Changing Indentities When You Buy
A: Picture this. You are a buyer whose been looking for the past 6+ months. You know a good buying oppurtunity is on its way but you play your game like your in no rush to buy. You go to open houses, learn your product knowledge, and get a general understanding of what your price point will ultimately get you. But do you put yourself in the seller shoes and try to anaylze what features of the apartment might be used as selling points when you ultimately resell?
Spin that anyway you like.
To understand the psychology of your foe, is to understand how to beat themWhen it come to buying real estate one of the most invaluable practices you can perform is to put yourself in the sellers shoes and ask yourself what is it about this apartment that I can use as the selling points to prosepective buyers when I go and resell
Is it the views? The sunlight? The renovations? Or the outdoor space? If you plan on asking for top dollar when you resell a property, than you must change identities when you are in the process of buying a new property to ensure that you get for a discount what you know will demand a premium in better times. Let me repeat that. "you must change identities when you are in the process of buying a new property to ensure that you get for a discount what you know will demand a premium in better times"
Look to negotiate on properties that offer great views and sunlight in down markets so that when you ultimately resell you will have 2/3 features (location being the assumed odd man out) covered to get you the most money.
But how do you do this? Well for starters, ask your broker to only show you apartments that are higher than the 15th floor. Chances are a 22nd floor apartment is going to offer some type of view and sunlight. Now you just need to fine tune that view and get one of the park or river. Another way, ask your broker for terrace apartments and see for yourself what kind of price difference outdoor space is getting in a slowing housing market. Remember the goal here is to buy in a buyers market and get those features that will ultimately get you top dollar when sold in a sellers market!
Don't worry about the noise if your on a corner; you can always citi-proof your windows. Sure its a costly renovation but if you went into an apartment with great views and sunlight but was insanely noisy from cabs, buses, and ambulances what would you think? Now picture that property 95% quieter but with the same great views and sunlight?
You must change personas when you look to buy. If you are adament about getting a fully renovated apartment, then for a moment step back and ponder whether buying a wreck will ultimately save you $50,000+? Calculate in monthly carrying costs while work is done along with the project estimate to see if paying for renovations are worthwhile.
The next time you step into an apartment, act as if you are the seller's broker. What does this apartment TRULY OFFER to prospective buyers that show up? If it offers great views, sunlight, and location then chances are it will wind up being a good investment.
Take a look at these terrace apartments and see how they compare with other listings in the neighborhood:
Price: $699,000
Reduced From: $869,000 to $699,000 (Motivated!)
Size: 800 SFT
maintenance: $1,498 (High Monthlys Restricts Affordability)
PPSF: $874 (not including terrace)
Marketed By: Lori Carlis of CBHK
Price: $749,000
Reduced From: $769,000 to $749,000
Size: 750 SFT
maintenance: $1,049 (reasonable given size + terrace)
PPSF: $999 (more reasonable monthlys explains higher asking price)
Marketed By: Joanna Lee of Halstead
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Comments (1)
This is an interesting article and these are thoughts worth keeping in mind. I'm a more laid-back owner and can deal with walk ups and things of that nature. You have to know yourself and picture yourself as more of a fussy type -- say, some 20-something brat who wants the whole world.
The article does assume a level of flexibility that might be unrealistic, though. Not everyone can choose to only look at 15th floor+ apartments -- and if you do, that pretty much keeps you in the postwar realm and since pre-wars are desirable, it's a little conflicting advice. Not disagreeing with the premise, though.
Posted by Bing | December 4, 2006 12:18 PM