Ask The Experts | Negotiations in Real Estate

We are often asked the question of what it’s like negotiating as a broker. People seem to want to be a fly on the wall to hear exactly how the magic happens.  So we thought we’d pull together a sample scenario that does just that: realistically convey the back and forth between seller, broker and buyer (because let’s recall:  the broker isn’t just negotiating with buyers but is always also negotiating with the seller in terms of what the market can bear).

Therefore, we welcome to the first micro-episode of “Ebb and flow: negotiations in real estate.”

Broker: We have run the comps on your apartment, and after visiting the apartment various times, and assessing its value, we believe that the apartment should be listed at $1.495M, considering that its value ranges from $1.3M-$1.6M.

Seller: I have lived in this building for over 22 years and I am not selling it for under $1.6M.  Plus, it’s a renovated apartment.

Broker: We understand, however your renovation is over 5 years old now and no longer feels new to prospective buyers.

Seller: But everyone wants to be in this building; the parquet floors and the location are real attractions.  This apartment has fantastic space! I am not selling it under $1.6M so let’s price it high so then we can absolutely get the $1.5M you’re talking about.

Broker: Mr. and Mrs. Seller, nothing has sold in the building for over $1.5M but we will price it where you want it.  We do want to reiterate, that buyers today are knowledgeable and research savvy – brokers are even more so…If we go on the market at that price, we will get offers on where the property should actually be priced.  Not to mention that when buyers are researching properties below $1.5M, your property will be missed despite it being overpriced.

Seller: Let’s try $1.6M

(Hits the market at $1.595M…)

Broker: Mr. and Mrs. Seller, our Open House was well attended with 30 people.  We received four offers, one at $1.3M and three at $1.4M.

Seller: The number has to start with a 1.5 in front of it.  We put $300,000 into the renovation.  I have to have a number starting with 1.5.

Broker:  Mr. and Mrs. Buyer, thank you for your offer at $1.4M but my client is countering at $1.5M.

Buyer: The trades don’t support that price.  There is a unit in the same building, on the same line that is trading at $1.3-$1.4M.  We can come up to $1.43M

Broker: I will revert back to my client with your counteroffer.

Seller: I know what my apartment is worth and we must have a 1.5 in front of it.

(A few weeks later)

Broker: Hi, Mr. and Mrs. Buyer – I have good news, my client has lowered the price to $1.45M.  Are you still interested in the property?

Buyer: I’m sorry but we have moved on.

Broker: Mr. and Mrs. Seller, we need to move on from that offer, they have already placed an offer elsewhere.

Seller: Great, because I want an offer with a $1.5 in front of it anyhow.

 

TO BE CONTINUED…

Date Your City | 4th Of July Fireworks

The 4th of July is literally right around the corner so we thought we would share the best places from where to watch the fireworks, compiling their respective hyperlinks to make your planning as easy as possible (short of plopping down a picnic blanket for you by 3pm).  This year, once again, the fireworks are lighting up the sky along the East River, to the cheer of all Brooklynites.

As per the media coverage, “the show promises to be bigger than ever as it celebrates its 40th anniversary. Fireworks will take to the sky along the East River near Midtown and the South Street Seaport. More than 56,000 are scheduled to burst forth at a rate of 2,200 per minute and all will be synchronized to a soundtrack of patriotic standards. New-in-2016 effects will include pyro-writing, where fireworks will spell out U-S-A.”

The best places to watch the 4th of July fireworks in NYC are:

Should the above compilation not meet your expectations, here are some other lists for your researching pleasure:

Apple Bites | Outdoor Dining Spots

Nothing screams summer like the great outdoors. Even in this concrete jungle of ours, there are still plenty of ways to frolic and dine in a green, lush space. Here are 5 outdoor dining spots creating buzz this summer.

La Sirena is Mario Batali’s latest creation in the Maritime Building in West Chelsea.  As per the NY Post:  Batali’s first new restaurant here in 10 years offers Italian cuisine for almost  everyone — even for the “wellness-aware” who don’t share the chef’s famous taste for lardo and meaty sauces. And, the scene’s up to the cuisine. A rollicking, mosaic-tiled lounge anchored by a 38-foot-long bar holds two very adult dining rooms at arms’ length. An outdoor terrace, to open in a few weeks, will swell the seat total to 300. The democratically diverse crowd ranges from young families, to snuggling couples, to Jerry Seinfeld hunkered down with two business guys, all three of them in suits and ties.”

Service Station NYC is another Italian restaurant whose patio can seat more than 100.  As per its own website:  “Opened in the Fall of 2015, the Service Station is now serving up an Italian-inspired menu for diners on the Upper East Side. Tucked alongside the Bentley Hotel on York Ave and East 62nd Street, the new Manhattan restaurant is just what the neighborhood needed. The smell of the specialty pizzas in the brick oven and the spacious tree-lined patio will beckon you in from the sidewalk. If satisfied taste buds and a full belly are what you’re looking for, the Service Station is exactly where you need to be. Fusing imagination and delectable ingredients together, you can’t walk away from this place without being impressed.”

