We bid on a co-op today . . .

cool. good luck.

good luck. 2 bed?
glad to see people investing in NYC.

Amen, Ali. Hope you find a great, affordable home. Any hints as to what area and size apt?

Hope you didn't do it just to prove a point! If you bought now because you think the market is about to take off again, you may regret your decision. If you are an informed buyer (which I assume you are) and have a long time horizon, my hat is off to you. Congrats.

Where are all the other buyers out there??? Come and talk to us. Tell us your rationale for buying in todays market.

Congratulations! Good luck to you, Ali, & that fortunate husband of yours.

it's a Junior Four -- the two beds we like are still too expensive for us -- and there are other bidders, so we may miss it.

However, if that's the case, we have another lined up . . .

ali r.
{downtown broker}

good luck Ali!

p.s.: we do have a long-term horizon. I have been a homeowner for a dozen years, and this is basically a trade-up to get more space -- we have no kids now, but we'd like a place to put one (I'll take everybody's prayers on this).

And thanks for the "fortunate" husband bit, I'll tell him . ..

ali r.
{downtown broker}

Yes, luv, remind him regularly! ;) Prayers on the kiddies, too!

and another lined up... and another.... and another... and another....... and another.... and another.... :)

Good luck, and here's hoping for a kiddie for the kiddie stash!

ali..good luck and many prayers.

I'd be curious as to how much of a discount to the offering price you chose.

Regardless, good luck.

Good luck Ali! Drop me an email and an update. I haven't been around much with the move but I'm back now and like to know.

"it's a Junior Four -- the two beds we like are still too expensive for us "

or you could have waited a year for that to not be the case given...

"we do have a long-term horizon."

Good luck to you, Ali. I hope you will be very happy!

jgr, sometimes you just have to get out of that studio. Ali, best of luck, maybe the extra space will create some baby mojo.

Good luck Ali!

This is exciting. What made you jump in now?

Illegitimi non carborundum. ;o)

Hope it all works out great for you!

Good luck on the coop and a special prayer for a new addition....

Best wishes on the bid and all the hopes accompanying it.

I'd put right at the top of my "life's stupid unfairness" when teenagers and psychos have kids at will through nature or medicine and mature, responsible people with the emotional and financial capacity for parenthood are denied. Friends of mine just adopted and they were forced to endure a process as complex and invasive as could possibly be feasible in a democracy (granted with good intentions of making sure babies are placed in good homes). It just doesn't seem right somehow.

Congrats!!!

Make sure it is in a good public school district!

Thanks everbody for your wishes and prayers . .. keep 'em coming.

The co-op story is that our bid was rejected in the time it took me to leave my desk and walk to the subway.

We'll keep the seller private, to be nice, but this is in one of downtown's better buildings with a high down payment requirement. We bid 18% under ask, explaining that we had a 25% down payment in cash, but we would have to sell our current studio to make the rest of the down payment.

Our bid, by the way, was fully documented with a very thorough REBNY financial statement with lots of attachments. We are preapproved for the full amount of the mortgage.

I know that for a "good building" this was a bit of a weak bid, so we were fully expecting to hear a counter which was either "come back at full price, and you can have your contingency" or "you can't have your contingency, but take 3 or 4% off list and go borrow the rest of the down payment from your relatives."

Instead, we got neither. The agent was even a little embarrased that the seller came back with nothing. He told us "the seller says she's got time, she will wait for a better bidder," but he must have felt badly for us, he was stuttering a little as he said it.

Our backup apartments are both 20% down buildings, so they won't have to be contingent. Maybe we'll have better luck with them.

ali r.
{downtown broker}

Sorry to hear it, Ali, although you probably know better than anyone that in this market another great apartment will be along soon. Keep trying and I'm sure you'll get your place!

ali r.
He told us "the seller says she's got time, she will wait for a better bidder," but he must have felt badly for us, he was stuttering a little as he said it.
ali, that stuttering was a bold attempt to hold back tears, broker knows that your deal may have been his only chance at a commission this quarter. Quietly send the broker a note, explaining that owner may have been a bit shocked by your bid and that you understand. As owner thinks about her abrupt dismissing of your bid, she may have a reality check in the next few days. When she calls her broker Friday morning looking to see if your bid is still good, just be nice and say yes, for 2 more hours!

Ali, So sorry to hear about the outcome but I think you will be better off down the road. The market has significantly more downside than upside, so you have time in your favor. Besides, lots of owners (myself included) are still delusional about what their apartments are worth. When you and your husband eventually find the right place, you'll look back and be glad that this one didn't work out. Thanks for sharing and best of luck to you going forward.

