So you want to sell your apartment or house in New York City. What should you know? First of all, it is not the easiest or straightforward exchange of money for property as in other parts of the country. There are other factors that take their piece of your deal. Lenders must of course approve the buyers, and they must also approve your apartment building in total as a project that is financially sound, and your buyer might also have to find the approval of your neighbors if you live in a coop or condo. The decisions of selling and who is buying is not just black and white up to you alone.
Even in a seller's market, which is basically where we are in New York City for the time being, pricing your apartment over the market rate, or picking the wrong buyer who can't pass the scrutiny of the bank or board, can turn your listing into a stale-sit-on-the-market, too long, what is wrong with it? kind of listing.
So what do you need to know?
The first decision is of course, should I go it alone, or do I hire a real estate agent to list the property?
The average real estate commission in NYC is around 6 percent of the sale price. With the average cost of properties in the city nearing the one million mark, it is understandable that selling on your own is very tempting. Some have done well, while others have not. The for-sale-by-owner or FSBO's are not for the faint of heart, the busy or the ignorant to undertake.
There is an online account of "The FSBO Diaries" that tells of a couple that attempt to sell their Upper West side property on their own And also it is well known in the brokerage community that the individual who founded the FSBO.com site finally gave up and hired an agent to sell his $2 million condo rather than continue on his own.
If you do decide to sell it by yourself, here are some essenial bits of information you should be aware of:
1. There are two kinds of FSBO's: a. The kind where you pay no commission and only deal with direct buyers or b. the kind where you agree to pay a broker a 3% buyer rep fee which is the typical percentage that is paid in a traditional listing agreement.
2. If you pay no commission, you will be marketing only to buyers working without a broker. That wipes out a huge number of potential buyers as most people in the NYC market, up to 80% are represented by brokers. Why wouldn't they hire representation to look after their side of the deal?
3. Even if you do offer the buy side commission, your apartment may not appear on the radar of many brokers. That is because FSBOS rarely show up on the inside listings sites of brokerages, and they don't use the sites that home owners have access to not being a broker, like Streeteasy or NYTimes. Not having many buyers look at your property makes it so you have less folks to negotiate your prices and terms with. Buyer who are looking at FSBOs normally assume they are going to "get a deal" and will expect that you will sell the property 6% or more below market and they will offer you less than your ask and expect you to pull down the price, especially if you don't have multiple offers going on
4. Many brokers will refuse to even bring a buyer to a FSBO listing because of possible issues that for sale by owners can present. Many sellers are uninformed of possible liens or title problems that can come up in a sale, and possible sideline the process right before a closing. Having a seller with a good knowledge of the real estate rules and regulations can help avoid these problems, so be sure you have done your homework on your property and thenew rulings of the New York State real estate laws.
5. If you find a buyer and that buyer does not have a broker, you wlll be responsible for preparing that buyer for a board package application, in the event you own in a coop or condo building. You will also need to prepare your buyer for board interviews. Also, as you will be speaking directly to the buyer, your level of liability regarding legal disclosures may be increased. Lastly, remember that a buyer who is buying directly will expect to be sharing in those "cost savings" that selling on your own is providing you
That said, as long as you have a realistic view of what is expected and what you apartment is worth, it is certainly worthwhile to see if your neighbor might be interested in purchasing your apartment or house before hiring a broker You may wind up pocketing a premium from a neighbor eager to combine apartments.
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