[MoreCowbell]

First time homebuyer here. If Real Estate negotiations bore you, skip this thread. If you like this sort of thing, read on. I’m still learning about Real Estate and would LOVE to hear some opinions.

We have looked at 40 + apartments, so we have done our research and know the market well. My wife and I found an apartment we loved. The apartment was on the market at $1,150,000. The day after we saw it, we were considering what to do and another bidder stepped up and paid the offer of 1.15. We were upset, and decided, that since that price was agreed upon, but the contract wasn't singed that we would offer 1.16 and see what happened. In the end, the seller stayed with the original buyer. It was the right thing to do, because if I were the original bidder, I wouldn’t have wanted somebody to break a deal with me. I had respect for both parties.

Since we loved the building, we did some research and found a listing for a similar unit in the building. This unit was on the market last year and was since taken off. We figured we would contact the broker and ask if the owner was still interested in selling. We were told the apartment was indeed for sale (they were in the process of re-listing it). We saw the apartment and loved it.

Now, this unit was slightly more desirable as it is a corner unit, 4 floors higher, with wide open city and bridge views and 2 full baths versus 1.5 in the other one. Additionally, this unit includes a fifty-foot (10x5) storage bin, while the previous unit did not. This listing had an asking price at 1.25, which even the broker admitted was crazy.

We decided that we would pay up 1.185 and that the 35k premium over the other unit was fair. We then decided, to leave ourselves some bargaining room, we would offer 1.165. In addition, because the current owner did not buy another place yet, or have a plan, that we would offer a delayed closing.

So, we submitted the bid and waited. About 48 hours later (yesterday), the owner counter-offered at 1.245. This was ludicrous.

He also communicated, through his broker, that the storage bin was worth 15k and could be sold for 15k to another owner in the Condo. We don’t deny that the other bins have sold for 15k, it’s public record, but we are unsure how easy this would be to do.

We were ready to give up, and really thought that his 1.245 counter-offer was a simple indication that the owner just wanted to sell if he could get somebody to overpay, otherwise would just stay put. The broker (by the way, the broker is HIS broker, I do not have one) seemed to think that a “Best and Final” bid of 1.2 might have a “shot” of being accepted.

I STILL think the apartment is worth 1.185(based on comps and other factors). I told the broker that my father was actually a licensed broker (he was a builder, so he’s had his license for a long time) and if he wanted to make a sale, he could co-broke with my father (my father would turn the fee over to me) and that would help me to sweeten my deal. He agreed to shave 12.5k off of his fee to the seller (this is great because it alleviates the tax I’d have to have paid on the income).

The issue remaining in preparing my final bid was still the storage bin, which I did not feel would be easy to sell at 15k and wasn’t worth the premium. My thoughts were this: if the seller is so sure that he can sell the bin for 15k(it has a separate deed) that he should do it himself.

So, this morning we submitted a “Best and Final” bid. He is what it I offered:

-Increased purchase price by $20,000 to 1.185.
-The fee he would owe to his broker will be reduced by $12,500(seller’s net increases 12.5k)
-We will grant a “sellers option” to sell the storage bin, on the closing date, in a separate transaction, to me for $7500. In essence, what I have given him is the contract?closing period to attempt to sell the bin himself for the full 15k. If he can’t, he can still sell it to me at end for $7500. We think this a fair compromise.

If you add the three items above together, this increases our bid by $40,000 or $47,500 depending on whether or not he exercises the option on the bin.

We are now waiting for a response. Do you think we did the right thing? Was my offer fair? How might he react?

Thanks in advance.

[NFS13]

I am guessing the apt is in NYC somewhere? If yes, what area? That may be the biggest factor when it comes to investment value and deciding if the asking price is fair. Did you get new comps for apts on that floor?
My thought would be, 4 floors higher, extra bathroom, better view, and 10x5 storage = 8% more. 1.25 might be a fair asking if the apt does not need anything, but his counter of 5k off seems like he is in no hurry.

[tommydogsdad]

As a Real Estate Agent for the past ten years, here are my $.02

GREAT response to the seller's ridicuolus counter! What you did was help the Broker show that this unit is over-priced to begin with. While your first offer still seemed a bit low to me, your second offer was more than fair. If the seller is so confident he can get $15k for the storage bin, then he shall have to prove it. If the seller doesn't accept your offer , I would continue to look elsewhere. You should find an agent who can help you in your search. Since the current agent you're "working" with was so generous in reducing his commission, I would consider working with him.

The advice I always give to my home buyers is this. Take a good look at 10-15 homes and rank them (I have a criteria sheet that I have my buyers complete.) Your highest ranked house is the one you should make the offer on, and offer full price, less .25-.50% IF the market will allow it (if AND ONLY IF it is a balanced market). If it is still a seller's market, you should offer the list price or higher. What's my reasoning for this? In the end, what is $10,000 tacked on to a $1,000,000 mortgage? Nothing. $10,000 is insignificant to a buyer, but it could mean everything to a seller.

[Guga79]

Being in the Real Estate market in the financial side. I completely agree with NFS13 and tommydogsdad.

With the firs response, since you do not have a broker on your side I would defenitaly check the comps, better yet I woul get myself a broker. Being a first time home buyer specially on the price range that you are looking at you are basically not protecting your self. Unless you have knowledge in the process of buying a house that I am not aware off.

Your second offer was more than fair.

Good Luck

You probably have your finances in place but if you don, let me know. Although I am in FL I do plenty of business in NY. I am a Mortgage Loan Officer for Bank of America. I can almost guarantee I ll beat any deal you have been offered

[findtom]

Did the other unit have a view as well?

