condo for 799K further up (402 East 90th) More to the point, there is a 1300 sqft 2/2 easily convertible to 3/2 at 360 East 72 with low maintenance that has just been reduced to 899K from an OLP, 14 months ago, of 1.1 Million. And that one is a mint-renovated failed flip. So, my advice would be price it at 700K and pray. Honestly.

Tromp - i appreciate your input and analysis and thanks for citing examples but i think you have to go inside the numbers a bit.

Let's take a look:

360 East 72nd for $899K
The greatest hits from the write-up: "Tremendous potential- bring your architect and imagination!" & "While renovation is required..."
No thanks. Hope you have an extra $100K in cash to make it work.

200 East 74th Street #3B for $879K
How long would plan to live here?
2 years - $15,792
5 years - $39,480
That's how much more you would pay in maintenance not to mention possible increases or assessments.
That's an additional $658/month versus the maintenance my apartment costs. Unless that apartment includes utilities, that is real money that can go a long way each month for someone like me who has 2 kids.

402 East 90th Street #1A $799K
Different neighborhood - in my opinion this one is apples to oranges. Also, always a little wary when no pictures are shown.
Hiding something?

I definitely welcome any advice/opinions on helping me price my place but I think all the examples had some major downside to them that doesn't convince me that I should price my place down against them...although I could be wrong.

sniper, I we were just looking at rentals, and looked very seriously in your neighborhood. In fact, we looked at 435 East 79th - that's not your building, is it? Great residential area, great for kids, but just so, so far from everything, work, friends, etc. I think your comparison to the place on 79th between 2nd and 3rd is apples and oranges - so much closer to the subway, to central park, to everything. Not dissing living in your hood, just saying in my opinion it warrants a discount.

Similar point on the single bathroom. Of course it can be done - many things can be done, in the old country my parents had me and my sister in a studio apartment for a bit. But they didn't pay $900K to do it. I have to agree with Trompiloco, at least when it comes to families - someone who is forced to compromise on the number of bathrooms (and possibly location, if they think like me) to save money, is not going to be interested in paying a premium for nice finishes and such.

Not trying to wish you ill, just saying you should really think hard about your target buyer, and how to price/market to them. Good luck.

newbuyer - comment appreciated. maybe $899K isn't the right price, but i don't think $799K is either. used to be that people priced and waited for the bidding up to happen. i know i want to attract interest but at the same time, today you have to price and wait for the low-balling to begin, no?

about the hood/location: i had my reservations about my hood when i first moved in (pre-child number 1). i thought "man this is WAY over here...and all these damn strollers around! against my will i am getting old and changing priorities. ugh!" but this stuff became a non-factor. i used to work at the World Financial Center - man, that is exact opposite side of the island! not a problem...the X90 express is a 1/2 block away and goes directly door to door with the WFC with a few stops along Wall Street. Also, if you want there is the city's only Taxi-Share downtown just across the street. Last time i rode it - $5 to share a cab downtown with 4 other people in the morning. Now i work midtown - right outside my door is 79th street bus to Lex, then switch to take bus downtown to 50's or hop subway. If bus isn't immediately there I walk to Lex and feel good about doing it. In theory that extra avenue or two is much more of a problem than in practice. There are THREE playgrounds within 3 blocks that my kids love: One at the corner of 80th and York (by the school), Carl Schurz Park and John Jay Park. And as far as friends, that is subjective. When I am going to visit West Side friends we hop on a crosstown bus. Downtown friends we hop on bus to subway. Either way, we have to hop on transportation or cab. An extra avenue or two is not the end of the world. I do not deny that these are factors but I think the 2nd bathroom is the only one (and major) difference. Then again, I have never been forced to wait an hour while my 2 or 4 year old locks herself in the bathroom to get ready to go out with her friends...yet.

Sniper-apt sounds great for you. Why are you selling?

yes, it has been.

just time to get out of the city life...for the kids.

Why? More space, a yard, the schools? Where will you take the kids?

i will miss it but i want them to have a yard, the schools, maybe a pool, etc.
different lifestyle.