Ali, how did the ask on the apartment compare to comps?

Stepping back, do you think your offer was significantly below market, or do you think the seller has unrealistic expectations?

This thread has brought tears to my eyes. Kind of like watching strangers cheer on strangers as they run the marathon. Nothing like the humanity of New Yorkers coming through in times of need. Unfortunately there is a delusional seller on the other side of too many real estate transactions these days. However, as my grandmother used to say, everything happens for the best. If a 2 bedroom is too expensive for an extremely talented professional RE broker (after the biggest real estate bull market in the history of mankind), it may be sign that real estate is just "too expensive". Why not wait? You don't have to put your money where your mouth is.

you have been in a studio with another person? you waited to trade up -- wait another year or two and get the 2 bedroom plus dr for the same price...

ali

you are a good egg -- hope it goes your way...

Very cool thread. Best of luck, Ali; and let us know when the seller comes back to you.

Sorry, but it also means this wasn't the one. Our negotiating on our "perfect" apartment ended with the owner withdrawing it from the market and we were temporarily crushed. Then the next "perfect" apartment appeared and now we own it. As I look back, I thank God we didn't get the first one. Funny how the universe knew it wasn't meant to be before we did.

It'll work out for you, too. Even better than you think!

You'll find a better place. Best of luck.

before i got to say congrats it is already dust in the wind. you never know though, that seller could be waiting a while for a better bid that never comes and you will be right back in action. good luck.

I completely understand your feelings, I just put an offer for a coop same deal 25% down. I made an offer 13% bellow the ask. Got a counter offer 3% bellow their ask. Honestly I don't feel like increasing my offer again. I think I will walk away and keep looking. At least they gave us a counter offer. like they say plenty of apartments to keep looking.

What they said. You've got time on your side here & remember ..... "This - or something better!"

What is it when sellers do not even counter offer? We bid on one place, I don't remember how much under ask, it was a starting point, you know. Instead of getting a counter, we got word from the agent the next day that there was going to be another offer close to ask. This is after the apartment had been sitting on the market for months. So, I took the agent at her word and said, no thanks, we were not willing to go anywhere close to ask.

Well, the next day, I get a note from the agent saying to advance my best and final offer. I asked a number of times if there was a counter offer but never got anything. After a while, I just felt that the agent had invented a counter party and we walked away from the deal. The apartment sat on the market for many more months. I am not sure if it had sold yet.

There is always another bidder as soon as you put in your bid...

ali, keep at it. My experience is that buying in a weak market is sort of like fishing......the more hooks you have in the water, the better your chances are of bringing in a trophy winner.

When I purchased in 1996, I believe I had over 10 offers in the works before the deal that I wanted came in.

I also think your chances will improve when the spring selling season is in the rear view mirror. Sellers seem to get optimistic during this seasonally strong period believing that everyone and their dog will be looking for their precious little pocket of air space. As the season comes to a close, hopes may get dashed as may the unwillingness to negotiate. One thing is for sure, prices will not be rising any time soon.

Best of luck!

407pas I also had a similar experience.There were 2 identical units above each other.I put a bid 25% below asking,both rejected without a counter.Then a third 2 floors above also came on the market.I put in the same bid and was told to jump in a lake.My broker came back and said I should up my bid to what they paid in 2006 because they were pulling it off the market.I told her I will wait till one sells to set the comp and her answer was you may loose them.Finally ,said if even 2 sell in the next 6 months then the last one be a steal.During all of this there were no other offers on any of the units.The brokers are desperate to sell at any cause.Beware!Very difficult to find a buyers broker,you may be better negotiating yourself.

michele,
We were negotiating on our own, without a buyer's broker. I like to see how they respond to offers. I hate it when it becomes fairly obvious that the agent has invented another bidder. Why not play it straight, get a counter offer from the seller, and see where it leads? I despise games.

There was also another place we liked a lot, listed by an owner, at more than $200k over the finally selling price. If the guy had had a reasonable price from day one we might have struck a deal when we saw the apartment. Eventually, he listed with an agent and lost more money through the commission. I just don't get it sometimes.

407...i saw it in south florida and now here, people will not and cannot face the reality of not getting the selling price their neighbor got..it's going to take a while.

ali, don't worry about the coop falling through. there are so many sellers smoking the funny stuff right now. a good 4-6 months and they will be coming back to you at your offer, but by then, you will probably have even better things in the pipeline!

My complaint is over how the negotiating takes place, not really about price. These broker games turn me off. A seller has every right in the world to turn down offers that they do not feel are reasonable. A counter offer shows some willingness to come to terms. The invention of fictional bidders shows deceit, something I cannot stand.

