Pricing Your Way To A Sale

A: This post is for those who are thinking about or currently in the midst of selling their apartment. As you interview real estate agents and seek representation, be careful NOT to fall prey to those seasoned agents whose current 10 exclusives must mean they are 'the best' and who promise you a higher purchase price than everyone else because they are a Senior VP! This is a fools paradise that you must overcome by realizing that agents do not determine the value of your apartment, the market does that!

With that said, you should at least find out what the last 2 comparable sales were in your building and similar nearby buildings (as well as current ACTIVES) when deciding an initial asking price for your property. Then, ask your real estate agent for hopefully an honest assessment of what premium or lack thereof your apartment demands due to sunlight, views and renovations.

For sake of ease, lets make up a situation that is similar to the real world so that I can put my thoughts into numbers.

Christine Condo owns a 750 sft 1BR condo (naturally) in a luxury doorman building in Gramercy, close to subways and restaurants. Christine owns apt. 8B in a building with 20 floors and enjoys southwest views and tons of sun. Here is the deal:

First, analyze building comps that sold and closed to get an idea of what a past buyer paid for your unit type.

BUILDING COMPS (1BR's ALREADY SOLD & CLOSED)

Apt. 5B: 750 sft 1BR sold for $699K 5 months ago ($932 PPSF)
Apt. 16B: 750 sft 1BR sold for $710K 7 months ago ($946 PPSF)

AVG PPSF = $939

Second, anaylze nearby building comps that sold and closed to get an idea of what a past buyer paid for your unit type.

NEARBY BUILDING COMPS (1BR's ALREADY SOLD & CLOSED)

Apt. 3F: 800 sft 1BR sold for $725K 3 months ago ($906 PPSF)
Apt. 12G: 825 sft 1BR sold for $699K 2 months ago ($847 PPSF)

AVG PPSF = $877

Third, anaylze what similar apartments are currently asking for in your building.

CURRENT BUILDING ACTIVES

Apt. 6B: 750 sft 1BR asking $700K ($933 PPSF)
Apt. 17B: 750 sft 1BR asking $725K ($966 PPSF)

AVG PPSF OF ACTIVES = $950

Finally, price in your specific apartment details to either ADD ON or DEDUCT from these averages + taking into account CURRENT market conditions

CHRISTINE CONDO'S APT DETAILS & MARKET CONDITIONS

Views - Excellent
Sun - Excellent
Renovations - None. Entire apartment needs TLC
Current Market Conditions - Slow. Buyers Have Control

With that said, here is how I would break it down for the client given the building comps, nearby building comps, apartment condition and features, and current market conditions.

HOW TO PRICE & WHAT TO EXPECT

$725,000 ---> If you want to test the waters and price higher than the past 2 building comps than expect 4-7 MONTHS time on the market with the possibility you will have to reduce your price at some point.

$675,000 ---> Most accurate price reflects current market and should result in a 2-4 MONTHS time on market.

$650,000 ---> Aggressive price offers a PPSF of $866, below the last 2 comps sold in building, and should attract good activity at OH's and showings during the week. Expect a 1-2 MONTHS time on market as buyers find value compared to other listings currently on market in same building.

KEY POINT: To move a property quickly your only option is to aggressively lower your asking price. Switching brokers or putting a slightly larger ad in the NYT Sunday Print will NOT do it! The sooner you realize this the sooner you will be able to react and move your property.

REAL LIFE EXAMPLE: Look at Eileen Mintz's listings at 245 E 54th street.

This large 1BR, listed at 862 sft, was first listed on January 22nd, 2007 at $550,000. The price per square foot at asking was $638 in a building whose last few sales were between the ranges of $623/sft - $789/sft.. So, by pricing right this seller got an OFFER ACCEPTED after only 2 weeks on the open market.

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