How to Price Your Hoboken Condo or Brownstone to Sell
Categories: For Sellers, Hoboken Condos
Thanks to Howard J. Turoff, CPA, & Financial Guru
Price, Price, Price
Everyone has heard the old axiom that the three most important things in real estate are location, location and location. From a buyer’s perspective that is often true, but for sellers, the location is effectively fixed, so the single most important decision you will make in selling your Hoboken condo, co-op or house is the initial asking price. There are a universe of people our there looking for whatever it is you have to sell, be it a 1 bedroom condo, a Victorian brownstone, or something else. Some buyers have just started their search, others have been looking for months and have seen everything there is to see in Hoboken. When your unit hits the market and is shown on the Multiple Listing Service (the “MLS”) for the first time, there will be a flood of initial interest that may never be matched. Pricing your unit appropriately is the very definition of “striking while the iron is hot” to achieve maximum return.
Most Things In Life Fall on a Bell Curve
Like most things in life, the real estate sales market can be described as a bell curve. At one end of the spectrum are beautiful properties, in great locations being offered at fair prices. These units sell immediately - often within the first few days after hitting the market. At the opposite end are not-nice, overpriced apartments in less than desirable parts of town. They languish on the market forever (or at least until the price is lowered sufficiently to make them attractive.) The vast majority falls somewhere in the middle - hence the bell curve. See:
Don’t Make The Most Common Real Estate Mistake
Many people have a number in mind when they first decide to sell. That number may be based on what they paid, how much profit they hope to realize, what they espect to pay in closing costs, or how much money their neighbor got when he or she sold last year. If that number is too high, and I tell them that they will have a difficult time selling their place for that amount of money, they will often say to me “Let’s start with that - we can always lower the price later.” That may be true, but in my opinion it is also a huge, irreversable strategic error.
Using a Bazooka to Create a Sense of Urgency
Have you ever gone to a sale at a department store and seen people frantically grabbing at clothing in a discount bin, or watched people fight over t-shirts shot out of the air bazooka during the 7th inning of a ballgame? There is an urgency to getting those bargains because if you don’t get them, the person right next to you will and then they’ll all be gone. Now think back to what I said about the universe of people in the market to buy a condo or house in Hoboken. You will never have a bigger crowd of interested people looking at your unit as when it first hits the market. You want to create that same sense of urgency - that if they don’t make a strong offer RIGHT AWAY, that unit will disappear and it’ll be too late. Overpricing the unit, killing the interest, scattering your crowd and then lowering the price later is a bad strategy.
Remember Goldilocks and the Three Bears
Drastically underpricing a unit is an equally bad practice. If I see a listing that I know is worth $100,000 more than the asking price, I’m texting my buyers looking for that type of property immediately. I’d try to lock up the offer before the seller caught wind that he should be asking for more and I’d try to get it off the market before someone else did offer more. That’d be great for my buyer, but this article is about sales strategies. No - the best strategy to achieve the highest sales prices, is not to overprice, not to undervalue, but to price it just right - you must correctly value your property at or near it’s market rate.
Reasons to be Cheerful
I’d choose a starting price that is just slightly above the fair market value with the understanding that you may be willing to negotiate a little, but that you believe the price is fair and you are somewhat firm. If your agent has done a good job evalutaing the comparable units available that you are competing against, and your started at a fair and reasonable price, there is no reason to believe that you won’t get multiple offers and may in fact get a price above asking. Then when people tell you how lousy the housing market is, you can just smile.
The Donut Proof
One final thought that I’ve put into the format of a Q and A for your reading enjoyment. We’ve all visted the local donut shop at one time or another.
Q: How much do you think it costs them to make those donuts?
A: I’d guess a few pennies.
Q: How much do they get for the donuts?
A: Around $.50 to $.75 depending on where you live.
Q: How do you know they’re fairly priced?
A: If they’re all gone at the end of the day, then they were priced correctly.
Q: If they’re not all sold at the end of the day, are the leftovers worth as much tomorrow?
A: No, there are newer fresher more enticing ones available and the older ones get marked-down. If they don’t sell by the end of the week, you probably won’t even get back the pennies it cost you to make them.
Do not let your condo become stale - sell it while it is hot!