How nice to see folks on this board being nice to a broker for a change!

I think serge07 put it particularly well:

ali, keep at it. My experience is that buying in a weak market is sort of like fishing......the more hooks you have in the water, the better your chances are of bringing in a trophy winner.

Take your time. And enjoy the search.

i agree 407 but that is the risk each side has to take. it is very hard to get a bidder to bid against themselves (unless they are the NY Yankees, of course). the seller wants to try and squeeze a little more out and risks losing the buyer and the buyer wants the place so they have to punch in a little more not really knowing if there is a true 2nd bidder. i think you will see a lot more of sellers coming back to those early offers these days.

i don't understand how a seller doesn't even come back with a counteroffer. maybe they think they are playing hardball but that just seems like bad negotiating skills...or NO negotiating skills. we don't know. everyone has their reason, right or wrong.

407PAS - I agree about the invention of fictional bidders. I'm a broker, and I despise this tactic. I always advise my clients to put together their bids, ignoring any other real or imagined bidders. But when a listing agent tells me there's another bidder, I have to pass that information along to my buyers even if it feels fabricated. And of course it has an effect on their psychology, despite my best efforts.

I wonder if there could be a regulation outlawing the fictional "other bidder". I would get shot down at a REBNY meeting if I proposed it, but a consumer rights activist may be able to push something through. Anyone want to take up the cause?

Ali, best of luck to you. We had major struggles to have our first. Its worth it. Best advice...just try to relax and be positive. FWIW, the second couldn't have been easier.

I understand the venting at the "fictional seller" ploy. But recognizing it when you see it and learning how to incorporate it into your own bidding strategy is what raises you to the Negotiating 404-level of deal-making. Stomping feet about an unfair or unreasonable seller still doesn't get a buyer where the buyer wants to be--closing the deal at an acceptable price.

Just as most people would say they consider themselves to be "good" and "honest" despite the fact that many people are not, most people also think they are good negotiators when in fact they are actually quite unskilled and poor at it. My advice (not to Ali who has, I believe, done this for a long time) to most home buyers and sellers is to read the little booklets, books "For Dummies," or whatever is on the shelf at B&N about how to negotiate BEFORE embarking on this journey. There are principles you MUST know to be good--you can't wing it. What is the effect of revealing a time deadline? Making the first bid? Bidding against oneself? The "nibble?" Using an intermediary--real or imagined? What tone to strike? What form of communication is better in which circumstances: face-to-face, phone, email? How long to wait before responding to a counter-offer? How to present a bid--just give a number or offer an explanation or comments along with the bid? What is your end position? Have you considered the most likely responses to your offer and how you will possiblyl respond to each of them? Do you have an overall strategy as in a chess game, versus a move-by-move approach like checkers?

These aren't just esoteric questions and issues. They are fundamental to effective negotiating. Shouting about "unfair" or "stupid" sellers or buyers gets us nowhere in terms of achieving our goals of closing a deal. It just makes us feel a little better as we lose.

kyle - can you give us the cliff note answers to all the things you mention? make life easier. you'll be a hero.

kylewest - If you are referring to the "fictional bidder" (although I love the notion of a "fictional seller"), I mention it as something the industry could potentially outlaw because it seems within the realm of the negotiating tactics we are currently forbidden from practicing. As licensed brokers, we are not permitted to intentionally misrepresent the property itself. Why should we be permitted to lie about the disposition of other bidders? One can always say "there are other interested bidders" or "I'm expecting a full-price offer" - these things are not lies per se, but a broker should be able to produce a written offer if challenged to do so by REBNY in response to a complaint. I'm just saying.

In lieu of transparency, I do take your point about incorporating it into your overall negotiating strategy, and accepting it as part of the game - be it checkers or chess.

Thanks kylewest, I'll get the book. It might help. Maybe Americans are not good negotiators, it is not something that is deeply ingrained in our culture. For other goods, I tend to think that we let the market do the negotiating for us and then we pay the market price. Real estate throws everybody for a loop, with all of the parties involved, and the lack of transparency in the process.

I wonder how many deals are lost when a buyer feels manipulated and just throws up their hands in frustration at the whole process. A little respect for buyers would go a long way in the industry. I don't know how we could begin to make the process more open and fair so that buyers and sellers were happy with the results. I doubt that fictional bidders could be outlawed unless buyers had a way of verifying honestly that there was another bidder in play.

I buy stuff on eBay all the time. Of course, you can also run into trouble with shill bidders on there. I think I got shilled, even during the last 15 seconds of an auction. eBay seems to be on the side of sellers so there is little recourse.