Topper - i just re-read one of your comments from above in which you say:

"Whether you go the broker route first (which I think I'd do) or go directly to FSBO, I think it's real important to try to coax out a number of bids - even if they seem like real low-ball ones. "

Why would you go the broker route first? Just curious for your reasons. Maybe I should.

I've had a lot of brokers tell me at open houses (which, btw, no one shows up at anymore) tell that the price was very negotiable. Hard to figure out what this means. I think sometimes a broker just wants to be able to go back to their client and say that they got bids, even if the bids are super low.

I saw an apartment this week at $1.55M - its a 3b/2bth that is probably 1525 sf or so and has already had one price cut. Broker said price is negotiable but my range is much lower. I think I'd rather let it sit without any offers and maybe have another nice price cut (over 100k) before making an offer. Figure a coop isn't worth near 1000/sf anymore, and this is a nice but hardly super lux building. Probably in the $750/sf range.

And to Sniper: the problem is that buyer don't want to pay what is "market" today because we know that tomorrow "market" will be even lower. I'm not saying this to scare you, but very few apartments are moving now -- really only the super unique and super desireable, not the typical nice but dime a dozen ones. If you bought 5 years ago, you are still going to make a decent profit, and certainly will not have to take a loss. Therefore, my advice would be to price is very aggressively. Something like $800k, that might get buyers to show up at open houses and make offers. Once the apartment is sitting on market and has price reductions, no one will come or bid -- they will just wait for additional price reductions. I mean, why make a bid on an apartment if you think the seller will lower the price on his or her own (and then you can make an even lower bid). I really think that if someone is commmitted to selling now, they should do so, end of story, at the best price they can. If you don't sell soon, 4Q 2008 numbers will come out, and then the NY Times and all the other media will not stop talking about how bad NY real estate has gotten (which we, having read Urban Digs and following the market real time, already know).

UES Buyer, I too have gotten the sense that brokers are telling everyone "just make an offer" - not because the seller might actually consider a bid 25% under comp - but more to demonstrate that they have actually been out there working for their clients.

UES_BUYER - I agree with pricing aggressively but don't you believe that most buyers will be low-balling in this environment. If I price at $875K-$899K I will probably get offers somewhere in the $800K-$825K. If I go with $800K to get in more traffic and all those "wow this one looks good and low price" lookers then they will probably be starting with offers in the $725K-$750K range, won't they?

I hit some open houses yesterday to check out what else is out there and got the same thing. It was kinda slow and all brokers said "the buyer is motivated...(hint, hint - please make an offer!)"

There are at least 25,000 registered real estate brokers in NYC. Sales volume in November was 331 units at an avg of $1.5MM per unit. That's $496MM at 6% = $30MM commission at half to the broker = $15MM divided by 25,000 brokers = $600.00 average per broker last month.

It's going to be sell or die this spring for the brokers. In order for brokers to eat sales have to pick up significantly. It's pretty obvious that an increase in volume would only be triggered by an overall reduction in prices. So here we go. It's going to be a Mexican standoff between the owners and the brokers. My advice to prospective buyers is to get out of the way before the shooting starts.

Prices are finally looking attractive out there! Glad I waited on the sidelines, but now it's time to strike.

SNIPER -- Yes, but you will at least get some offers. And lets say you have a few people bite in the 725-750k range. Then you can tell them the apartment was priced to move, you have a few offers at the low end of your range, and that the first person to get close -- maybe to 775k -- gets the apartment.

Getting lowball offers, for the reason I and others have said, is not such an easy thing. Don't think that because you price higher the low ball offers will then come in at more acceptible levels. If you price at 875-899, you might sit for 2-3 months, and then be forced to cut ask to 800 anyway (see my previous post).

Have to tell you that I'm in the market for 2-3 bedroom on UES and am pretty familiar with what is currently out there. There is a glut of 2b/2bth in the 900 - 1.2M range. Offers on those are coming in all under 1M. With only 1 bathroom you need to price a lot more aggresively as those all have 2 baths.

Just as a refernece, take a look at 310 E70 5M and 8K I think. They are both listed in contract with asks under 1M, so you can only guess what the contract price is. I personally saw 5M and it was a nicely renovated 1250 sf 2b/2bth that originally was asking 1.225. My guess is that the contract price is no more than $900k.

