The Real.Est List
The Haggle: Raising the price midstream pays off for seller--$30,000 to be exact
This week, we go behind the negotiations of a studio co-op at 345 West 4th Street that sold in December for $377,000, just $2,000 below asking price.
This 375-square-foot studio is on the second floor of a walk-up building. While the apartment needed work, Morgan said, its West Vilage location sold it.
There’s also a bit of backstory to the apartment: Morgan had originally rented this studio out for the owner for $1,900 a month. Although the building doesn’t typically allow rentals for more than two years, the board they made an exception because they liked the tenant.
At three years, though, it was time for the renter to make a decision about whether or not she wanted buy the unit in which she had now lived for a few years. The owner -- a friend of the tenant’s -- offered to sell for just $319,000. After a lot of back and forth, she decided not to buy.
On the market: July 2011 - $349,000. Relisted at the end of September 2011 for $379,000.
Offer accepted: November 18, 2011
Contract signed: December 8, 2011
Closing date: March 8, 2012
HOW THE DEAL WENT DOWN:
In July 2011 the owner placed the apartment on the market at $349,000. It stayed on the market for a week, with some activity, when the renter decided she wanted to take the owner up on his original $319,000 offer (just for her).
But months went by without a contract being signed, apparently over concerns the renter had about a lawsuit against the co-op board which never materialized, and the smells/noise from a restaurant downstairs.
In September, the seller decided he wanted to put the apartment back on the market at a higher price -- $379,000.
“Usually, we encourage people to lower their price after putting an apartment back on the market,” said Morgan, “but I though, ‘You know what, let’s try it.'“
The seller’s bold move paid off, and the apartment saw a three-way bidding war. A blind bid resulted in two below-ask bids and one just-over-asking price bid of $382,000, which the seller accepted.
The apartment ended up closing at $377,000 after some concessions due to a warped floor, a non-working dishwasher and slight water damage on the ceiling.
Sometimes waiting a little bit of time to sell can actually benefit an owner.
“From the seller's perspective, raising the price after going back on the market paid off. This was a market that was getting stronger. The market for downtown apartments is just crazy -- people are dying to live there,” Morgan said.
The fact that the seller was getting income from a renter -- and therefore not rushed to sell -- made raising the price a risk worth taking.
“It often depends how much time you have -- I always say that you need to take each seller’s situation into account when you’re pricing,” Morgan said.
For the renter/would-be buyer, being cautious meant missing out on what turned out to be a significant discount from market price.
“If you worry too much about little things, you can miss out on a really good deal,” said Morgan. “The attorneys did due diligence and didn’t find any problems. Being cautious isn’t a bad thing but there is such a thing as too cautious."
The Haggle explores the anatomy of a recently closed New York City apartment sale, so that when the time comes to buy or sell, you’ll have a better idea of what to expect. Got a deal to dissect? Send us an email!