I must say that I bid through another agent who never introduced a fictional bidder. In the end, we didn't agree on price but that is not the end of the world. I think he played it honestly and I had a lot of respect for him because of that. He is also a successful broker, from what I can see of his history.

Negotiating is very complicated and nuanced -- which is why I have a job -- but roughly the theory is to consider what the "best" alternative is for each party (the term BATNA is important here, but unfortunately the wikipedia entry on it isn't very good).

In general, as buyers, if hubby and I want to get into a fancy downtown building, we're going to have to have more cash. When I approach listing agents and I show our current hand -- which is that we have some cash some equity in the studio) they regard us as non-candidates. (I was, for example, told that an apartment I asked about in Stewart House had an accepted offer, even though my computer system tells me it's available weeks later; I think I might have just been blown off because I was a contingent buyer).

So to get to those "dream" downtown apartments, we're going to have to sell our studio. Doing so would free up our equity, which would enable us to go to 40% or 50% cash on a Junior 4, which would open the gates to downtown's "better" buildings.

However, as "rational" buyers, we have to look at alternatives. One of them is to keep the studio as an investment property -- and then buy something additional in a less stringent building where we only have to put 20% down. It probably wouldn't be in that cool downtown zone, so I would have a longer commute and it would be worse for my business. But on the other hand, we wouldn't have the hassle of selling the studio. So that might be our "best" alternative.

In other words -- everything is a package. Every apartment is great at some price and in some circumstance. As a buyer, you're trying to compare the total packages and not just fall in love with a particular view or a particular address.

ali r.
{downtown broker}

ali,
When you say you are a contingent buyer, you do not mean you would write a contingency on the sale of your studio into the contract on the other property, do you? My lawyer has always told me that no seller in New York will ever accept a contingent contract.

With the market stuck the way it is, is there any chance that contingent contracts could be done in New York? By the way, contingent selling was done all the time in the suburbs. Now, getting all the price and details to work out can be quite tricky.

Since buyers in New York generally do not accept contracts that are contingent on other sales, there are generally two ways to play that hand: 1) is to overpay by going to the seller and saying, "look, your list is inflated, and you can get an immediate deal with x% off list, but if you wait for me I will pay full list, so you will get an extra so many tens of thousands of dollars by waiting for me."

That is the counteroffer I was sort of expecting on the target apartment. We would have made that offer in the first place if we were DYING for it, but we actually weren't.

The second way to do it is to make the purchase contingent on financing, so that you as a buyer have to get mortgage approval. Sellers who won't approve a sales contingency (pretty much everybody) will approve a financing contingency.

The problem with this strategy for us is that the mortgage companies would happily let us borrow a ton of money even without the sale, so we effectively had mortgage approval no matter what, and we couldn't use that as a reasonable "out."

ali r.
{downtown broker}

ali...have you considered selling your studio first and moving into a rental while looking for the "perfect" apartment.

Julia - not a big fan of that strategy. It's a hassle to move twice, and it puts time pressure on the buyer. I think Ali has a very rational approach to the whole situation. And, her current building is beautiful and has quite well proportioned studios even if they are tight for a married couple.

ali,
It seems to me that your first strategy of overpaying on the next apartment puts you in a bind when it comes to selling your current place. I would think that you would hold out for more money on the sell side in order to cover the additional buy side cost. How long would any seller be willing to wait?

As for your second strategy, I have never trusted banks to save me from myself. ;-) It is simple, they hand out rope and it is your neck. I am still thankful that the coop boards of New York have saved us from an even worse fate. We're no Florida, thank goodness.

A contingent contract that found some give on the buy side would allow me to be more flexible on the sell side, possibly leading to more deals getting done in a shorter period of time. But, like you and I have said, nobody takes them, so we're all stuck.

Furthermore, there are no perfect apartments. Everything in New York involves trade offs.

I am also not a big fan of the move twice scenario. There can still be pressure on the buyer if they get a deal on their place but are unable to nail down the purchase of another unit before the first one closes.

Ali, congrats, but be careful!

ali - why don't you rent to this guy?

http://www.streeteasy.com/nyc/talk/discussion/8634-help-me-find-a-place-1br-or-alcove-studio-in-a-lux-building

correction: I, of course, meant "fictional bidder" in my earlier post.

> I know you guys make fun of me for being a bull, but at least I put my money where my mouth is.

If you waited until 20% declines to start bidding, I don't know if that makes you much of a bull...

Sniper, thanks for that -- technically my apartment is not an alcove studio even though I know other brokers market them as that.

ali r.
{downtown broker}

ali - hang in there. Life is peaks and valleys, so there is always something good coming to you soon!