I haven't seen your apartment obviously, but how does it compare to these? I would think that a second bathroom is worth at least 100k, if not more.

sniper, for what its worth, I dont set the upper price limit on my searches to be my maximum price plus some % assuming that I am going to lowball by -20%. If I'm in the market for a max of 700k I'm not going to waste my time on listings at 850-900k.

Then again, I also have time on my side and am perfectly happy waiting for the right opportunity to come along and asking prices to come down to earth. I get the feeling that I'm not alone in this situation.

Actually, Junkman, I disagree with your post. Since I know that prices are falling, I've begun looking at apartments with higher asking prices for two reasons: (1) I expect that those apartments may have price cuts in the future so if I have time its worth seeing and (2) It gives me an idea of the "top" apartments so that when the $1.5M apartments start going for 20% less, I have a better understanding of what's out there.

That said, I don't base my offers (I've made only 3, and all several months ago) on the ask. I'm more interested in price per sf and location. Asking a lot just makes me not look because I think its a waste of my time.

UES, not that I disagree with your strategy but I don't think were at the right place in time yet for sellers asking 900k to entertain bids of 700k (just based on my example). Maybe 6-9 months from now when some sales go through at serious chops off the "current" ask.

sniper,

My "tendency" to first go with a broker is as follows:

Perhaps I simply lack self-confidence, but I am generally a believer in seeking professional help for important transactions. I have the feeling that a selling broker would be better at drumming up interest from both diy'ers and other brokers in today's very difficult market. I'd like to begin by casting as wide a net as possible. My impression is that sellers can also often shoot themselves in the foot when talking with potential buyers and may not be as effective at coaxing out bids from potential buyers. I think potential buyers may be more open with a third party broker than with the actual owner as well.

I also have a pretty demanding job and have real time constraints. I like to delegate to experts. Better that I spend my time picking the best broker with the best sales strategy. Let them put together a great web ad and run a good number of open-houses. Network with buyers' brokers.

IF that fails, then I'm all in favor of trying to sell on my own for say three months and cutting the price accordingly to entice the more price sensitive potential buyers. (I did buy my place in Connecticut without a broker when the seller did just this. When I'm ready to sell that place, though, I think I'll start with a broker first.)

Don't know if any of this makes any sense for you - just what makes sense for me.

Ok. Fair enough. Interesting post by Noah on Urban Digs the other day. I'm sure you saw it, but he claims that deals are coming through at 20% off peak prices today, and that includes the fact the volume is off by a lot. That doesn't put you too far away from 700k in your example.

For the apartment I saw that was asking 1.225 (admittedly high but not too far off comps), the final contract price was more than 20% lower.

SNIPER -- I assume you read Noah's post, but if not its worth reading. Reality is that there is no compelling reason for anyone to buy an apartment today, so seller's need to give a reason -- i.e. presenting an apartment at a price that is attractive enough to push a buyer watching the market to want to jump at it. Otherwise, deals just are not getting done.

UES, only nuance I would add is that if we're performing current searches for apts with say $1M ask, that $1M may not be peak prices so who knows how much lower you'd be able to go on the current ask as compared to X% below peak pricing.

Also agree that there is no compelling reason to buy today. I don't think we will see any price support until volume picks up in a meaningful way.

Agree, although most apartments I've seen seem to anchor to the most recent sales in the building or neighborhood as comps, and those announced sales tend to be from 2007 or earlier since the data runs at such a lag. Point Noah makes is that you need to be in front of the data, otherwise you get pulled along with it.

I agree that we need volume to get more meaningful data and price support. But that is kind of the point, right? The operative question, in determining market price, is at what price will buyers come out and purchase something.