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Selling your Condo in Hoboken? Here Are 3 Reasons to Fire Your Listing Agent
Categories: About Realtors, For Buyers, For Sellers, Hoboken Condos
1. The MLS Listing of Your Property Has No Photos
There are, literally, hundreds and hundreds of condos for sale in Hoboken today. When an agent is working with a buyer, there is no way every unit can be shown. The agent will choose what to show the buyer based on what they think the buyer might like and, of course, what meets the buyer’s criteria. Most properties listed for sale on the MLS have at least 8 or 9 photos of the property. A photo of the facade of the property is supplied by the MLS automatically when the listing is entered. I am always stunned, however, when I see a listing with no other photos. What is the listing agent thinking? How can anyone expect to have shown and sell a property without photos? If your listing agent has not taken (or hired a pro to take) several excellent photos that highlight the best features of your property and put them up on the MLS, you need a new listing agent.
2. The Flyer Advertising Your Condo For Sale Placed in the Window of Your Agent’s Office is Incorrect
Every Hoboken real estate office displays flyers in the window advertising properties for sale. If you are selling your condo in Hoboken and have listed it with a realtor, you should have a flyer, too. Take a close look at yours. Are there typos? Grammatical errors? Is the listed price correct? What about the taxes and maintenance amounts? Is the description complete and enticing? Do the pictures make your unit shine? If your flyer is not perfect your listing agent is not doing his or her job. The same principle applies to any on-line or print ads regarding your property. In today’s market, everything that is used to market your condo had better be perfect. You need to stand out from the crowd. If your agent doesn’t strive for excellence, find one who does.
3. The Keys to Your Hoboken Condo are at a Real Estate Office Outside of Hoboken
Even though you are selling a Hoboken property, you may have listed it with an agent from an office outside of Hoboken. That, in and of itself , may be problematical but that’s another post. If your out-of-town listing agent thinks that local Hoboken agents are going to drive to Jersey City or Clifton to pick up keys to show your Hoboken property, he or she is dead wrong. If the property is in Hoboken the keys (note I say keys, plural) should be in Hoboken. The harder it is to show your Hoboken condo that is for sale, the less likely it is going to get shown or sold. Unless your agent keeps the keys at the Hoboken office or arranges for a lockbox, it’s time to find a new listing agent.
Hopefully, you will consider these things when deciding who you would have list your property and before you sign on the dotted line. Next post - how a buyer knows if they are working with a competent agent.
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The Weekly Wednesday Wrap-Up - Hoboken Condo Sales Inventory & Activity
Categories: For Buyers, For Sellers, Hoboken Condos, Weekly Wednesday Wrap Up
Italy Trumps Hoboken
So I’m in Italy on vacation but I couldn’t resist checking and posting the figures. Given that I can choose to spend my time thinking about Hoboken real estate or eating gelato and riding my bike in the beautiful Italian countryside, sorry, for this week when it comes to my priorities, Italy wins. But here are this week’s numbers, nonetheless. It’s more of the same - more units for sale and steady numbers of sales resulting in a continued build-up of Hoboken condos for sale.
Hoboken Real Estate - Condo Sales and Inventory As Of June 25th.
Studio & One Bedroom Condos:
Total Active: 142 Under Contract (Dabo’d): 86
Sold (Deals Closed) This Week: 2
Average Sold Price: $502,000
New Listings This Week: 5
Two Bedroom Condos:
Total Active: 303 Under Contract: 114
Sold: 6
Average Sold Price: $591,166
New Listings: 25
Three Bedroom Condos or Bigger
Total Active: 54 Under Contract: 12
Sold: 1
Price: $650,000
New Listings: 2
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The Weekly Wednesday Wrap Up - Hoboken Property Inventory & Activity
Categories: For Buyers, For Sellers, Hoboken Condos, Market Analysis
Hoboken Real Estate - Condo Sales and Inventory As Of June 18th
Hoboken condo inventory continues to increase even though it’s summer time, traditionally a slower season for putting properties on the market. Next week will be the end of the first half of the month and I’ll post a full report on market activity at the start of July.
