What should my net offer be?

Asked by Nycbaby, Washington, DC Fri Jun 29, 2012

I'm thinking of buying a condo in NYC for $2,795,000.
That is the listing/advertised price for the condo.

However, I dont want to pay that. The most I can afford is $2,750,000 gross. Meaning paying the net amount to the seller and taxes, fees, etc., the most I can come up with or rather I'm willing to payout is $2,750,000 in total, not a dime more.

However, I don't know how much to offer as the net amount on the place to arrive at $2,750,000 gross?

This will be a all cash transaction.

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7
Michael Druc…, Agent, New York, NY
Fri Jan 4, 2013
First, an all cash transaction gives you negotiating power. However, it is imperative you have a real estate broker who is seasoned and understandes the nuances of negotiation represent you.
0 votes
Ella Chavers, Agent, New York, NY
Mon Jul 2, 2012
You need to work with a Real Estate sales agent who has your best interest in mind and who will watch your back. There is a lot more than the price to look at before you make an offer. Good luck!

If you would like to work with me my contact info. is echavers@elliman.com.
0 votes
Elena Ravich,…, Agent, New York City, NY
Fri Jun 29, 2012
You have to be familiar with NY closing costs and its various components to buy here. Amount of offer means just how much you will pay to the seller for this property, which includes broker fees and may also include some of your closing costs if you negotiated that but is does not mean by default that it is a NET amount you will end up paying. All closing expenses are separate and can be negotiated to some extend, which greatly depends on the market condition. In Manhattan market conditions changed in April 2012, which was a turning point for negotiating concessions from the sellers. Please remember about a mansion tax on over 1MM properties, mortgage recording tax if you have a mortgage, title insurance, your attorney fees, recording fees, etc. I have a sheet with a list of all closing costs for Manhattan condo and would be glad to share it. By not being represented by local professional you are not saving anything (commission would be the same if there are 2 brokers or 1) and may end up paying a higher price because you do not have access to closed sales and current listings in the building and in the area....Be very diligent and do your homework! good luck!

Elena Ravich
Rakita Realty
646 593 7207
0 votes
Anna M Brocco, Agent, Williston Park, NY
Fri Jun 29, 2012
If you are not working with an agent of your own, consider the idea; in order to determine a fair offer review comps, recently sold similar properties in the immediate area, see what the data suggests and go from there. Keep in mind that if a property is priced on target, or slightly below, multiple offers may occur.
0 votes
Joseph Hasti…, Agent, Bayside, NY
Fri Jun 29, 2012
Hi NYC. You'll need to adjust your numbers a bit. In Manhattan we have a Mansion tax which is equal to 1% of the final selling price. Based on your net figure, that would be $27,500. Let's also consider closing costs which may be minor but you'll need an Attorney and there is most likely an application fee. If this is new construction, the developer may throw other fees at you.

Seems like you can use the help of a Broker but you seem to want to do this yourself. Good luck moving forward.
0 votes
Thomas Brady, Agent, Plainview, NY
Fri Jun 29, 2012
Get a buyer's agent. The scenario you are describing is exactly what they should be able to help you with; they work for you, but the seller should pay them through the commission offered. Because they are working for you and not the seller you can confide in them, their loyalty and fidutiary responsibilty is to you. Good luck!
Tom Brady SFR, e-Pro, SRES, GREEN
Licensed Real Estate Salesperson
Notary Public, Ret. NYPD Lt.
631-682-8660
Tom@BradyFamilyRealty.com
http://www.BradyFamilyRealty.com
"We treat you like family!"
Charles Rutenberg Realty, Inc.
255 Executive Plaza - Suite 104
Plainview, New York 11803
0 votes
Ron Thomas, Agent, Fresno, CA
Fri Jun 29, 2012
I'm going to look into my Crystal Ball, (which is the same thing the Seller did to arrive at his Listing Price, and guess that you can get it for $2,650,000) Let us know what happens. In the meantime, read about your LISTING PRICE:

Understand that the LISTING PRICE has one primary objective, to attract attention: It is not intended to be set in stone, and in many cases it is not even a good guideline toward the SELLING PRICE.

Some Sellers believe that by setting the LISTING PRICE high, they can always come down, and people will make an offer anyway: WRONG! Buyers will just bypass the property and look at houses that are within their price range. And six months from now, the Seller will slowly start lowering the PRICE, (this is called “chasing the curve”) and Buyers will be asking the question; “What’s wrong with that house?” and “Why has it been on the Market so long?”

Other Sellers set the LISTING PRICE low, to attract multiple offers. (The correct strategy.) We are asked; “Aren’t you obligated to sell at this price if someone offers it?” The answer is probably not; for that to happen, you would first have to have only one offer, and secondly, the offer would have be exactly the same, down to the smallest detail, (please discuss this with your Realtor).
Another thought; Buyer will search for potential properties by groups; for example, $400,000 to $450,000, and $250,000 to $300,000. If your house is priced at $460,000 or $310,000, the Buyers will never see it. (something else to discuss with your Agent.)

Different Banks have different philosophies about pricing their properties: You cannot draw any conclusions without a good analysis.

Have your Realtor do a CMA, (Comparative Market Analysis) to help you determine your Offering Price. It is the surest way to determine the Market Value of the property.
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