For Manhattan Buyers: Negotiating 101

By
Real Estate Broker with The Corcoran Group
For Buyers: Negotiating 101


Market data
Some important questions to ask your agent and why you should ask them*

Property Specific:
 
How long has the property been on the market?
Why: The length of time a property has been on the market may indicate the seller's willingness to negotiate.
 
Have there been any price reductions during the listing period?
Why: The amount of any price reduction, as it relates to the overall purchase price, may indicate the seller's desire to attract an offer.

Have there been any other offers on the property?
Why: It will be helpful to know what offers have been turned down and for what reasons.

What is the motivation of the seller?
Why: Motivation is a key element in any negotiation. As an example, if the seller has already purchased a new property, your ability to close quickly may be an attractive element of the negotiation.

What personal items are included in the sale?
Why: Anything the seller is willing to leave behind that you won't need to buy when you move in has real value. Consider those items in your offer.

Neighborhood Specific:

What is the price range of sold apartments in the area?
Why: This information is important since it will indicate the top and bottom of that specific market.

What is the average time on market for properties?
Why: Short market times may indicate a seller's market. If this is the case you may face competition from other buyers.

What is the list to sale price ratio in this market?
Why: This information will indicate seller's willingness to negotiate and by how much.

What is the average sales price per square foot of recent solds?
Why: This approach where there are similar apartments, amenities and improvements.


Final Recommendation:

If you will be financing the property, get pre-approved for a mortgage prior to making your offer. This will show the seller your commitment and ability to perform. Pre-approval can be extremely important in the sellers' market.

*Depending on the type of agency relationship you have with your agent/broker, he or she may not be able to assist you with these specific questions.

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Re-Bloggged 3 times:

Re-Blogged By Re-Blogged At
  1. Janis Borgueta 12/28/2012 07:11 AM
  2. Heather Littrell 12/29/2012 06:55 AM
  3. Ginger Harper 12/29/2012 01:46 PM
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Topic:
Home Buying
Location:
New York New York County Manhattan
Groups:
Luxury Home Agents
Real Estate Questions & Answers
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Condo Specialists
ABR-Accredited Buyer Representatives
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negotiating 101

Comments 74 New Comment

Rainmaker
228,176
Marge Draper
REALTOR, Keller Williams Realty, Menlo Park CA
Keller Williams Realty Palo Alto

Mitchell,  Bill Roberts comment sent me right to Lenn's and, as usual, she is right on.  I think that it is inappropriate for a buyer to ask those questions of the seller's agent.  Seems to me I could reference the code of ethics regarding that.

The other question that raises the hackles on the back of my neck is "Why is the seller selling?".  Not their business!

December 30, 2012 11:36 AM
Rainmaker
188,248
Mary Hutchison, SRES, ABR
Specializing in Brookside, Waldo, Prairie Village
Better Homes and Gardens Real Estate-Kansas City Homes

Oh Mitchell......Manhattan!  How I wish I could buy a second home from you!  No matter where you sell, these questions can be relevant.  thank you and Happy New Year!

December 30, 2012 03:25 PM
Rainmaker
499,164
Mitchell J Hall
Lic Associate RE Broker - Manhattan, NYC
The Corcoran Group

Thanks for all the great continued comments. I enjoy the discussion and the different perspectives from other markets.

Please keep in mind that all real estate is local and this post was written primarily for buyers of Manhattan New York real estate.

Manhattan is a unique place in the real estate universe. Not only does it have a large rental market (75% of the available housing units vs. about 5 - 10% in other markets), but it has ownership and other important differences that are often puzzling to newcomers and real estate professionals from other markets.

Approximately 70% of Home ownership in Manhattan is in coop apartments. The rest are condos, condops and townhouses. Co-op ownership requires submitting a comprehensive Board application (called a Board Package), being interviewed by the Board, and being approved. Not only does the buyer have to like the property, the property, the Coop Board has to like the buyer too. There are many variablesin Manhattan that are not applicable in other markets and states.
 
Both buyer and seller have attorneys in NY state. Sellers and their brokers do not have disclosure packages. Our only required disclosure forms are agency disclosure and lead paint.
 
Sellers and their agents make "no representations as to the physical condition of property". Most resales are sold AS IS. The guiding principle in NY real property law is Caveat Emptor - Let the buyer beware.
 
In NY the onus is on the buyer to conduct do diligence regardless of what seller or seller's agent may say about property. Any information that a buyer can obtain about property or seller's motivation may be to their benefit.
 
It may not help in negotiations but it will help determine if they should move forward and sign a contract. In NY all negotiations take place before a contract is signed. Offers are not contracts nor is an accepted offer. Neither party has any legal obligation toward the other until there is a contract signed by both buyer and seller.
 
Marge, Some buyer questions may be considered inappropriate in California, an escrow non lawyer state but nothing a buyer can find out here is inappropriate. It may be irrelevant but never inappropriate. I don't know what COE there is for buyers?
 
In my opinion the reason a seller is moving is a perfectly fine and relevant question to ask. A listing agent should be prepared for that question. It may come out during the attorney do diligence process because the reason they're moving may be related to the property.
 
A good attorney will read the board minutes as part of the do diligence process and may discover several complaints made by seller about a neighbor or neighbor's apartment.  Noise, smoke, dog or any other issues may be a "red flag" why they're moving. It may have an affect on the buyers decision and their "quality of life." after purchasing that home.
 
Coops and condos are different than selling houses. The buyer is buying into a community with close proximity to neighbors in addition to buying a home.
 
Richard, Days on market may or may not be relevant here but what is relevant is how many buyers saw the property at a particular price with no offers. In Manhattan, inventory is low. Every property comes into play when it reaches the right list price. There often is a correlation between time on market and number of buyers that viewed property unless it is so overpriced that few buyers even viewed it in 6 months.
 
After 25 to 50 buyers see a property and there are no offers then it is OVERPRICED. Simple as that! (The founder of my brokerage, Barbara Corcoran says 17 buyers but I'm being more conservative)
And yes, of course the buyer must want to purchase the place.

Mary, One of these days I'll find you the perfect Manhattan pied-a-terre,-)

 
Happy and healthy and New Year to all! I wish everyone a successful 2013!
December 30, 2012 05:52 PM
Ambassador
741,521
Hannah Williams
Re/Max Eastern inc.

just want to stop by and wish you a

 

Happy and Healthy New Year

 

 

January 01, 2013 02:29 PM
Rainmaker
499,164
Mitchell J Hall
Lic Associate RE Broker - Manhattan, NYC
The Corcoran Group

Thank you. Happy and healthy New Year to you too Hannah.

January 02, 2013 03:09 PM
Rainmaker
499,164

Mitchell J Hall

Lic Associate RE Broker - Manhattan, NYC
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