True Gotham

I'm two-faced!  That's right, I said it.  But now let me explain. 

In today's very bizarre world of Manhattan real estate where everyone is trying to make sense of the market's conditions and direction, I am finding myself sending mixed messages depending on whom I'm representing in a transaction.  

For my sellers, I am careful to price their homes fairly for today's marketplace and I arm myself with the comps and the documentation to support those asking prices.  So when a colleague or prospective bidder submits a bid of 30-50% below the asking price (yes as much as 50% below ask) with a grocery list of reasons why they think their bid is "solid," I'm finding it both aggravating and frustrating.  That said, current market conditions often require that these bids are considered for counter offers.  The irony here is that I am also at times that irritating low bidding agent.

For my buyers, I provide in depth analysis of current market conditions including comps, perception of market health and direction, as well as consideration of a buyer's level of qualification to purchase.  In some cases, this analysis results in me submitting bids as much as 30% below asking prices on behalf of my buyers.  

So navigating today's Manhattan real estate market is indeed challenging.  The role of the real estate agent has become even more important as both a defender of price and/or offers and an interpreter of a home's value based on current market conditions.  So although it appears that I may be sending mixed messages, the single message is very clear: each specific property negotiation requires independent analysis. 

Amazing how much the world has changed since your 9/2/08 post... and I quote:

"And a message to buyers: it's highly unlikely that you are going to "steal" a home from someone in today's Manhattan real estate market. Offers of 25-30% below ask, particularly when a home is fairly priced, are generally a waste of everyone's time."

Indeed anon. On 9/2/2008 those offers were a waste of time. Today they are offen considered for counter offers.

I just had dinner with a friend who is a partner at a major law firm. He sold his old apartment (2 bedroom) not quite at the top but fairly close about a year ago and has been renting since. He had been waiting until a child was accepted in private school before deciding on a neighborhood to buy in (3 bedroom).

He has now been looking for several months for a loft in prime Tribeca. I suggested he wait longer as prices are flattish at best and seem to be declining. But he reminded me that addressing life issues are sometimes mroe important than timing the market and he is buying with a 20+ year time horizon. So, I guess there are buyers out there. He reported that all of his bids were at 18-20% below ask and that he had not received a single counteroffer. I asked if any of said properties had gone into contract and he told me no, although some were pulled from the market. This may be reflective of the primeness of Tribeca and/or large apartments, but I found it interesting. He thought he would at least get some counters. I told him to give it a few months. We shall see.

Colgin,

Just curious to know if your friend is bidding with "ammunition" or if he is simply going in with low offers hoping to find a desperate seller on the other end?

Colgin,

So your friend cares more about the life-choice situation and cares much more about the property and location then about the price and market-timing.... but he is still lowballing the offers? Sounds like he has fooled himself about the sincerity of one of those sides of the equation.

Douglas, give the market a little more time~~~with the way the economy is going, the sellers might look back fondly at 30%-below-asking offers as generous. The world-wide outlook is bleak and Manhattan will no longer be able to rely on foreign buyers to take up the slack left behind by domestic purchasers.

I hear you Clarissa and don't disagree. That is the challenge in a declining market: determining a "fair" selling price. No one actually knows what things are selling for RIGHT NOW but I do know that asking prices have been adjusted downward and I have personal experiences representing both sellers and buyers who are meeting at 20% below already downward adjusted asking prices.