Lets make a Deal - Negotiating in the current Manhattan market

By
Real Estate Agent with Compass

In Sunday April 20, 2006 New York Times Real Estate section the feature story By Vivian S. Toy is titled

                    Lets Make A Deal.  http://www.nytimes.com/pages/realestate/index.html

It has a picture of an apartment with a divider down the middle called asking price and a buyer and seller are playing tug -of-war across the asking price.

My broker JoAnne Kennedy, cheif operating officer of Coldwell Banker Hunt Kennedy http://www.cbhk.com/ Is quoted:

"We're certainly not where we were in the irrational, exuberance days, sellers have become more realistic. and buyers are finding they have more time to select, and they can make an offer that's not asking price, and it will be considered."

JoAnne  goes on to say that sellers are often happy to get any bid, but a buyer who submits a very low offer and then engages a seller in several rounds of counteroffers risks losing the apartment. "That buyer may feel very clever going back and forth in a Ping-Pong negotiation, she said. "But the seller gets annoyed, and since the listing agent is obligated to keep showing the apartment until a contract is signed, that great negotiation will go up in smoke as soon as another buyer comes in."

Dawn Tsien, the president for new developments at CBHK http://www.cbhk.com/ is also quoted in the article. In a new apartment building, developers are increasingly willing to pay transfer taxes said Dawn. "On a $1 million apartment, city and state transfer taxes, plus the state mansion tax (which applies to all units $1 million and higher), come to about $28,000 and would traditionally be paid by the buyers. "A developer might pay one or all of the transfer taxes, depending on the stage of the sale and the momentum at the moment" Dawn said.

Jonathan Miller of Miller Samuel apprisers http://www.millersamuel.com/ makes sense with the numbers. He said "If negotiability can be measured as the difference between the listing price and the selling price, it was 3.5% in Manhattan during the second quarter of 2006. He said that is higher than the average of 1% at the height of the market in 2004, "but anything under 5% still means not much is happening. He also said it is a far cry from the 15 to 20 percent discounts off list prices that was the norm during the early 90's. meaning it is not yet a market in which buyers can ask for and get huge concessions. He goes on to say "But because so many sellers in this changing Manhattan market have overpriced their apartments, negotiability can be expected to continue to rise until listing prices fall in line with current market conditions."

I wonder if Jonathan Miller From Miller Samuels uses the last listing price to measure the difference in listing and sale price. I suspect the difference between the original list price before price reductions and sales price might be more than 3.5%.

 

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Mitchell J Hall

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