I've been thinking HGTV should have a show called "Designed to Stay" - in which the snipers of the world modify their homes so they don't have to move. And sniper - don't do it! I moved to CT after my second child was born, and hustled back to NYC a year later. The greatest gift you can give your kids is to raise them in New York.

some good points. the same apartment as mine on a lower floor sold for $950K a year ago last week. that is $836/SF. i am thinking i may price at $875K which would be $795/SF a year later.

as far as putting in your ceiling on searches, i know what i can spend but it never seemed to make sense to not look a bit over to see what the differences would be in what you can get and what you would be sacrificing. when i originally looked for this place with a wife and one on the way (one baby, not another wife...if only...just kidding ladies) we definitely looked at 2 bed/2 bath but saw that they wre out of our range and the 1 bath would work for a while. i think the same would be true for the right demographic now as it was for me then. so with most 2/2 going for $1.1M+ in the hood then $875K would seem like the next best option. of course i know at $700K it is even better but i think the place is worth more in this market...until we really slide.

topper - on the using a broker topic i see your side of it but when i think of giving $50K to a broker before seeing for a couple weeks if i can get any interest, it is hard to convince myself. but i could prove myself miserably wrong.

tina - i confess, it is not just the kids. i love raking leaves! there is something so zen about it. seriously, though, it is getting harder to give them the kind of lifestyle i think they deserve. soccer once a week at asphalt green would cover all kinds of classes every day of the week in the burbs.

I can't see how anyone can raise their kids in the city. Where are you going to send them to school? Except for Stuvyestant, Bronx Science, and Brooklyn Tech, every single public high school in the city STINKS! THEY SUCK! And private school is super expensive. So if your planning on leaving the city to send your kids to public school out there at a later date, I think now might be the best time to buy in the burbs because the quality of lie in the city is going to deteriorate over the next few years.

Actually, NYC has a pretty good public school system, particularly in the nicer areas. Upper east side, for example, has amazing public schools.

I agree Alpine, this is one of the main reasons why I believe that prices for high end houses in the suburbs bottomed in 2007. I am not saying that they will be going up any time soon, in fact I believe they will stay flat for years. However, when people realize what 2-4 mil buys in the burbs vs. Manhattan, coupled with the inevitable erosion in quality of life, the burbs will become an ever increasing option for families with young kids.

Alpine, re the public schools, ever hear of Hunter College High School. According to the WSJ, among non-private schoolds, it has the highest placement of students in Ivy League colleges and yes, it's free.

Not on the high school level, UES Buyer.

mets, hunter is great. I know people whose kids got into Dalton, Spence, Collegiate, etc. who did not get into Hunter, it's very, very difficult to be admitted. Hunter also only takes kids in kindergarten and I believe sixth grade. The public school system is great through the elementary school years in many places. Middle school, not so good. I have one kid and rent, so the price I pay for private school would be more than outweighed by the mortgage and taxes in the burbs. If you have two kids, particularly if you have more than two, I would think the burbs would become increasingly attractive.

alpine, it's not really my preference, but some of the "family" neighborhoods are very insular, little alcoves of near tranquility. East End Ave, for example. Dull as hell, but your kids won't see too much of the real world, for a number of years at least, unless you make an effort, and some people like it like that.

Who hasn't heard of Hunter, Stuy, BxSci and to a lesser extent, Bk Tech, Townsend Harris (and for Catholics, St. Regis)? But they're HARD to get into. And multiply that effort by 2 or 3 for your kids. Most people I know with kids will eventually leave the city because they won't or can't pay for private and their kids won't ALL get into the selective high schools?

sniper, the location is a very personal/individual choice. For me, 2 avenues over make a world of difference, i know from experience. My sense is that there are enough people like me to reduce your buyer pool and/or warrant a discount, but I freely admit I don't know for sure.

177 East 79th Street #1415

03/31/2008 Listed in StreetEasy by Brown Harris Stevens at $2,100,000
05/07/2008 Price decreased to $2,075,000
10/29/2008 Price decreased to $1,850,000
11/11/2008 Price decreased to $1,840,000
11/12/2008 Price decreased to $1,799,000
11/22/2008 Price decreased to $1,680,000
12/08/2008 Price decreased to $1,650,000
12/16/2008 Price decreased to $1,625,000

I personally don't this apartment, even though it probably has a lot of character, because the bedrooms are tiny and not shaped well. But putting that aside, would ANYONE actually make on offer on this? I just don't understand the approach of tiny price reductions every 2-4 weeks as a method of garning interest. Even if I was interested, I can be faily certain that another $25k will be lopped on around New Years, and then some more a little later. Seems to create a massive disincentive to enter a bid because effectively you are ending the downward movement of the price.