Studio & One Bedroom Condos:
Total Active: 151 Under Contract (Dabo’d): 79
Sold (Deals Closed) This Week: 8
Average Sold Price: $395,875
New Listings This Week: 8
Two Bedroom Condos:
Total Active: 299 Under Contract: 116
Sold: 10
Average Sold Price: $596,700
New Listings: 32
Three Bedroom Condos or Bigger
Total Active: 55 Under Contract: 13
Sold: 4
Price: $641,250
New Listings: 3
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4 Big Problems Sellers Must Face When Selling a Hoboken Condo
Categories: Design, For Sellers, Hoboken Condos
1. You Have Only 3 Minutes
Let’s say you list your Hoboken condo for sale and, thanks to excellent marketing, have a showing appointment for a potential buyer to come to see it. You’ve got their attention and they are in the door. How long do you think the average buyer spends in each property? Five minutes? Maybe 10 to 15 if they really take their time? To think that you have 5 minutes to convince a buyer to buy your condo is generous. Most buyers walk in, take a quick look around and make a snap decision in the first 3 minutes whether or not they like the property enough to buy it. This decision is a gut reaction and can be very subjective. If they don’t immediately get a good feeling about your condo in the first few minutes, trust me, they are ready to move onto the next.
Your condo must make an outstanding impression in the buyer’s mind immediately. That means you need “wow factor“. Wow factor is what happens when someone opens your front door, steps inside and, literally, says “wow”. Selling real estate successfully is all about first impressions. There are many different ways to make “wow” happen depending on your particular property. An exceptional realtor should present your property in such a way that potential buyers walk in and can picture themselves living there. Unfortunately, many realtors have no clue how to do this and some sellers don’t use a realtor thinking they can do it better on their own. We’ve all seen photos on-line of condos for sale taken with the laundry piled on the closet floor and the toilet seat raised in the bathroom. Many people just don’t get what it takes to make a property shine. The most important steps include decluttering, depersonalizing, modernizing and creating an immediate focal point that draws the buyer’s attention to the defined attributes of your particular condo. Spending all day, almost every day seeing other condos that are for sale certainly gives you an edge in knowing what must be done.
When a buyer walks through your condo and has an internal dialogue that sounds like: “well, if we change the paint color and redo the floors, then put the couch over here to make this room flow better, we could eat over there, and maybe build a small closet against this wall” forget it, it’s over. When a buyer focuses on what is wrong with your condo instead of what is right you have lost the sale. The buyer must be so taken with everything right about the property and can picture living there so easily that they never even notice any potential flaws or drawbacks.
2. Your Taste Doesn’t Matter - Selling a Condo in Hoboken is a Numbers Game
You might have spent years agonizing over every little detail in your home to get it just the way you like it. The problem is, nobody cares what you like. To sell your condo you need to consider what most condo buyers will like. Of course, you can’t get inside every buyer’s head but you can shoot for the most popular choices that are most likely to appeal to the greatest number of potential Hoboken condo buyers. For example, if you’re selling a 2 bedroom condo in Hoboken, remember that Hoboken is full of young couples with babies and they almost always want a washer/dryer in their home to wash the baby’s onesies. If you are selling a 1 bedroom condo in Hoboken, chances are high that your buyer is a young, single professional who commutes to work in the city. Most guys want a place to put a really big flat screen and most girls like a huge closet with adequate shoe and purse storage. Did you think about that when you set up your furniture or organized your closets for showings? Is the first-time Hoboken buyer going to walk in and immediately see the perfect wall opposite the couch for the plasma TV or “ooh and aah” over the little shoe storage boxes built into the closet? You may love the purple walls in the bedroom but do you think more buyers will prefer purple or cream? Even if you never needed or wanted these features what matters now is what your potential buyer likes and wants. The more potential buyers you can appeal to, the more likely one will take action and make an offer and the more offers you get, the more likely you are to sell.
3. There is Stiff Competition in the Hoboken Condo Market - Go See For Yourself
The inventory of Hoboken condos for sale is on the rise. You are not the only game in town, no matter your location or price. Today’s condo buyers have choices. Let’s imagine that you own a condo in 100+ year old, 10 unit, walk-up building on Park or Willow or even Hudson. These long, narrow, two-to-a-floor condos are abundant in Hoboken. Does yours stand out from the others? Have you actually seen the others that are for sale? If not, why not? The potential buyer of your condo will probably see all of them before deciding on which to make an offer.