Kingsley’s East Village farm to table offering opened in February and serves French and American dishes, alike.  Named #1 Fit for Foodies on Open Table, here’s what Time Out says about this newcomer:  “Entering the culinary world as a high-school teen, Roxanne Spruance apprenticed under top Chicago chefs Paul Kahan, Koren Grieveson and Dale Levitski, all before she left for college. After moving to New York, the ambitious young chef landed high-profile gigs at wd~50, Cafe Tallulah and eventually Alison Eighteen, where she received acclaim (and a Slow Food Snail of Approval) for her nose-to-tail cooking. That sustainable ethos carries over to her first solo venture, this 65-seat French-American spot in the East Village, where Spruance flexes her globally influenced training with dishes such as delicate chawanmushi (a Japanese steamed egg custard) nestling escargot and black garlic, and scallops served with sunchoke, walnut and chicharrones.”

Social Drink and Food boasts the greatest outdoor space of these pics, taking over 7,000 square feet via the rooftop at Hell’s Kitchen’s Yotel hotel. Movie screenings and weekly board-game nights keep the scene, well … social! As Urban Daddy puts it:  “It’s part indoor and part outdoor, in case water-bearing clouds arrive. Among the foodstuffs are various pizzas, chicken shashlik and a global street fair special that’ll change at the whim of the chefs (menu here). In a hollowed-out pineapple, you’ll find three straws granting access to a blend of rum, pineapple and coconut syrups, and their own special tiki tincture. It’s all called the Tropical Triple. You can look at that and the whole damn place here. The roof is still the spot for the Rooftop Cinema Club, which now features beach chairs.” Llama Inn was launched in November to much fanfare. According to the NY Post: “Former Eleven Madison Park chef Erik Ramirez wanted to put a sleek spin on Peruvian cuisine when he launched Llama Inn. Look for specialities like tuna tiradito laced with avocado, cashew-topped quinoa and the Dolly Llama cocktail (pisco, red wine, strawberries). “We wanted to marry the traditions of Creole dishes with NYC dining,” Ramirez explains.  Not only can the rooftop accommodate more than 25 guests, but he’s putting a slushie machine up there to churn out frozen pisco sours. We’ll drink to that!”

Monthly Gem | 21 E. 12th Street

What do starchitects and bowling alleys have in common?  Not much usually, except in the case of this issue’s Monthly Gem: 21 E 12th Street.  A beautiful 23-story tower is on the rise on the site of the Greenwich Village Bowlmor Lanes, which operated in the space since back in 1938, making it the longest continuously running alley on the East Coast. Billy Macklowe acquired 110 University Place back in 2012 (which also housed a parking garage).  The building, designed by Annabelle Selldorf, is scheduled to begin sales in the Fall of 2016, with pricing largely matching the expectations set by the neighborhood and quality: one-bedrooms starting at $2.35 million; two-bedrooms at $3.95 million; three-bedrooms at $5.45 million; four-bedrooms at $8.25 million; and a selection of townhouses and penthouses at $10.5 million and higher.  As per the NYT, “the apartments have been designed so that each will be a corner unit, which allows for more natural light, especially since the tower is set back from the street, said Ms. Selldorf, who recently was given a medal of honor by the New York chapter of the American Institute of Architects.”  The amenities of the 52 expected units will include a basement parking garage, a residents’ lounge area that is attached to an outdoor terrace and a children’s playroom.

At The Core | The Goldilocks Market

Summer is officially here, and everyone and everything is slowing down. Partially it’s because … well, it’s summer! The sunblock is out, subways are hotter, hamburgers are poppin’ on the grill and daylight lingers for hours.  Kids are out of school, people are going to the beach, and it’s hard to be hyper active with a margarita in your hand.  But partially it’s also because of current market conditions.

As we spoke about quite some months ago when the market was going crazy, we anticipated that at some point a new normal would be settling in … one in which bidding wars, quick-fire decisions and slim pickings would be a thing of the past.   We knew that the state of frenzy was unsustainable and would have to, at some point, calm down.  And, indeed, slowly but surely, we’ve been making our way to this new normal ever since. The market is where you might expect it to be: not too hot, not too cold, but just right – it’s a Goldilocks Market.

Inventory has nudged up from a few months ago, giving patient buyers more options from which to choose. Particularly in the $1-$3M price range, we continue to see very healthy activity, as this price point continues to be an entry point into ownership of a piece of the Apple.  Above the $3M level, we’re seeing properties take longer than normal to move, as buyers take their time to research and assess the value of their choices. It’s been some time since buyers have had the luxury of time and could afford taking their time to pull the trigger; to many it’s a welcome relief.  Consequently, trading is lower than it was just a few months ago.

For sellers, this means pricing is more important than ever. Late last year, sellers arguably could overshoot the market in the first two to three weeks, quickly adjust, and still benefit from high volume open house traffic and multiple offers. No longer.  The market has become far more discerning and far less forgiving for those sellers willing to “test the waters”.  Further, with more inventory on the market, sellers are beginning to feel the scrutiny of educated buyers and must absolutely price appropriately from the get-go.