I agree that certain things warrant a discount. There aren't a lot of apartments in my neighborhood that I see on here that are similar to mine. Matching up against the ones that are I feel $875-$899 is a discount to those.

119 East 84th Street #5C - $999,000 (10%-12% premium)
closer to central park/subway but only part-time doorman, maint. +$300

61 East 86th Street #33 - $995,000 (12%-9.6% premium)
closer to central park/subway, only part-time doorman, maint. +$200

111 East 75th Street #9B - $949,000 (8%-5.25% premium)
closer to central park/subway, NO Doorman, maint. +$150
NOTE: This building allows 50% financing, and has a 1% transfer fee payable by purchaser.

155 East 73rd Street, #8B - $949,000 (8%-5.5% premium)
closer to central park/subway, maint. +357

181 East 73rd Street #17F - $886,000
a junior 4, maint. + $100+

425 East 63rd Street #E11H - $860,000
150 sq/ft smaller, same as mine from park/subway, maint. +$169

There are some others but they are either 100+ sq/ft smaller or have much higher maintenance or some other negative, so based on the ones out there that are similar to mine I am offering a 5.5% to 12% discount over their asking price and I have lower maintenance (in a higher quality building - FT Door, attached discounted garage) than all the others. I am not trying to be argumentative (I am trying to find the right price to list myself) but how much of a discount should one have based on simply being two avenues over? Which I still believe has had no legitimate negative affect on my life the past few years save for the bargaining chip coming up now when trying to sell. Any response welcome. Everyone's feedback is definitely helping me out. Thanks.

sniper, I didn't look at any of the comp listings, but are any of them selling? Or just sitting there?

Even if one agrees that your view of the appropriate discount is accurate, it does you no good to be competitive compared to other apartments that aren't selling either.

As I've mentioned before, if you do really want to sell, I'd err towards pricing the ask lower to generate interest. Then you can decide what offers to accept or not to. It's a lot easier to explain to a potential buyer that you are not interested in selling for 30% below ask because you already priced low than it is to sit there at empty open houses because you priced too high, be forced to chop and have the listing get stale, etc. As always, just an opinion.

newbuyer - at least two of the ones i listed are in contract now.

your advice is good advice. i need to find that middle ground that will get people to show up, illicit offers (no matter where they are, i suppose) and then have the option to accept/reject them.

Does anyone know how to figure out what this sold for previously?

http://www.streeteasy.com/nyc/sale/326831-coop-440-east-79th-street-upper-east-side-new-york

one more question:

i had someone ask me if the price i was asking took into account the 3% for a buyer's broker. originally i had not thought about it. is that something that should be done or should you just come up with your price, bot worry about the commission and then should there be a commission it comes off the top? thanks.

UES buyer - it's time to upgrade to 'insider status'. Truly a bargain for $10 / month.

Sniper - Many buyers think that there is a huge geographic and psychological difference to live on EEA, York, First, and even Second. I'm glad you love the neighborhood and have found it convenient, but I personally would not live west of third. When I look at UES listings, I think of them as divided into three different price points: Park to Fifth, Third to Park, and everything further east. You may not agree with me, but a lot of buyers will see your address and automatically expect a significant discount. Geographically speaking, only one of the comps you list above is actually in your neighborhood from an east-to-west standpoint, and even then, it's 16 blocks south of you.

I agree with you. I feel the same way. What I am trying to get it is "what is the discount?" Is it 5%, 10%, 15%? I listed those apartments because they were comparable in some ways and the all come up under a search of Yorkville...I can only use what is out there....and my place at $875K-$899K is at a discount to them both in asking and maint. costs.

That being said, I think my place is tailored for a certain kind of buyer - a small or newer family where the kids are top priority versus what the parent wants or what makes them feel psychologically different. I may not currently have the hippest address but my kids are always smiling (and that makes me happy): 3 parks within 3 blocks, major P.S. 1 block away, 5 nursery schools within 1 to 5 blocks, Gymboree 4 blocks away, rooftop deck (great for heading up to during a snowfall or to blow bubbles when I am too lazy to take them to the park), and plenty of other families around.