The same applies to newer construction units like MetroHomes or Fields construction buildings. These units are not inherently that different from one another. They tend to be located in similar areas like the northwest section of Hoboken. Your condo, at whatever price it is offered, must be one of the best available in that particular price range. Hoboken buyers are smart, sophisticated and willing to shop around. Your condo unit must be perceived by the buyers as the best deal in town. If it’s not, your condo is simply not going to sell in today’s market at the price you are asking.
4. Hoboken is a Buyers Market - If your Condo is Overpriced it Will Not Sell
This problem relates back to the other three. Sellers always have reasons why they can’t bother to paint or put possessions into storage or replace the bathroom vanity or redo the kitchen. Sometimes it is unrealistic for a seller take the time or make the effort or invest the funds to build a new closet or rearrange furniture or whatever may be needed. That’s fine. That’s a seller’s decision. There is, however, always an alternative to taking action. If your condo can’t show as the best on the block it had better be a bargain. If your condo does not call out to the average Hoboken condo buyer and make their heart beat faster as soon as they walk in the door it is unlikely to sell unless it is perceived as a great value compared to the other similar condos for sale that show beautifully. There are some buyers out there who would rather get a deal and do their own renovations than pay top dollar to buy a mint condo. Keep in mind, however, that most Hoboken condo buyers are young and busy with jobs and families. The majority of them don’t want to or don’t have time to deal with construction or renovations. Most Hoboken condo buyers want a condo in move-in condition.
How do you know what the sale price of your condo should be? Well, again, if you have a skilled realtor they can help you correctly reach that decision. Beware that many real estate agents out there today are not doing well in a slower market. These less successful agents will do absolutely anything to get a listing. If you tell them you would like to get $500,000 for what is really a $400,000 condo they will list your condo for $500,000 rather than offend you and possibly lose the listing. The problem is, your condo won’t sell if it is overpriced. That real estate agent isn’t too smart because they are going to have to spend time, money and effort to market your property to no avail. If it doesn’t sell, they don’t get paid and you are not happy with them since you likely will see it as their failure to do what you hired them to do - sell your condo. But then, if they were a good agent they would not have taken the listing at an inflated, unrealistic price. So tell your agent you want to go and look at the Hoboken condos for sale that are similar to yours at the price you would like to ask. If you were a buyer, and be objective now, would you choose your condo as the best condo for sale on the market right now? If not, you need to list your unit at a lower price.
Sellers don’t like to hear that they are going to get less than they would like when they sell their condo. Many sellers price their condos based either on what they paid and how much they hope to make in profit or on what their neighbor got for his. Buyers don’t care what you paid. Buyers don’t care what your neighbor sold for last year or last week. Buyers only care about what is for sale right now and how your condo stacks up. Of course, some buyers may decide that no condo currently for sale in Hoboken is worth its asking price. That buyer, for whatever reason, has not made the necessary mental committment to part with his or her money at this point in time. That buyer is never going to buy your condo anyway. The buyer you need to attract and convince is the buyer that is serious about buying a condo in Hoboken now. The serious buyer has made the mental leap and will part with the cash but still wants value, and value is perceived as getting the best possible property for sale.
Remember the 4 classic steps in a making a sale: AIDA or Attention, Interest, Desire, Action. The proper marketing and advertising of your condo should get the buyers attention. When they walk in the door, the WOW factor is going the get their interest. A buyer who can picture himself living in the space has desire. When that buyer feels that your condo is priced right because it represents a good value compared to the alternative he or she will take action and make an offer. Its a formula that’s been around and proven for a long time. Now you know how to put it to your advantage to sell your condo in today’s Hoboken condo market.
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The Weekly Wednesday Wrap-Up - Hoboken Condo Sales Activity & Inventory
Categories: For Buyers, For Sellers, Hoboken Condos, Market Analysis
Hoboken Real Estate - Condo Sales and Inventory As Of June 11th
Studio & One Bedroom Condos:
Total Active: 156 Under Contract (Dabo’d): 77
Sold (Deals Closed) This Week:4
Average Sold Price: $430,562
New Listings This Week: 6
Two Bedroom Condos:
Total Active: 288 Under Contract: 113
Sold: 7
Average Sold Price: $594,285
New Listings: 21
Three Bedroom Condos or Bigger
Total Active: 52 Under Contract: 16
Sold: 2
Price: $836,500
New Listings: 2
Hoboken Condo Absorption Rate
Since we are almost at the end of the second quarter, here is a quick look at absorption rate, or the amount of unsold condo inventory on the market right now.
