The Real.Est List
Insider trading: Selling your apartment to a neighbor
If you’re thinking of selling your apartment, check with the neighbors first.
Besides saving the broker's fee, you will likely be able to charge a small premium starting at around three-percent to an adjacent neighbor who intends to combine spaces, says Julie Friedman, a real estate agent at Bellmarc Realty.
"It has to be a flawless scenario," cautions Friedman. "Not all combinations work—it’s very rare where it actually does fit.”
The size of the premium also depends on your buyer's motivation.
“If your neighbor has three children in a two-bedroom apartment and desperately wants your studio, you may get more,” says Friedman.
When selling to a non-adjacent neighbor, your windfall will probably be limited to the broker’s fee. Friedman says that while buyers believe they’re also saving the brokers fee, they usually pay the same amount they would have paid using a broker.
One of the biggest advantages of an in-house sale is the near lockdown on board approval.
“The odds of the coop approving the transaction is significantly high, and the buyers don’t have to do an entire board package and the whole arduous process,” says Friedman. She noted, however, that many coops don’t allow residents to own more than one unit unless they’re contiguous—i.e., combination material. Moreover, some boards may refuse to approve a sale that will concentrate too many shares—and too much risk—in the hands of a single owner.
It's okay to quietly broadcast that your apartment is available through the doorman or to your next door neighbors. But Friedman says that casting a wider net--like putting a note in the mailroom or sending a building-wide email—is a bad idea unless you want to become a tour guide.
“It likely will only yield people satisfying their curiosity and it becomes very draining, unless you don’t mind putting yourself up to that kind of exposure,” she says.