Figuring out your bid price after learning the asking price of a home can drive you crazy. Everyone loves a great deal, especially NYC house hunters staring at the list price of a home they really want to get their hands on. What’s better than to get the home of your dreams at a price that you can comfortably live with. You may be thinking, “Well, it’s not even possible to negotiate! The NYC market is out of control.” While it is true that at times it seems like homes here are being bought and sold with Monopoly money, people who aren’t related to the Mountbatten-Windsors or Oprah still manage to buy property here every day. The following tips can help you negotiate a good price.
1. Study recent comps in the building or in the neighborhood. The best way to gauge an apartment’s worth is to find out how much similar apartments in the same building or area have gone for. Those prices — comps — will give you a starting point (i.e., how to frame your offer). Remember to compare apples to apples: Don’t compare a newly renovated home with one that has sat in disrepair for years. If you’re bidding on a unit that needs a lot of work, you may be able to get a deal. Keep in mind, though, that if the unit is in a highly sought-after building with few openings, you may not get as much of a deal as you’d like. In fact, a unit in dire need of renovation in a coveted building may actually end up going for much more than expected thanks to a bidding war.
2. Base your bid price on how long the apartment has been on the market. There are many sites that can tell you how long an apartment or home has been sitting on the market. If the home’s been on the market for a short time, there may not be a ton of wiggle room (check those comps!). If the home’s been sitting on the market for weeks or even months, the owner may be chomping at the bit to unload it and you may be able to negotiate the price down. On the flip side, it may be a good idea to find out why the apartment has sat so long. If the home basically looks great and is priced appropriately for the market and apartments around it are flying off the market, why not this one?
3. Don’t bid so low that you turn off the seller. Yes, you want a deal, but you also want the apartment or home, yes? You want to get a deal if you can, but you don’t want to embarrass the seller by bidding so far under ask that they end up not wanting to work with you at all. If that happens, suddenly that $30k or $50k you may have saved won’t seem like such a deal.
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