But the question remains - how much of a discount is the right discount?

UES_buyer- I think it's all in public records, but I don't know how to get to it.

Frankly, sniper, no disrespect, but finding overpriced apts. and use them as a comparison is easy. But those apts. are just not going to sell until their owners quit drinking the kool aid and face reality. If you want to see apts. that are really trying to get sold, check this one up:
Half a block from Central Park, OK school district, 1000 real sq ft, 2br/2bt floor through of a townhouse in apparently very good condition, with maintenance of $1.5 per sqft, just reduced to 799K:
17 East 95th #1R
It's not in your neighborhood, that's true. It's half a block from Central Park.
And you want to offer your tiny 2/1 for 899K. Good luck with that!

http://queens.about.com/od/realestateandapartments/a/recent-sales-ny.htm
Co-op owners do not hold deed to their properties, but instead own a share of the corporation that owns the building. Until July 2006, co-ops owners had a nice privacy shield. Co-op recent sale info was considered a private transaction and did not appear on the public records because it wasn't "real property."

A new law in 2006 opened up the curtains and let the sunshine in on the private world of co-ops. The recent sale information published by the City, however, only begins with January 2004. (Some brokers and other specialists retain private historical records on co-ops sales.)

Tromp - I know a lot of people like to get snippy with people on these boards but that's not what I am here for. I am trying to discuss, gather information and come to a conclusion. Thanks for stating "no disrespect" then closing with "And you want to offer your tiny 2/1 for 899K. Good luck with that!" Seems to be a disconnect here. In other words, "no disrespect but now I am going to disrespect you." Love it.

Tiny? How can you state this on an apartment you have never seen, let alone been in. At least I don't remember having you over. Just for perspective go to www.crateandbarrel.com and punch in "Axis 4-Piece Wedge Sectional." It is a monster...and it currently sits in my living room with room to spare. In fact my original apartment search was centered around the purchase of this couch - a playground/fort-making machine in and of itself to a 2 and 4 year old. Also, the master is big enough to convert to a small infants room as well.

Besides the fact that you are comparing a 1st floor, no doorman, 1000 "real" sq. ft apartment that has +$378 maint., passes the flip tax (approx. $16K) onto the buyer and is located a couple blocks south of Spanish Harlem to an 1100 "real" (maybe even 1150) sq. ft., full-service doorman bldg., with elevators, -$378 maint. ($.92 per square foot), 16 blocks south and no flip tax paid by buyer. That being said, it looks like a very nice apartment

"No disrespect" but it is easy to find apartments that don't measure up and tout them for their lower price against completely different apartments. I know that it is in vogue for buyers to beat up sellers and tell them they better "wake up" but I am just looking for helpful discussion to come to a conclusion. That did not help.

Agree Sniper, that Tromps comments made no sense. I've been looking on UES (hence the name...) and would not want to move to the 90s. If I did, I would expect something truly great, not the apartment Tromp posted.

I do think, though, that apartments go up by 10-15% as you move closer to CP. Just the way it is, even if you like living further east. So I do think that pegging to comps from those apartments and offering slight discounts is not a good approach. No indication that those apartments are selling, so why join them?

Real question you have to ask yourself is whether you want to sell quickly or not. If I was a seller, I think the answer would be yes, since the only thing we are certain of here is that prices will not increase, so irrespective of whether you think they will go down further or not, there is very little to gain by taking it slow. I would actually encourage you to put it on the market immediately after New Years.

Just curious - have you taken a look at the apartments at 310 E70 I mentioned above? Two apartments there, both 1250 SF and renovated, went for around 900k. They have 2 baths and are btw 2nd and 3rd, closer to 3rd. Curious how your apartment compares, and whether that is a useful comp. The apartments also took a long time to sell in what was arguably a better environment.

Good luck, and keep us posted.

sniper.

Here's an idea: if you have the time, go look at some comparable apts in yr neighborhood & see what's for sale in yr price range/layout. Put yourself in the shoes & mindset of a buyer.

sniper - can you sublet your apt for two years, and rent in the suburbs? Even if property values decrease here in the city, chances are they'll stay low in the burbs as well. I thought I loves raking leaves, too - till I moved to a half-acre property covered with 100-yr-old oaks and maples. Sheesh! It was beautiful, yes - but totally oppressive. You end up hiring a company to do it for you, thereby contributing to the nonstop leafblower noise I now associate with the "country".

