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10 Misconceptions Buyers And Sellers Have About Manhattan Real Estate And How To Dispel Them

1. “Prewar Co-ops that line Park to Fifth Avenue are more highly coveted and more valuable than new luxury co-ops “This was true until the arrival of the ultra luxury condominium that not only copied the grand spacious layouts and high ceilings of the prewar co-ops but enhanced them with highly unheard of amenities such as private motor courts , residents’ only restaurants , pools, state of the art fitness centers, Pilates , yoga , wine cellars , children’s play rooms as well as attache concierges that provide an an elite bespoke lifestyle that prewar co-ops can’t replicate.

  • Educating the seller with detailed comparables and taking a seller on a tour of ultra luxury condominiums helps dispel this belief. Many of these prewar co-ops are in need of a major renovation .Once the seller agrees to an appropriate price then I have a “ pre-sale package “ done with renderings, photos and the breakdown of renovation costs . This package helps buyers get over the big fear of renovation and its costs. They end up buying a renovated grand prewar co-op for remarkably less than what they would pay for an new ultra luxury condominium.

2. “The Eastside is the most fashionable, affluent and most desirable neighborhood of Manhattan. “ That used to be true but no longer. The tastes of younger affluent New. Yorkers have changed. They love the contemporary style of the new luxury condominiums or loft style living. Younger luxury buyers love the vibrant lifestyle downtown has to offer and are moving there in large numbers. The majority of luxury sales take place downtown now.

  • Will the Upper East Side ever become fashionable again? There are some signs of a subtle shift of some downtown families moving back to the Upper  East Side. There are a number of reasons for this. One is that developers have been building new condos with the type of highly desirable features amenities that are found downtown such as pools, playrooms, residents’ lounges etc at lower price points. Also there is an abundance of top rated schools on the East Side. Also a number of the Park to Fifth Avenue prewar co-ops have become remarkably affordable since they have come down at 20% in price and some boards are becoming more flexible about ownership.

3. “Prices are the same as the peak of the market!” There are a large number of sellers who have the misconception about their home’s value. They want to price their homes at peak 2015 prices. They don’t want to accept that prices are lower we are now in a slower paced buyers’ market.

  • Here’s how to shift their mindset!

    Sellers who are anchored to their asking price present a real challenge. It is through a slow process starting with a detailed comparable analysis followed by weekly detailed market data updates and a weekly detailed report covering all the data from the marketing such as social media, email marketing , website data etc. Slowly the seller then realizes that a price reduction is needed in order to get the home sold or if the seller can’t get real he or she takes it off the market.

4. “Prices are way down from last year and will fall further.” So therefore I will make very low ball offer since it is now a buyers’ market or just wait until the bottom.

  • The truth of the matter is resale prices are remaining relatively flat. It is the drop in the luxury prices of the new development market that are skewing the numbers making resale prices appear like they are taking a big drop.

5. “ You will earn back what you spend on renovations when you sell.”

  • The truth which can be backed by data is that you are likely to recover at 70% of a moderately expensive a new kitchen and bath. Focus on repairs making sure your appliances and lights are in good working order, fixing your floors, removing tired wall to wall carpeting and and and repainting your walls a fresh linen white is where to spend your money.

6. “ You will get a better deal if you don’t use a buyer’s agent.” You may or may not get the listing broker to reduce his or her commission. The listing broker represents the seller’s interest not the buyer’s . It is in your best interest to have your own broker who can reveal all the data and information about the apartment and building to you and negotiate fiercely on your behalf to get you the best deal possible.

7. “Open houses sell homes”

  • Public open houses are rarely bought by buyers who come to visit open houses. Brokers like them because they attract additional sellers or buyers who are looking to buy or sell homes. Broker open houses do sell homes because the brokers are coming to the open house to shop for homes for their buyers.

8. “List your home at a higher price so you have room to negotiate!” If your home is priced above market value in a buyers’ market as we are experiencing right now, buyers and their brokers will just pass your listing up. Your best strategy is to price it at market value better yet just below the market that will encourage multiple offers. Don’t make the mistake of making a number of price reductions. Historically it has been proven that a sellers will get less if they make multiple price drops than they would if they priced their home at market value right from the start.

9. “ I don’t need to have my home promoted publicly on websites and the media to get it sold for an excellent price” I will have my broker promote it as an “off market listing. “

  • While it is possible to sell a home via this method I certainly don’t recommend it. Why on earth would a seller not want his or her home promoted to the largest pool of buyers in order to get the highest price? Most whisper listings end up going active on the market in order to get sold.

10. Believing that because your home was renovated that it is worth as much as a newly renovated home or on par with new development. If your renovation is ten years old it doesn’t have the same value. Appliances are aging out and soon may need replaced. Your decor may look dated.

  • To dispel this belief it is important to take the seller on a tour of new developments to see what kind of decor , finishes and appliances are in vogue.