Are You A Distressed Seller?
A: My heart goes out to the sellers in today's market who made the mistake of 'testing the market' by pricing their property too high or who agreed to do business with the real estate broker who promised the highest purchase price in exchange for an exclusive listing agreement. It is something that should be a learning experience for any first-time seller as they live through their first slow housing market in NYC. If you are having trouble selling your apartment, here are a few tips to hlep out.
THE DAYS OF $1,200+ A SQUARE FOOT ARE GONE (UNLESS YOU ARE A NEW DEVELOPMENT OR A PENTHOUSE ON FIFTH AVENUE). IN TODAY'S MARKET LOCATION AND RENOVATIONS DO NOT GET WHAT THEY USED TO AS BUYERS LOOK TO GET THE MOST SIZE FOR THEIR DOLLARS!
TIPS TO HELP SELL YOUR APARTMENT
1. RE-EVALUATE PRICING: Ask your broker, or go to Streeteasy.com and do a FIND YOUR BUILDING lookup, for a list of properties currently on the market in your building. Then divide the asking price by the total square feet for each unit to get the PPSF (price per square foot) that each property is currently asking. Now, do it for yours. Where do you stand? Are you asking the highest PPSF in your building? In the middle?
Some features that would warrant your property being the highest PPSF property for sale in the building include: HIGH FLOOR, VIEWS, & RENOVATIONS.
UrbanDigs Says: Lower your PPSF so that you are the BEST VALUE currently for sale in your building! I know its tough and that your property is always worth more than somebody elses similar unit in the building, but GET OVER IT and DO WHAT YOU HAVE TO DO to sell it in todays market! Remember that brokers do not determine the value of your property, the MARKET DOES THAT! By being the best value in your building you can tell buyers that come to view your property to compare your apartment to others listed for sale in the building; explain to them that your apartment is currently asking the lowest PPSF!
2. TAKE 1 WEEK OFF ADVERTISING BEFORE PRICE REDUCTION: Another tough concept for distressed sellers to understand. Believe it or not listings that have been on the market for 12+ weeks GET STALE! The same pool of buyers see the same listing at the same price in the NY Times and simply ignore it!
After you spent some time re-evaluating your asking price, take a week off of advertising in the NY Times before marketing the new asking price. The goal here is to offer a fresh ad (change text in ad too) with a new asking price that hopefully will capture the attention of new and existing buyers that are looking every week in he NY Times for their home.
UrbanDigs Says: Add a 4-point phrase of "PRICE SLASHED" or "MUST SELL" to the print ad with OH banner & apartment features underneath. A 7-8 line ad in the NY Times shouldn't be an issue with your representative agent and should be large enough to catch most readers attention. In the end, the ad's goal is to bring activity to your OH. Think to yourself, what would catch your eye if you were browsing for a property similar to the one you are trying to sell?
3. REQUEST A EMAIL BLAST TO BROKERAGE COMMUNITY: This is the type of market that sellers must be proactive in, NOT passive! If you already signed a exclusive agreement to sell with a brokerage than you have accomplished a few very important marketing tactics: LISTING INCLUDED IN CENTRAL SYSTEMS, PRINT ADVERTISING, BUILDING MAILINGS, WEBSITE EXPOSURE, etc..
However, the main marketing tactic will always be LISTING INCLUDED IN CENTRAL BROKERAGE SYSTEMS since most NYC real estate transactions are Co-Broke's; meaning that another broker brought in the buyer and shared in the transaction with your representing broker. Now, just because your listing is included in the brokerage central systems doesn't mean that your listing is being seen by brokers who are currently representing buyers that would be perfect for property! We need to bring your listing to the eyes of the brokerage community!
UrbanDigs Says: Ask your broker to do a email blast to the entire brokerage community that will include your property description, pictures, floorplan, and next open house date! Two popular companies that have been exploiting this new marketing tactic are Gotham Photo Company and On-Line Residential. OLR is a brokerage based system so if you are a For Sale By Owner than go with Gotham Photo Company to send an email blast!
4. ENCOURAGE BUYERS TO SUBMIT OFFERS: Its such an easy concept yet one that most sellers are afraid to do for fear of appearing too desparate. Forget that notion altogether and make sure you tell every buyer that comes in that your asking price is negotiable and that you encourage them to submit any offers within reason.
UrbanDigs Says: Buyers have control right now and they know it! By showing a property and having the attitude that you are ONLY accepting full ask offers is simply the wrong way to go. Instead, let buyers know that you know that they have control by telling them that your asking price is negotiable. So how do you do this?
When a buyer first enters your property you welcome them and encourage them to sign in and take a showsheet. Then you tell them to 'feel free to browse and let me know if you have any questions'; no buyer likes to be followed around by an owner/broker and hounded with seller babble! Assuming they stay for 5 minutes or more, you gently approach them and ask them if they know about the building details, "...by the way, are you familiar with this building and the amenities that are offered"? Chances are they will say 'No' which leaves the door open for you to take control. Describe the building amenities and financials (if you know them) and then pull a 360 and go into the best features of the apartment "...have you seen the renovated kitchen, incredible sunlight, or huge walk-in closets". After you stress the strongpoints of the building and the apartment tell the visiting buyer, "...just so you know the asking price is negotiable and that the seller advised me to encourage and review all bids submitted".
**Important Note** LOWERING YOUR ASKING PRICE WILL ALWAYS HAVE THE GREATEST EFFECT FOR SELLERS. THE OTHER TIPS I WROTE ABOUT SHOULD BE LOOKED AT AS COMPLIMENTARY TO A PRICE REDUCTION AS DONE ALONE WILL PROBABLY NOT SPUR ENOUGH INTEREST TO SELL YOUR PROPERTY FAST! SELLERS MUST UNDERSTAND THAT THIS IS A DIFFERENT MARKET THAN A YEAR AGO AND THAT LENDING RATES ARE MUCH HIGHER THAN THEY WERE AT THIS TIME LAST YEAR. AS MONEY GETS MORE EXPENSIVE TO BORROW, BUYING BECOMES LESS AFFORDABLE!
