Tips For New York Condo Seekers in Buyer’s Market

Sorry, sellers. You no longer have the upper hand.

We’ve discussed at length how the newfound New York buyer’s market, and nowhere is this more evident than in New York City, where apartment buyers realize how different things have become. Rather than frantically throwing themselves at the one suitable apartment they find, many are playing the field.

“Multiple offers are in,” Neil Binder, the author of The Ultimate Guide to Buying and Selling Co-ops and Condos in New York City, told the New York Daily News.

If a seller doesn’t like their offer, so what? They’ve got options.

Some New York mortgage seekers are still learning how to function in this new market environment. Broker Richard Ferrari says they should ask the tough questions — and keep pushing until they get answers they like.

Here are the tough questions he means:

1. Don’t ask, “Is the price negotiable?” Instead ask, “How negotiable is it?”

Most of the apartments sold since Labor Day have gone for 90-95 percent of their asking prices. That means sellers took up to 10 percent less money than they said they wanted. So, don’t be shy. As a starting point in negotiations, offer 15 percent less than the asking price.

2. Ask for a price cut even if the apartment is in a new development.

Until recently, developers have been adamant about not giving discounts. It upsets other buyers in a building who have already committed to paying full price. Now, many will negotiate. But only if you ask. That’s how you can get the best deal. In this situation, start by offering 5 percent below the asking price.

3. If the apartment’s in a development project, ask the home builder to pay the real estate transfer tax.

When the market’s hot, home builders make buyers pay the transfer tax. When it’s not, some are willing to sweeten a deal by paying the transfer of ownership tax for you. The tax is 1.825 percent of the selling price - or almost $14,000 for a $750,000 apartment, which isn’t unusual in parts of NYC.

4. Ask for comps, so you don’t overpay.

To be relevant, comps — or comparable sales data — should be deals closed in the past three months. If no apartments have recently sold in the place you want to buy, the next best thing is sales of apartments of similar size, in the immediate neighborhood.

To do this research for you, get a buyer’s broker. It won’t cost you. The broker will get a cut of the commission that the seller pays.

5. Ask real estate agents for references - buyers who are pleased with their work.

There are nearly 30,000 real estate agents in Manhattan. You can be choosy.

6. Don’t ask, “What will this apartment be worth in 3-5 years?”

No one really knows the answer. Don’t force a broker to fictionalize.

The right question is, “What’s this apartment actually worth right now?”

Have your broker explain how he arrived at his answer. Comps should figure into the formula. But he/she should also give a close look to similar apartments that are currently on the market. Are there a lot of them? How long have they sat unsold? Have sellers reduced their asking prices?

When you’re applying for a home mortgage, these things matter.

7. Ask for more time for due diligence.

If the apartment you want is in a co-op building, get extra time for your lawyer to read the minutes of board meetings and question management about the co-op’s financial health. Use extra time to find out details about the quality of the finishes and building materials - things the offering plan and the home builders don’t tell you.

8. If the sellers offer you some incentives - whether it’s the dining-room chandelier or the lounge chairs on the balcony - get it in writing.

A spoken promise is worthless. Remember that.