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New Rules for Manhattan Apartment Buyers and Sellers

By Mitchell J Hall

Real Estate Agent

January 14, 2009 11:11 AM

For the past decade sellers had the power in the NYC real estate market. No longer can sellers dictate every aspect of the transaction. No financing contingencies, shopping around offers, listing brokers double ending deals are no longer the norm.

Currently buyers have the upper hand. Buyers are putting in low offers and they are getting countered. Developers are offering incentives and are marketing value rather than luxury.

Buyers are putting in multiple bids on several properties just as sellers were accustomed to receiving multiple bids and playing buyers against each other.

It won't last for ever as real estate goes in cycles. It is however the best buying opportunity since the early 90's. I remember the last buyer's market well since I bought a new apartment in 1989 right before the market turned.

New Rules:

For buyers: Get pre-approved for a mortgage before you start looking. Work with a local experienced buyer's agent. In NY state unless your agent discusses and/ or discloses their agency relationship with you according to state law they are a sub-agent of seller and have a fiduciary duty to the seller. For buyers that have been looking for a long time but have been trigger shy now is the opportunity to finally get that lower price with favorable terms - but please be realistic. Pay attention to comps. Know what you're asking for and what you're getting.

For sellers: Motivation is key. Your apartment has a lot of competition. Make it stand out from the crowd. Be flexible and consider all reasonable offers. Consider having your apartment appraised before listing it. In a declining market appraisers are deducting 1.6% per month from the most recent comp. Price to the future not the past. Is your building pre-approved by a lender? Does your coop or condo have a Fidelity bond? now required for FHA loans.

You NEED to hire a REALTOR® that is an Internet Marketing Specialist if you are considering selling your Manhattan condo or coop in today's market. Approximately 85% of buyers are searching for their next home or investment on the internet. Most internet shoppers never leave page one of Google. Would you like to see your home on page one of Google?

Buyers: Click here to receive current Manhattan listings.

Sellers: Click here to find out how much your apartment is worth in today's market.

Local and global real estate questions and referrals are always welcomed.

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Elizabeth Cooper-Golden

Huntsville Alabama Real Estate, (@ Homes Realty Group) - Huntsville, AL

Huntsville AL MLS

Manhattan is losing values? First I've heard about that. All that I read said you all were immune. 1.6% per month? That could sting after a few months. Ouch! Well poo...hate to see the housing crisis hitting all of us now. Hang in there and this is a post full of wonderful advice. I think you'll make it through just fine:)

Jan 14, 2009 11:16 AM

Bob & Carolin Benjamin

Benjamin Realty LLC - Gold Canyon, AZ

East Phoenix Arizona Homes

Interesting - thought Manhattan was pretty insulated to what was happening to the rest of the country and real estate.

Jan 14, 2009 11:23 AM

Patricia Kennedy

RLAH@properties - Washington, DC

Home in the Capital

Mitchell, that old pendulum does swing, doesn't it? Congrats on the gold star!

Jan 14, 2009 11:45 AM

Jeff Dowler, CRS

eXp Realty of California, Inc. - Carlsbad, CA

The Southern California Relocation Dude

Mitchell - I have always been impressed, if that is the right word, at what goes on in the RE market there in Manhattan, adn the prices that some condos and co-ops are commanding. How much have the avergae prices shifted? And the volume of sales?

Jeff

Jan 14, 2009 11:48 AM

Amy Gooden

Allen Tate - Charlotte, NC

I can't even imagine working in a market like Manhatten. There is a lot of competition just in our uptown Charlotte market with a number of condos on the market in each building. I can't even imagine all of the selection that buyers have there. I guess you guys learn building like we learn neighborhoods.

Jan 14, 2009 11:51 AM

Damon Botticelli

Vegas Real Estate Photography - Las Vegas, NV

Real Estate Photographer

I was very surprised to learn a few years ago that Manhattan real estate seemed to be very controlled by a few major listing brokerages and how the MLS and buyer's agents seemed to operate very differently than they do here in Nevada. Does the MLS and showing agents have more of a role now compared to 2-3 years ago?

Jan 14, 2009 12:39 PM

Mitchell J Hall

Manhattan, NY

Lic Associate RE Broker - Manhattan & Brooklyn

Elizabeth, Thanks for stopping by. Appraisers vary but at least -1% per month. Prices were so high and everything was selling now is more a normal market.

Bob and Carolyn, 25% of our economy is financial services even though it is only 5% of the work force. This time of year we've been used to a lot of bonus money from Wall Street going into real estate.

Pat, The pendulum always swings in real estate and politics. Did you get innaugural tickets?

Jeff, Prices were very high. Different brokerage reports vary, but IMHO about 15-20% since a year ago. Sales are less and taking longer inventory is up as is the absorption rate.

Amy, It's dog-eat-dog lol. We are neighborhood and building specialists. Buyers usually focus on a neighborhood.

