Viviane, Home Buyer in New York, NY

Realistically, how low can you go down in price for a condo listing price of $480K?

Asked by Viviane, New York, NY Sun Mar 7, 2010

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Realistically how much is the condo really worth?

The condo could really be worth $325k and priced at $480k.
It could be worth $600k and offered at $480k to get a bidding war started.

You have got to figure out the real value and then offer some below that amount.
1 vote Thank Flag Link Sun Mar 7, 2010
Dear Viviane:

I had previously answered a similar question on Trulia, this was my answer:

Everything in life is negotiable. Submit an offer in writing to the developer along with a pre-qualification letter from a good bank if you are getting a mortgage. If you do not offer the full price you may lose the property. If your not worried about losing the property, do whatever you feel is best. Beauty is in the eyes of the beholder and you have to offer what you feel it is worth for YOU.

I have learned through experience that when a buyer looks at a property and thinks it is a good deal, it is fairly certain that many other buyers who view the property will feel the same way. This happens especially when the property is priced right, then everyone thinks it's a great deal and the seller will get many offers.

If you are making an offer simply because you like the place but not because you perceive it to be a great deal, then by all means try to negotiate and see what happens. If you are making an offer because you perceive the property to be a great deal then you may want to offer the full price.

Also bear in mind that with new construction the developer usually will require you to pay his (or her) closing costs.This can be 2-3% of the purchase price on top of the other traditional closing costs you will incur as a buyer (typically 5% of your mortgage amount). Sometimes you can negotiate with the developer so as to not pay those additional closing costs. You should speak to your attorney about that.

Also, many times if a developer is not willing to give any concession on the price, they may be willing to give you upgrades or add-ons to the kitchens, bathrooms and/or appliances.

So as far as how much you can or should negotiate, only you can answer that questions as it depends on how badly you want the condo! ;)

Sincerely,
Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665
Email: MitchellSFeldman@aol.com
0 votes Thank Flag Link Mon Mar 8, 2010
Viviane, work with a great agent who can provide the pricing analysis to answer your question. Here are the facts: if this condo is priced properly, it may be a great value at its asking price or within a 1-5% margin of it. Thinking about pricing on a % off of asking is not the way to go about it. Too many buyers miss good opportunites this way. A good analysis will immediately flush out overpricing and guide your evaluation, bidding and negotiation by providing the appropriate market range. But is will also - and perhaps more importantly, identify those homes that are priced properly. Attractive homes that are priced right will move quickly and at or very close to asking - and the buyers of those homes have snatched up a terrfic value. They recognize it because they have an agent that has armed them with the facts of the market, and the buyer is smart enough to listen to that agent.

In my market in NJ, homes generally sell between list and 5% off of asking, when that list price reaches the proper "strike price". The smart agents and sellers price homes properly right out of the gate and capitalize on the greatest excitement for the home which comes in the first 60 days. Those sellers generally do better than those that overprice and tough it out over time and numerous price reductions. And the buyers of those homes are the informed consumers that are seizing the best opportunities.

Good luck,
Jeanne Feenick
Unwavering Commitment to Service
Read my Blog: http://www.trulia.com/blog/jeanne_feenick_-_new_jersey/
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Mon Mar 8, 2010
Viviane,
You can put in as low an offer as you want, but you should put in an offer as low as the market will let you.
How much have similar condos in the area gone for? It's really not the seller or the listing agent that comes up with the prices of property, but the market, so do your research and know what the condo you are interested in is worth before you put in your bid. If I can be of any further assistance, let me know. Good luck!
0 votes Thank Flag Link Mon Mar 8, 2010
I think this question has been answered very well; however I will contribute my two cents worth:

You can go as low as you desire on an offer; however there are thousands of reasons why an individual seller may or may not accept any offer on a given property. Two things to consider before making an offer are: what are similar units selling for? and what is this particular seller willing to accept?
0 votes Thank Flag Link Mon Mar 8, 2010
There is no magic formula or buying real estate. First look at the unit and compare it to the market we are in.
Things like location, condition, size, are the values you should consider. Check out Brooklyn Real Estate Blog below for more information on buying Condos
0 votes Thank Flag Link Mon Mar 8, 2010
Great answer from Dan.

Ignore the list price. Determine what the condo is actually worth--what its fair market value is. Then pay no more than that. Offer less.

Hope that helps.
0 votes Thank Flag Link Mon Mar 8, 2010
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
Viviane: Are you working with a buyer's agent or did you go to the listing agent to show you the property? If you contacted the listing agent (many buyers do this thinking they can get the "inside track" on a property), then I would recommend speaking with a buyer's agent. A buyer's agent would be representing you and not the seller and should be able to do an analysis of what the unit is worth, try to determine the owner's motivation for selling, and come up with a good negotiating strategy to get the unit at the lowest possible price. Low balling offers are not always the best way to go because oftentimes the owner gets angry, won't really negotiate and then you end up negotiating against yourself. If I can be of any assistance to you or refer you to a buyer's agent, please feel free to contact me.

Ralph Windschuh
Certified Buyer Representative
Senior Real Estate Specialist
Associate Broker
Century 21 Princeton Properties
631-467-0009
rwindschuh@c21princetonproperties.com
0 votes Thank Flag Link Mon Mar 8, 2010
A good gauge of a starting offer for a condo is to determine how many units have been sold so far. Many condos require a minimum of 51% of the units to be sold in order to qualify for financing. Developers may be more flexible in accepting offers in order to get to this magic number.

Also when performing comps be sure to consider if parking is included or is sold separately. Many condos offer a parking spot for 25K and up. Be sure all comps consider this and other extras such as rooftop terrace or other extras sold separate from the condo unit. Ultimately you want to make sure you are performing an apple to apple comparison

Almost every Realtor would be happy to assist a prospective buyer in determining comps for similiar units and estimating the lowest acceptable offer price.

We would be happy to help you. Please call us at 917-593-4068

Best regards,
Bonnie Chernin and Dave Rogoff
Coldwell Banker Mid Plaza
917-593-4068 (CELL)
0 votes Thank Flag Link Sun Mar 7, 2010
Viviane
You can't necessarily use the list price as the absolute true value of the condo....so no one can tell you how much less (or more) you should offer.
You need to find out what similar condos have sold for. If you are working with an agent, they certainly can educate you as to the fair market value. Once you have that information , you will know what a realistic offer might be.
If you're not working with an agent, then it might be a good idea to find an agent who can help you , if not with this particular condo, then with others.Having that information is vital. This is a huge purchase..... you need to be informed.

Best wishes...........
0 votes Thank Flag Link Sun Mar 7, 2010
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