Studio & 1 Bedroom Condos
- These have been selling at a rate of about 6 per week. With 156 on hand, there are 26 weeks worth, or 6 1/2 months of inventory unsold.
2 Bedroom Condos
- These have been selling at about 7 per week. With 288 currently active, there is a 41 week or more than 10 month supply.
3 Bedroom Condos & Bigger
- These larger units sell the slowest - only .92 per week. With 52 active, there is a 56 week supply - more than a year’s worth of 3 bedroom condos (or larger) on the market.
For the sake of comparison, just last November - the Hoboken condo absorption rates were:
Studios and 1 bedroom units: 384 sold, 136 active = 4.25 month absorption rate
2 bedroom units: 515 sold, 243 active = 5.6 month absorption rate
3 bedrooms and bigger: 87 sold, 61 active = 8.7 month absorption rate
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Should Your Hoboken Grandma Run Your Hoboken Condo Association?
Categories: Finance, For Buyers, Hoboken Condos, Legal Matters
Grandma Ran the Building in the Old Days
Before I say anything else let me make it perfectly clear that I have nothing against Hoboken grandmothers. In fact, for some things, like watching the grand kids, making Sunday supper, there is simply no one better. I’m using grandma to make a point so hear me out. There are lots of small 4 or 5 family buildings in Hoboken that were at one time owned by Grandma. Originally, the extended family lived in them. Then they became rentals with Grandma as the landlord. Eventually the tenants moved out when a smart cookie advised Grandma to condo her building which is now worth millions. So Grandma sold off all the units but one. Now she lives in that unit with her new neighbors, the other unit owners around her. Her handsome profit is safely deposited in the bank. Since it was her building, she kept on ‘taking care’ of the building as she always had. At first, the other unit owners were happy to have her to look after things they just didn’t have time to deal with. Whether it was getting someone to shovel snow, clean the hallways or paint the front door, Grandma had the Hoboken connection and knew who to call and how to get it done.
Times Change - Grandma is in Over Her Head
Fast forward 10 years. Now each unit sells for close to half a million. One is for sale, has an accepted offer, and during attorney review the buyer’s attorney naturally asks the seller for the finanical statements and condo documents. Seller goes to Grandma but all she has is last month’s bank statement. There really haven’t been any formal condo association or board meetings. In fact, there really is no formal board. Grandma, 100% honest, just took care of things as they came up. The seller has nothing to produce for the buyer to show the history of the building, how it’s been maintained, whether it’s being run according to its budget since there is no budget. There is no real reserve fund and no real records of what maintenance has been collected or how it has been spent. Buyer walks away from the deal.
Let’s Teach Grandma a Lesson - Here’s What She (and the Condo Owners) Needs To Do:
1. Elect a board.
When a building goes condo, as soon as a majority of the units are sold, a condo board should be elected. Typically the legal documents that create the condo will dictate what that board has to look like. In small buildings there is usually one person elected president, another treasurer and a third may be secretary. Remember 8th grade history - checks and balances? The same idea applies here. You need a board to run the building. It’s typically required by the documents that created your condo association. If you don’t do it, a disgruntled condo owner could potentially cause problems for everyone.
2. Hold regular meetings.
Sure it’s difficult to find a day or evening when everyone can attend but serving food and beer often helps. Not only will the unit owners get to know each other, you are neighbors after all, but you can talk about what is going on in the building and what you would like to see happen going forward and make plans and develop a budget. Whether it is shopping for a better, more affordable insurance policy (your condo association does have insurance on the building, I hope) or deciding to put flower boxes in front of the building, meetings provide a forum to voice these issues. Again, the condo docs are going to tell you how often and what type of meeting are supposed to be held, and what notice of these meetings needs to be given to the condo owners.
3. Keep records.
The secretary is the one assigned with the task of keeping records of the board meetings and condo association meetings. In a small condo building, the board may actually comprise a person from each unit so there’s not a real difference between the board and the association. Not every word of the meeting needs to be documented, just the general subject of the discussion and any decisions that were made by the board.
