Status Update: Has anyone had any success lowballing recently?

forget lowball... nothing like a sinking market for a 20x leverage asset, loss of job/income, comps being sold for bank debt, and a mugging or two.... let time be your friend young one... patience.... no wait a little longer.... no just a little more..... now! Buy Techie's apartment for 50% off.... good hunting... and at least wait out the spring selling season when NO ONE buys a thing after bonus season.

remember ... we are just leaving the dug-out to start the game... and I hear we are gonna go to extra innings :)

Totally agree w/ W67. Keep your powder dry. Wait a few months & you'll probly find what you want for (way) less than $400.

"nothing like a sinking market for a 20x leverage asset"

5% down? dwell, do you even read what he says, or just cheerlead any bear you see?

apparently cheer lead... but its mutual :)

what's 5% down? confused on w67.

tech: did you read what I wrote? OK, yer right: I wouldn't buy your apt. Gosh, yer literal.

cheer leading a bear? I prefer bear bating & bull fighting.

Oh, just to add a small addition: I bailed out of a contract. My lease expired on September 30th and I moved back in with my PARENTS expecting to close in early November.

So, the key point in this comment is that I'm living with my PARENTS, commuting 50 miles into the the city and back each day.

If things aren't going to drop for another 6 months, perhaps renting might be a good idea.

mdasch: hope you didn't lose too much. Wait & see how things go. At least ya got free laundry, right?

I lost 18k out of a 53.5k deposit. However, I would have had to pay the transfer taxes; new construction in Williamsburg.

I figured it's a small loss now considering the ridiculous loss I'd have 5 years from now when I'd want to sell. And with the tax abatement issue impending, I wouldn't be able to sleep at night.

So, the 18k would have gone to transfer taxes I won't need to pay if I buy in Manhattan. Even Steven, I guess. That is how I rationalize it.

I can afford probably about 2k a month. Maybe 200-250k to put down.

And yes - It's like my salary doubled. No rent. Free food. Free laundry. A garage for my terribly beaten up from NYC parking A4.

But again, unless I want to die alone and lonely, I need to move out.

mdasch,
sorry to hear you lost $. Can you deduct that as a loss on yr tax return? I think you made the right decision. Watch the market & prices. I think prices will decline in 2009, maybe even into 2010. If you don't want to live w/ yr parents, how about taking a share? Check craigslist.

mdasch--"And with the tax abatement issue impending, I wouldn't be able to sleep at night."

Did you hear something about tax abatements ending in general or just in the building you walked away from? With Bloomberg so scissor-happy I've been wondering just how safe those are in new construction now.

On another note-maybe stay at your parents' long enough to save the money that you left with the developer and just hang tight for a better more secure place.

mdasch...you cannot find a decent sized studio for under $400k. I'm hoping for studio prices to go under $350k.

Kimerama: It had nothing to do with a change. The tax abatement would be null after 15 years; at which point the taxes would be over 20k/year. My intent was to sell after 4 or 5 years, and let that become someone else's problem.

Julia: Looking at in contract apartments on this very site, I'm not sure that is true. It seems a decent 1 bedroom can be had for about 450k. For 400k, a studio shouldn't be a problem.

I'm not a size queen (king). Get me 5+ floors up and give me a semi-obstructed view of the empire state building and I'm happy.

julia, who let you out of the stable?

Hey julia, here's a softball question for you:

is the market going UP or DOWN?

Julia: if you can avoid it, don't buy a studio. Their values plunge in bad RE markets. Wait a bit & try to buy a small 1bd, it will retain it's value better than a studio.

mdasch... drove and RS4.... fun!...

On the RE front, do what I do.... get a list of "reach" apartments that you thought you could never afford and see their prices getting chopped and know that your powder pile is getting bigger and your enemies getting smaller. $18K is chump change compared to a 40% decrease in your most highly leveraged / biggest asset that you could buy (I'm assuming you are younger and don't have other large assets)...

w67: Good idea.

I am younger. The risk is only in my assumption that losing 18k now is nothing compared to a future loss, which I'm confident there would've been. Especially being able to get a sizable chunk of my deposit back. Everything I have in my portfolio is looking miserable, and since I'm younger I'll ride that through. As for real estate, I don't mind waiting if the drops in coming months will be as great as people think. Obviously no one knows.

dwell..I agree about value I sold a studio (no alcove) last year and am renting hoping to purchase a one bedroom for under $450k and had no luck so I'm hoping for an alcove studio for under $350k and renovate it to a one bedroom.

Julia: What is your logic for not waiting until the spring?

mdasch - time horizon is absolutely critical here. Due to transaction costs and risk, I am against buying anything for less than 8-10 years in any market, let alone a falling market, unless buying is substantially cheaper than renting (which for the most part it's far from, tech_guy's exceptional case notwithstanding).

