Before you make any AGGRESSIVE offers as someone suggested, you would have to take several things into consideration.
First you would need to know how long ago this property has been listed.
Second you would need to know or try to find out why the seller is selling. Not everyone is desperate for money and not every sale is a fire sale.
Third you would need to know how well the property is priced. Not everything is overpriced on the market, some of the properties are priced just right. Last month alone in my firm 10% of the sales which were made sold at asking or above asking.
This being a sponsor sale, I think you hit the jack pot. There are usually no board interviews for sponsor sales. Many sponsors are trying to unload the inventory and move on, which gives you more o fa bragaining power.
There are dozens of cooky cutter apartments sitting on the marke right now and not moving. And only a handful of unique homes that wont sit around for too long.
You were fortunate enough to find this unique home and not spend months of headaches and frustration like many other buyers go through trying to find the perfect home.
If the second buyer is serious about this apartment, it wont last much longer.
It's ultimately up to you, if you can let go (emotionally) and not bite your elbows next year trying to find another "PERFECT" place, wait it out. People buy because they love something and there isn't such a thing as the right time. The right time in my opinion is when you find something you love, you think it's priced well and you will enjoy it for years to come. Interest rates are at their lowest, prices are low, a good indication of good timing for you.
Why is the maintenance high in the building? Is it a full service building full of amenities? Have you checked if there is an assessment and thats why the maintenance is higher then what you would expect?
I have no idea which address you are talking about, that would give me a better idea as to what type of action the building has seen.
You don't buy this apartment and hold off to lets say 2nd quarter. Prices may or may not have dropped, depends on the neighborhood and building. If it isn't a sponsor sale and you are buying into a coop, expect an interview. Let's also assume the seller says YES to a low price, you finally wait for the board the call you in, they ask you questions, look at the price and a week or two pass by you get a NO for an answer.
Why you may ask? I am qualified, I got liquid cash, great job. Some buildings and boards can say no to a low price even if the seller says yes.
That's a very realistic scenario.
Ellie I wish you best of luck making up your mind. If there is any other information which you may need, don't hesitate to ask.
My information is in my profile, I'm free to talk to :) and would love to help.
I'm an experienced, licensed agent (featured in the New York Times) with some other options that could work well for you if you're having 2nd thoughts.
Please contact me by phone so I can answer your questions & send you the property we have that works best for you.
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Cheng, you can't really collect good rent from a co-op. Oftentimes renting is allowed on a short term basis only, , or charged a renter's 'premium' which is simply the co-op mafiosing themselves in on your action, or banned outright. All of those three create limited investment return possiblitities.
Helen has $5 million cash, where can she put? forget about wall st, no stocks! no CDO's! no banks! (who is going to put $5 million in banks? largest banks like Citibank? rediculous!
I think financial crisis has hit NYC already, otherwise, you do not see 2 IT professionals sharing to rent 1br condo paying $1,400 ... but if you are like the people above paying cash to buy the 1br condo at $203,000, that is pretty good income.
The only mistake you could make if you have $5 million cash and went out to buy $10 million dollar house that was to be escaped by Wall St CEO's, COO's, CFO's ...etc. The property tax could eat out your saving!
A report shows that new home construction jump 22% in Greater New York City area, I guess, due to recent collapse on mortgage rate http://www.bankrate.com/brm/graphs/graph_trend.asp?tf=180&am
Tell me when gas price dropped down to $1.34 http://www.kcgasprices.com/ what else can be invest other than real estate? At least you can collect some good rent, right?
Just wanted to clarify...
Antolin also made some really great points, except I never said " YES, BUY IT!" As a matter of fact I recommended you did not pay all cash and that you explore all your options with the help of a professional.
You really should consider the monetary cost of this apartment. I will just assume a few basic things, maybe I am totally wrong, but maybe I am pretty close. I assume that you have found a 500 sq ft studio for probably around 200,000. Not a bad deal at $400/sq foot, especially if you are going to live in it. But since this will be a pied a tierre, you will not get the full benefit of living in it, and will have to pay maintenance instead.
At 500 sq ft and 1.6 sq/ft maintenance, you will be PAYING $825/month to NOT live there full time. In addition, you will lose the investment returns of your 200,000, lets assume it is in a 3% bank account, which generates 6000/yr or 500/mo. Ok, there are tax implications, perhaps you would only get $375/month after taxes from your account, and perhaps although I doubt it, you would be able to deduct the taxable portion of the maintenance, the pittance that it would be, but that still means that you will be PAYING $1200/mo to NOT live there.
The quick and simple answer? If you come to NYC and spend more than 1200/month on hotel rooms EVERY MONTH EVERY YEAR go ahead and buy that place. If you do not spend 1200/mo here in the Big Apple EVERY MONTH EVERY YEAR on hotel rooms, then forego it altogether. You can, of course, "clump it", and see if you spend more than 14,400/yr on hotel rooms here in NYC, that would also be another way to compare it. But still, since you would only be using it as a pied a tierre, you have to ask yourself is it worth it.
One last thing: you might be considering renting it out. If you do that, you still have to pass the financial 1200/month hurdle- that is can this 500 sq ft place be rented out for 1200/mo, as well as the co-op board hurdle; they might deny it, or want a piece of the action. But most importantly, you said that you wanted it as a pied a tierre, and you won't be doing to much 'pied-a-tierring' if you have it rented out.
So here is the formula:
1) Calculate the maintenance cost.
2) Add to that the interest lost, after taxes, on the cash purchase price.
3) Do you spend that much in NYC on hotels each month. If equal to or greater, buy it. If not, keep hotelling.
Morgan expressed some very good points! In addition you might consider working with a buyer broker as they will do some comparables and also help you make that lower priced offer..It's always better to have an intermediary make an offer, because in a negotiation it's very important to keep your cards close to your chest! In NY the selling agent 's loyalty is only to the seller.
(*Correction: In my previous post I left out:" if it's a Sponsor unit, " you most probably have to pay a NYS transfer tax)
Prudential Douglas Elliman
Congratulations on finding something that you truly love! If you have second thoughts or don't need the place perhaps paying all cash isn't the way to go. I hope you are working with a buyer broker as you most probably also have to pay a transfer tax and you may not have been told about this. In addition a coop will probably be hard to get permission to rent should you want to do that for part of the year because of the high maintenance. How do you know that it really has another interested buyer? Please let us know..