Damon, We operate very different here but it has improved dramatically over the last several years.

Jan 14, 2009 01:19 PM

Laura Cerrano

Feng Shui Manhattan Long Island - Locust Valley, NY

Certified Feng Shui Expert, Speaker & Researcher

Mitchell, Funny that I too never thought the prices would drop in Manhattan and I doubt it will be for long. It's a great time for buyers who love the City to finally get some good prices and incentives.

Jan 14, 2009 01:41 PM

Lise Howe

Keller Williams Capital Properties - Washington, DC

Assoc. Broker in DC, MD, VA and attorney in DC

So glad that reality is finally starting to raise its head in NYC - my 30 year old son is going to start looking for a condo next year in Manhattan. Finally he will have a chance to buy something.

Jan 14, 2009 02:02 PM

Dean Moss

Dean's Team - Keller Williams Realty Partners Chicago IL - Chicago, IL

Dean's Team Chicago IL Real Estate Team

Mitchell -

When prices on NYC co-ops, condos, and apartments fall, the whole market is indeed reeling!

Interesting to learn that sub-agency still exists in NY. It has been gone in IL since 1994. Also amazing to learn that appraisers are discounting by a set amount based on incremental market time. Whoa!

Anything you need in Chicago - you might have heard of our little town - let me know! We'll through in a thick-crust, no-fold-over pizza with every referral received!

Stay Warm!

DEAN & DEAN'S TEAM CHICAGO

Jan 14, 2009 02:18 PM

Cindy Hartpence

Edisto Real Estate Company - Edisto Beach, SC

Great to read your information.Grew up in North Jersey (Leonia) and love visiting Manhattan. Hope all goes well with you! Will keep you in mind for sure!

Have a great day!

Cindy

Jan 14, 2009 02:43 PM

Isaac Bensussen

Pacific Coast Real Estate Group - La Jolla, CA

Mitchell:

You are really an Internet Marketing Specialist. I never saw so much information for Buyers and Sellers in one site. It must have taken you a decade to put your site together. What would you say was the decisive factor for the Real Estate market in New York to change from a Seller's market to a Buyer's market?

Isaac Bensussen- Best Homes in La Jolla

Jan 14, 2009 03:18 PM

Margaret Mitchell

Coldwell Banker Yorke Realty - York, ME

Seacoast Maine & NH Real Estate

Hi Mitchell - I'm a former Manhattan resident of many years, now back to my native New England. I'm always interested in Manhattan real estate and enjoyed the post.

Jan 14, 2009 11:06 PM

J. Philip Faranda

Howard Hanna Rand Realty - Yorktown Heights, NY

Associate Broker / Office Manager

Mitch-

Excellent post. I'm just north of you and am very aware of how hard the Wall St crisis has affected Manhattan.

Just one question- you are recommending that people work with a REALTOR, but isn't REBNY the big fish there? NAR affiliates have a small slice of the market unless there is something new in the past 90 days I haven't heard/read.

Jan 14, 2009 11:23 PM

Mitchell J Hall

Manhattan, NY

Lic Associate RE Broker - Manhattan & Brooklyn

Carole, It is a great opportunity for buyers. Anyone who bought real estate back in 91-93 and held did very well.

Lise, Hopefully your son will find a nice condo. He might want to consider a coop they are about 15% less than condos.

Dean, In 1-4 family houses a signed agency disclosure is required. For coops and condos nothing in writing is required. In absence of a written disclosure the state considers the agent sub-agent. Two different apraisers mentioned the discounting by incremental market time. It wasn't too long ago when they went the otherway. BTW: I love Chicago.

Cindy, Thanks. Everything always works out. We made it through 9/11

Isaac, Thank you. I started my first website in 2002 so about 7 years. I started blogging 3 years ago. I would say the market turned when the economy turned, we didn't have a sub-prime problem because most of our housing is coops with strict financial requirements but when Bear Sterns and Lehman went down the market turned.

Margaret, Thank you, I've lived in Manhattan for more than 25 years. Real estate has never been cheap here except for the lucky ones in rent regulated apartments. We go through cycles but always make a come back.

Philp, REBNY is still the dominant real estate board. I am a member, but in a tough market every little bit helps. Only REALTORs can list properties on the #1 most visited real estate website REALTOR.com. A REALTOR can add value, just like a broker can add value over a salesperson.

Jan 15, 2009 01:30 AM

Casey Joiner

Scenic Sotheby's International Realty www.caseyjoiner.com - Destin, FL

Scenic Sotheby's International Realty

Thanks for this. NY is usually excluded from the common rules of real estate cycles. Sounds like you have the heartbeat there and will make it through yet another cycle.

Thanks again

Jan 15, 2009 05:42 AM

Rob Oryl

Valuation Nation - Haddonfield, NJ

Thanks for the informative insight on daily operations in NY apartments

Jan 21, 2009 06:43 AM