How old are your kids now? When they're both in school all week, your apartment will seem bigger. And you can volunteer to work in Carl Schurz park, or at the botanical gardens. I always advise my clients not to choose a permanent solution to a temporary problem. Try the suburbs (maybe sublet for the summer, and rent a house in Westchester or whatever) before you buy.

thank your for the constructive comments.

i forgot to mention that 2 of the 5 apartments i listed are currently in contract, so someone is buying (or bought) at those prices. also, i did go out this past weekend and check out some apartments - all on 79th street. all but 1 was 2/2 and they started at $1.15M and up. the ones you mention at 310 East 70th seem to be comparable in a lot of way save for the fact that they are 2 bathrooms and at lower floors than me. so what is the general consensus on the monetary value of 1 bathroom? those two closed at $995K.

tina - i think the co-op doesn't love the idea of subletting and there may be a hoop or two to jump through to do it. i may just rent in the burbs and if we hate it or miss city so much we always have the option to come back. i think i read you say that you are a broker - do you have an answer to my other question: i had someone ask me if the price i was asking took into account the 3% for a buyer's broker. originally i had not thought about it. is that something that should be done or should you just come up with your price, not worry about the commission and then should there be a commission it comes off the top?

Sniper -- You need to differential between final ask price and the closing price. The close price is less than the ask assuming the price was negotiated.

I think a second bath is a 75-100k upgrade, and the move from york to 2nd is another 50-75k upgrade minimum (although I personally like being in the high 70s better than the low 70s). Thats why I don't think you can go above 825-850 if your goal is to generate activity.

Broker commission should be included in price and is irrelevant for buyers since they don't pay it. Question might have been directed to whether, since you are not using a broker, you would give the buyer a discount equal to the percentage you are saving.

Also, those apartments are 150 sf larger than yours. According the $/sf you are looking for, that extra sf is worth $131,000. That puts your apartment at around $860,000 purely based on the numbers, not taking into account fact that it is further west and has second bath.

Sniper, your apartment sounds difficult to price, probably one of the (many) reasons you're getting different price quotes. You are very close not only to a good public school, but a couple of top private schools. I personally know a couple of families who live in very cramped (800-900 sf) apartments in that neighborhood who'd love to buy in the same locale.

You'd be surprised at how many people who send their kids to those two girls' schools want to live within walking distance, the closer the better. And they are not all wealthy.

I think a general "brokers welcome" is enough to add to your listing. There is no set number/percentage for a buy side transaction - 3% is standard, but I'm working on a deal right now where I will simply receive a finder's fee and the listing agent will take my clients through the board process.
If you are willing to do the heavy lifting - helping buyers with board package, being available for appraisers & contractors, setting up board meeting, working with mortgage broker, working w/attorneys for both sides, etc., then you are doing the bulk of the work we brokers usually do and you can offer a finder's fee instead. If you want the broker to assist in those matters, he/she may be willing to do so for less than 3%.
If the broker has been working with the buyer for a year, he/she may be reluctant to walk away for a small fee. But you never know. Discuss it with the brokers and let them know where you stand - they'll make their own decisions. But I wouldn't add 3% to the $899K just to cover the spread.

Also, Sniper, your price is your price. How you come up with it is your business. Sounds like a negotiation tactic, which is fine for them, but not necessarily your issue..

A lot of brokers like to give you a higher price then they really think so as to win your business. Personally, I would focus more on broker closing skills (if you can assess that) and negotiating the broker fee. The market sets the price. You choose your broker.