Equally important is keeping financial records. Even if it’s as simple as writing it down in a notebook, you want to know where the money is coming from and where it is going to. Did everyone pay their maintenance? Late fees? Any special assessments? Have the bills been paid? There is insurance, utilities for the common areas, possibly snow removal, exterminators, handymen, an accountant. Did you know that condo associations have to file an annual tax return? Someone has to do the paperwork. As much as Grandma tried, you need real books and records.
Why, If You Own a Hoboken Condo, You Should Care
You Will Need Records To Sell Your Condo
Remember that a buyer is going to ask for these records. Hoboken buyers want to see how a condo building is being run. They want to assess the risk of maintenance increases and special assessments in the future. Has the condo association done renovations? For example, if the roof been replaced or common areas redone, showing that to the buyer and being able to account for how big (and small) items are paid for helps you sell your condo!
Buyers Will Want Your Condo More Than Other Hoboken Condos for Sale
There are literally hundreds of condos for sale in Hoboken at any given time. With so many units competing with yours, do you think a buyer is going to choose a unit in a well run condo with books and records showing the history of the building and its finances or a condo where Grandma just pays the bills as they come and can’t find the bank statements when asked? Buyers - here is a tip: when a building is professionally managed, there will be a sign in the lobby of the building with the name and contact info for the management company. Look for it when you are out looking at condos.
Too Much on Your Plate - Not Enough Time For Condo Business?
Hire a management company. There are lots of them that do a good job. They are not very expensive. They will add value to your condo.
The board still has to decide on a budget and only the board can decide on things like how much maintenance charges should be or whether to incur any significant expenditure. Someone from the board will also keep minutes of the meetings and they can be emailed to the management company for record-keeping purposes.
There are lots of more little things a management company can help a condo association do. For example, every time a unit is sold and there is a mortgage, someone from the condo association has to fill out a questionnaire for the bank. The management company does this.
Why A Well Run Hoboken Condo Pays for Itself
When it is time for you to sell, you can advertise to potential sellers that you have a “strong condo association”. Having a “strong condo association” and “professionally managed building” are very big selling points in the Hoboken condo market. It is equally or more important than having stainless steel appliances. Don’t kid yourself, the days of Grandma running the building are over. Do yourself a favor and get your condo in order.
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The Weekly Wednesday Wrap-Up of Hoboken Condos Sales Activity & Inventory
Categories: For Buyers, For Sellers, Hoboken Condos, Market Analysis
Hoboken Real Estate - Condo Sales and Inventory As Of June4th
Studio & One Bedroom Condos:
Total Active: 167 Under Contract (Dabo’d): 71
Sold (Deals Closed) This Week: 9
Average Sold Price: $442,083
New Listings This Week: 15
Two Bedroom Condos:
Total Active: 284 Under Contract: 111
Sold: 14
Average Sold Price: $539,778
New Listings: 20
Three Bedroom Condos or Bigger
Total Active: 52 Under Contract: 18
Sold: 1
Price: $870,000
New Listings: 0
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The May ‘08 Hoboken Condo Sales Figures
Categories: Finance, For Buyers, For Sellers, Hoboken Condos
Hoboken Condos - Prices Are Down in May
Monthly Hoboken condo sales according to the Hudson County MLS show that May was a good month for buyers. Average asking and median sales price dropped below $500,000 for the first time this year. The discount off of list (actual sales price vs. asking price) increased back to 2.41%, about where it was back in March.
The Good News (for Sellers) in the Hoboken Condo Market
Not everything favored the buyers in May. Price per square foot is up, the number of units listed is down, the days it takes to sell, on average, is also down. The average price per square foot for Hoboken condos in May was $532, the highest it’s been since January. The average number of days a Hoboken condo is on the market before going into contract is only 57. I work with many buyers who think they are going to outsmart the current market. They see a fabulous property in a good location that, in my experience, is priced correctly, but they either wait too long to make an offer (and miss out because the condo is already under contract) or they make a low ball bid thinking they are going to get a bargain (and miss out because the unit was well-priced and sold at or close to the asking price.) Prime Hoboken condo units are often under contract the week they hit the market. What is a prime Hoboken condo? One that offers good value and is in a good location. No matter what you may read or hear in the press, these units sell at or above asking price. Many disappointed buyers learn this lesson the hard way by losing out on the best condo they saw during their search. Think of the market as a bell-curve with the nicest, well-priced apartments selling immediately, not nice, overpriced apartments languishing on the market forever and the majority falling somewhere in the middle. Condos that are the cream of the crop, i.e., condo units that show well, are in good locations and are priced properly sell quickly - often very, very quickly.