Views and window frontage are huge $$$ factors with city apartments, more so than a storage unit that you can probably buy down the road even if you lose it (I mean $15K in the grand scheme of things ain't much).... so I'd say you are in a good position if you've got the seller distracted by that.

Sorry, not much help... but sounds like if you can come to an agreement on this one you'll be thanking your lucky stars the other one fell through.

Good luck.

[SteveMD]

Just wondering, what is the monthly payment on $1.15M worth of apartment?

[SpencerM3]

As a commercial real estate broker, your offer sounds reasonable to me.

However since the Seller took the proeprty off the market a year ago and your offer today was more or less a "blind offer", what is the Sellers real motivation to sell? I'd guess that if he doesn't get exactly what he is looking for he will just pass.

Regardless good luck.

[bavarian19]

For 1.15M, that apartment better perform sexual favors on a regular basis...


I never understood that aspect of city living. I would much rather have a house 4x the size of what I could afford in the city, and still live relatively close to it.

AAR, best of luck with the bidding. Buying a home (unless your overextended) is the best investment you could make...

[MoreCowbell]

Originally Posted by NFS13

I am guessing the apt is in NYC somewhere? If yes, what area? That may be the biggest factor when it comes to investment value and deciding if the asking price is fair. Did you get new comps for apts on that floor?
My thought would be, 4 floors higher, extra bathroom, better view, and 10x5 storage = 8% more. 1.25 might be a fair asking if the apt does not need anything, but his counter of 5k off seems like he is in no hurry.

The apartment is is Manhattan, on the Upper East Side. No comps exists for this line or floor within the last two years. There is the same line offered 3 floors higher of for 1.235, but that unit has som anomalies(weird juts, lower ceilings) because of some building machinery on that floor only. Regardless, that unit has stuck around for quite a while at that price.

[MoreCowbell]

Originally Posted by Guga79

You probably have your finances in place but if you don, let me know. Although I am in FL I do plenty of business in NY. I am a Mortgage Loan Officer for Bank of America. I can almost guarantee I ll beat any deal you have been offered

Let's talk offline. PM me.

Another guy on this board has been helping me with mortgage and h has been fantastic as well.

[MoreCowbell]

Originally Posted by findtom

Did the other unit have a view as well?

The view in that unit was OK. Very average.

Th view in this unit is amazing.

[MoreCowbell]

Originally Posted by SteveMD

Just wondering, what is the monthly payment on $1.15M worth of apartment?

For 1.185, this apartment:

30 Year Fixed: $6690 Mortgage + $1300 Taxes/Common Charges = $8240

[MoreCowbell]

Originally Posted by bavarian19

For 1.15M, that apartment better perform sexual favors on a regular basis...

LOL

[SteveMD]

Originally Posted by gluck75

For 1.185, this apartment:

30 Year Fixed: $6690 Mortgage + $1300 Taxes/Common Charges = $8240

Wow. And I assume that's normal in Manhattan. That is insane. Good luck. I grew up and bought my first property in London 20 years ago. I feel your pain.

Now in Maryland, for that money in my neck of the woods, you would be looking at a 5000-7500 sq feet McMansion on 3-5 acres with a detached 4 car garage and your own landscaping crew

I'm only 30 minutes from downtown Baltimore, 60 mins from downtown Philly, 90 mins from DC.

BTW, I have a 675K house and my mortgage is less than your taxes

[MoreCowbell]

Update:

Seller declined. Stayed at 1.245.

I'm pissed.

[flush01]

wow... where I live you could buy insane house for 1.2mills and im like 20min away from downtown toronto

[MoreCowbell]

Originally Posted by flush01

wow... where I live you could buy insane house for 1.2mills and im like 20min away from downtown toronto

That's Manhattan for you.

[sixspeedsam]

Originally Posted by SteveMD

BTW, I have a 675K house and my mortgage is less than your taxes

What?!? In other words, you either rolled a lot of equity from a previous home or you put down one hell of a down payment

[MoreCowbell]

Originally Posted by sixspeedsam

What?!? In other words, you either rolled a lot of equity from a previous home or you put down one hell of a down payment

Agreed, but good for him though!!!

[darkcloud]

Originally Posted by SteveMD

Wow. And I assume that's normal in Manhattan. That is insane. Good luck. I grew up and bought my first property in London 20 years ago. I feel your pain.

Now in Maryland, for that money in my neck of the woods, you would be looking at a 5000-7500 sq feet McMansion on 3-5 acres with a detached 4 car garage and your own landscaping crew

I'm only 30 minutes from downtown Baltimore, 60 mins from downtown Philly, 90 mins from DC.

BTW, I have a 675K house and my mortgage is less than your taxes

That's the beauty of most cities. My whole family is from the NYC area the closest to the city is 1 Aunt in Norwalk, CT the other is in Wilton, CT. When they came to Cleveland and saw what they could buy for the kind of money they spent on their houses they almost choked to death. Both Aunt's are pretty well off too, the one in Wilton just picked up a M5 last month:rocks: after turning in her 98 M3. I can't wait to drive that sucker this summer .

Anyways good luck on the search. Not getting that apt. just means you'll eventually find something better.

[MoreCowbell]

Originally Posted by darkcloud

Anyways good luck on the search. Not getting that apt. just means you'll eventually find something better.

Thank you...

[findtom]

Originally Posted by gluck75

Thank you...

So you're walking from this one?