UES - you are right. no way to know where those apartments were negotiated to. my bad. as far as the square footage, they (310 East 70th) average $797.50 p/sf on the asking. that would put me at $877K asking based on square footage alone. if you say subtract $75K for the bathroom and another $75K for being at 1st avenue that would put me at $727K. that seems way low (for where things are now - not accounting for the fact that we are going off the deep end any day now) based on what i have seen out there and on this site. $727K would make me the best bargain around by a landslide at 660 p/sf. i would buy my apartment from myself in a heartbeat for that.

tina - thanks for the broker commish advice. can you define "add your listing?" does this just mean when brokers pick up my listing online or in the NY Times they will add it to their listings/websites to take their clients to see it and then if the buyer makes an offer i then negotiate a fee with the broker? thanks for helping me understand the process.

also, thanks to everyone chiming it. i only found out about this site a few days ago and all of this advice is proving invaluable.

See your point and think I was unclear bc of the 2 posts. Think its a combination of factors, so, once you subtract the calculation based on sf, you no longer need to give the full discount for the lack of 2nd bathroom (which is probably the missing 150sf). However, since all sf are not created equal, you would still need to provide a discount for the lack of 2nd bathroom -- maybe around 25k. Fact that you are further east is what it is, and I think the fulle discount is warranted -- I thought it was York, first is a little better.

I think you wrote above: "the same apartment as mine on a lower floor sold for $950K a year ago last week. that is $836/SF. i am thinking i may price at $875K which would be $795/SF a year later."

So based on this comp alone, you'd need to drop 120k off your ask, which gets you to 875k. Now you are further east (but only an ave and half) and have only one bathroom. So the question is what kind of discount off the price per sf of this apartment you should give. Thats a decision I'd leave up to you, but certainly one would think there should be some discount.

If a broker asks to "add your listing", I would say absolutely not.
If they have actual buyers already, they can bring those buyers to your property. But don't let brokers advertise your fsbo!!! It just confuses the market - you'll find a half-dozen listings on craigslist for your own place, with different contact info and sometimes even different prices. Buyers will be turned off, because they don't know where to turn. Some unscrupulous brokers may list it anyway - if you find them, report them to the Real Estate Board of New York.

UES - I think I was unclear based on your response about the comp I mentioned:

"the same apartment as mine on a lower floor sold for $950K a year ago last week. that is $836/SF. i am thinking i may price at $875K which would be $795/SF a year later."

The SAME APARTMENT that I was using as a comp at that point was actually in MY BUILDING 2 floors lower at $950K. I think you may have thought I was talking about 310 East 70th ("further east," "need to drop $120K" which would equal 150 sf). Sorry for not clarifying that. So does that change things?

Tina - so do they expect 3% when they bring someone to my place or do they bring them and know they will have to negotiate a few with me?

I can't say what anyone "expects" - but it's up to you to define the compensation you're willing to give a broker. In a broker-to-broker deal, we would post the commission split on OLR, so the buyer's agent can see in advance what the fee would be. But since it's your place, you can define it as you see fit.
If a broker calls in advance to make an appointment, discuss the commission at that time. You could say, "look, if you get me my asking price and handle all the buy-side hassle, I can give you 3%, but below that it'll be a finder's fee of $2500 (or $1000, or $5000, or whatever you determine) and I'll take care of the co-op package." Or whatever. You see what I'm saying.
If the broker turns up with clients at your open house, you can usually just take them aside and say "We can discuss commission later, if you like." If their clients fall in love with it, then you can work it out with the broker.
If the broker knows the board and the co-op, has sold other units there before, and seems to have a good relationship with his/her buyers, it may be worth peeling off the extra cash to have him/her handle the buy side. If it's just some creepy lowlife, you'll have an easier time handling the transaction yourself - so offer the finder's fee instead.

No, I got what you were saying.

Off the top of my head seems like you are looking at a 5.5% discount on $/sf from the apartment that sold pretty much at the peak of the market (assuming it sold in Dec. of 2007 and went into contract 2-3 months before that). Is that right or am I doing my math wrong?

I think you have all the info you need to make a decision on how to price. I'm a buyer on the UES, so I'm telling you the way I see things today in that area - glut of very similar apartments that buyer's are afraid to purchase. You need to chose a price you are comfortable with. From my personal experience at open houses, I've been a lot more impressed with sellers who can look me in the eye and say, "hey, this apartment is a bargain and is priced very well even for today's market, and we expect to get offers and to engage with buyers..." as opposed to seller's that say something like "well, its a hard market to price in, so we are accepting all offers and there is room to negotiate...".