This week, we go behind the negotiations for a small Upper East Side one-bedroom co-op listed for $300,000 by Shari Cohen of Citi Habitats.
THE DETAILS
The apartment, at 188 East 75th Street between Third and Lexington Avenues, was less than 400 square feet. Cohen had actually sold the unit two and a half years ago. Now those same owners (parents who had bought the apartment for their child) were looking to sell it with Cohen. It was a direct sale, so Cohen represented both the owners and the buyers.
Pros: The location is centrally located and the apartment was recently renovated.
Cons: The apartment is very small, and at $818 a month, the maintenance was high. Plus, it's on the ground floor.
DATES
On the market: March 8, 2011
Contract signed: June 14
Closing date: August 17
HOW THE DEAL WENT DOWN
Cohen recommended that the apartment be listed below $300,000 because of its small size, but the sellers were anxious to recoup some of the money they spent (they bought the apartment for $307,000 just two and a half years ago) and listed the apartment at $300,000.
The apartment, at 188 East 75th Street between Third and Lexington Avenues, was less than 400 square feet. Cohen had actually sold the unit two and a half years ago. Now those same owners (parents who had bought the apartment for their child) were looking to sell it with Cohen. It was a direct sale, so Cohen represented both the owners and the buyers.
Pros: The location is centrally located and the apartment was recently renovated.
Cons: The apartment is very small, and at $818 a month, the maintenance was high. Plus, it's on the ground floor.
DATES
On the market: March 8, 2011
Contract signed: June 14
Closing date: August 17
HOW THE DEAL WENT DOWN
Cohen recommended that the apartment be listed below $300,000 because of its small size, but the sellers were anxious to recoup some of the money they spent (they bought the apartment for $307,000 just two and a half years ago) and listed the apartment at $300,000.
Three weeks later, with no bites, the sellers brought the price down to $285,000. Recognizing that the maintenance was high, the sellers agreed to pay the recent monthly maintenance increase ($38.94) for a year, bringing the monthly maintenance down slightly to $779.06 per month for the buyer for the the first year.
Cohen showed the apartment a lot, but many people were turned off by its size.
The first offer came in on April 21st, about three weeks after the price was lowered. It was a cash offer at $200,000.
“Most brokers would say, 'No way, tell them I’m countering at $284,000 and not a penny less,'” said Cohen. “But I said let’s make a serious counter, and if they come back to us with a ridiculously low offer, then we’ll forget them.” The next day, Cohen and the sellers countered at $265,000.
A couple of days later, the buyers came back with an offer of $210,000 cash. The next day, the sellers countered again, this time with $255,000. Two weeks later, the sellers lowered their asking price further to $225,000.
A couple of days later, the buyers came back with an offer of $210,000 cash. The next day, the sellers countered again, this time with $255,000. Two weeks later, the sellers lowered their asking price further to $225,000.
The next day the buyers said their absolute limit was $220,000 in cash. Two days later, the sellers countered with $225,500, and said they’d no longer pay the maintenance increase for the first year.
The buyers accepted. They were buying it for their son, and the only other small studio that they liked like that had a co-op board that wouldn’t allow parents to buy apartments for their kids.
MORAL OF THE STORY
While a 25 percent price cut was undoubtedly difficult on the sellers, the $225,500 cash offer was the best they could get in this particular economy.
MORAL OF THE STORY
While a 25 percent price cut was undoubtedly difficult on the sellers, the $225,500 cash offer was the best they could get in this particular economy.
Cohen said many sellers and brokers would have thrown out the original lowball offer, which was $100,000 less than the original asking price. Instead, she and the sellers decided to counter with something more reasonable and eventually arrived at a price they could accept.
Sellers who want to know whether a lowball buyer is serious should pay close attention to the second offer; if it's significantly higher, you may eventually have a deal. Similarly, lowballing buyers should be prepared with a second offer high enough above the first to show that they're serious.
The Haggle explores the anatomy of a recently closed New York City apartment sale in which the closing price was less than asking price...so that when the time comes to buy or sell, you’ll have a better idea of what to expect.
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