So, say, if you 27, and well may get married, have kids, etc. in the not-too-distant future, I would say rent (or live with your parents if you can stand it), save your money and buy at least a 2-3 bedroom whenever you are financially ready to do so, whether that's in 1 year or 5 years. No crystal ball here, but I would guess even if prices drop quickly, they're very unlikely to come back up quickly, so I don't see a need to rush in.

On the other hand, if you're 22 and could live in the 1-bedroom for 10 years, I see no reason not to lowball. Offer something that makes it meaningfully cheaper than renting. If they say yes, enjoy the apartment for a long time. If they say no, you've lost nothing.

If you're talking about buying something for an investment, or perhaps something to live in, and then keep and rent out, then it gets more complicated, since there's a lot more considerations.

newbuyer99: It's a combination of something long term, and an investment - so in 5, 10, 15 years... when I do want to move, I can upgrade.

I'm 24. Have no desire to have kids - ever. Quite frankly, I'd rather rescue another pup than have a kid any day. In terms of kids, if anything, I'd rather adopt to avoid the puke/feces stages of parenthood.

I can stand living with my parents, but prior to living with them, living alone on the UES spoiled me. The money is obviously better; I'm saving a lot.

My only rush is the desire to live alone again and be back in the city. The commuting is a pain. As is talking about my day over dinner.

If the likelihood of substantial price drops was 3-5 months, I'd have no problem waiting it out. If there will be an unlikely drop in that time frame, I suppose I'd begin lowballing and offending sellers and brokers; something I have no problem with.

mdasch, why not just rent in the city for the next year and buy at the end of that? That way you'll have more time to wait for the market to fully decline and you won't feel the pressure to act too quickly since you'll already be back on your own in the city.

JohnDoe: That is my bind. For argument's sake, let's say I rent for another year. Between rent and utilities, let's say that will cost me $22,000 for the year.

If I buy in six months, and continue to live with my parents, that is an additional $11,000 I could put into a co-op, vs. the $22,000 loss I'd take if I rented for a year.

Hard for me to judge your time horizon from the below, 5, 10 or 15 are very different, and adopting kids is very different than not having any.

There may well be deals in 3-5 months, but no guarantees. One strategy would be to give yourself a deadline, say until March 31, put in a bunch of lowballs, and if no one bites by then, sign a 1-year lease somewhere.

As an aside, if you have a dog or want to, I would strongly suggest you consider only apartments with private outdoor spaces. Also just an opinion.

mdasch - it seems like there are two different questions here:
1) the cost of renting vs. buying, and
2) whether you want to pay to live on your own or live with your parents.

As for the second, you'll ultimately need to decide how long you want to live with your parents in order to save money. Whenever you're ready to move out and live on your own (whether it's now or in 6 months, or at some other point), you'll still need to decide whether to rent or buy.

One big thing to keep in mind in the rent/buy calculation is not to think of money paid on rent as lost in a way that distinguishes it from money paid when you own. When you own, your maintenance and the part of your mortgage that goes to pay interest (minus any tax benefit) are "lost" in the same sense as rent payments are (that is, none of thse costs goes to increase your equity).

Of course, there are a lot of other things to take account for in the rent/buy calculation - e.g., potential appreciation/depreciation, opportunity cost of your down payment - and you can find many threads on these boards discussiing these.

Best of luck.

newbuyer: That's a good idea setting a deadline. As for outdoor space, it isn't an issue. He is a service dog. I can have him in a no-pet co-up, and I bring him to work with me. He certainly lives a better life than your average city dog.

Johndoe: All good things to keep in mind. Thanks.

Mdasch, you don't have to take on a one-year lease. Find a flexible sublet that only asks you to commit for 3, 6, 9 months, etc. Or find a condo owner that is trying to sell an investment property. You might be able to come to a good deal with the owner if you can be flexible on when it needs to be shown. It will allow the owner to say to buyers that the apt. generates rental income and also shows the place furnished -- always a plus when a unit is on the market. And you get to move back to NY : )

mdasch...I'm waiting until july, 09.

Make a wish list of 20 or more units. Don't get emotionally attached to any of them. Be patient for the next 6 months. Once you see sellers chasing the market down, then you come in with lowball offers. If you have cash, you can really hammer the seller, as financing is not going to ease up any time soon.

If you sublet, the co-op board is going to require a 12 month lease, otherwise they will not approve you.

"Financing is not going to ease up soon".

It's funny. I was going to take out a mortgage of 200k. When I backed out of my contract, a reputable bank had no problem offering me 417k instead, with a gift of 13k from the sponsors to cover the difference for one year.

Of course, 417k would be WAY out of my range, and I'd never be able to afford it. Seems like banks have learned nothing. It's smart for them, I guess: In a year they can have my money AND my house.

I declined - they said "we're just trying to help you". Right.

"Any further inquiries about this matter should be directed to my attorney."