‘08 Hoboken Condo Sales vs. ‘07 and ‘06
..
When analyzing numbers, it’s easy to make knee-jerk assessments based on a one-month-sales-activity “snapshot” but to make an accurate evaluation it’s crucially important to look for trends over a period of time. One needs to look at a period of months to determine if the Hoboken condo market is advancing, declining or stable. Average sales price may be up a little one month, down the next and price per square foot, may do the opposite. Year-to-year comparisons may demonstrate similar, very slight changes in both directions. In the stock market, that’s known as volatility. While the Hoboken condo sales market appears volatile in the short run, the overall trend has been pretty flat since 2006 and that is a healthy thing. Next month, at the end of the second quarter, I’ll post a chart that shows average sales figures from 2000 to date, by quarter. That will more clearly indicate the current trend in Hoboken condo sales. We are holding steady.
A Few Footnotes to Keep In Mind:
1. The Numbers May Change
The numbers come from the Hudson county MLS system. At the start of each new month, I look up the numbers for the month that just ended. When a property sale “closes,” the status gets changed in the MLS from “dabo” (under contract) to “sold.” Some Hoboken real estate agents don’t enter the change of status immediately. There is no reason for this or hidden agenda on the part of the agent. Closings that take place the last few days of the month may not get entered until the following week. I have entered what has been recorded in the MLS to date. About the second week of each month I check again to capture the sales that were entered late. So should you see my numbers change, that’s why.
2. New Construction is Different
New construction is often sold by the developer. The large buildings at Maxwell Place, for example, are primarily sold through Toll Brothers sales office. These properties are not listed on the MLS so those condo sales are not captured in these charts. Also, gut-renovations of rental properties (a different type of “new construction”) are often sold off floor plans and these units are listed on the MLS far in advance of construction being completed. When this happens, the days on market number is very high. The clock has started ticking before the construction began and sales aren’t recorded until closing - the wait for the Hoboken condos to be finished and granted a C of O can be a long one. It skews the numbers a bit when this happens. These units also tend to be priced higher than resales and that affects the average sales price figure as well.
3. Discount Off List is Only Partial
Usually, when a seller reduces the asking price on a condo, the listing gets pulled from the MLS and relisted at the new price and the days-on-the-market clock gets reset to zero. Discount off of list is calculated off the most current asking price. It does not reflect the original asking price of the property. To do that I’d have to look at hundreds of listings one-by-one and it simply takes too long. If the Hudson board wanted to present more complete information, they could show the original asking price and subsequent price reductions on the listing. Unfortunately, they don’t. A special report, called property history, has to be run on each individual property to see the earlier pricing.
4. What is Prime?
How does a buyer know it’s a “prime” condo? Simply by looking at enough Hoboken condos to be able to judge which ones offer the best value for the money. The most important factors are location and condition. Price per square foot comes into play but, often, things like the layout and use of space, what floor the condo is on, how big the building is, how strong the condo association is (and by this I mean financial strength) all affect that assessment. How many is enough? The more condos you see the better you’re able to compare. Most people only have a limited amount of time to dedicate to their search. My best advice is to work with an experienced, competent realtor whose advice and judgment you trust. Many people just use a friend, but we’re talking about an investment of hundreds of thousands of dollars here and your friend may not be the best choice. Look on Trulia or Active Rain and see who are the top rated agents in your area. The counsel of a good, experienced agent familiar with the area you desire may be what you need to land that prime condo and to pay the right price to get it. But that’s an article for another time.
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One Hoboken Realtor May Be More Than Enough
Categories: About Realtors, For Buyers, For Sellers
With a Multiple Listing Service for Hoboken Real Estate, Everybody Wins
I had an interesting phone conversation this morning with a potential buyer of a Hoboken condo. He wanted to see condo properties in both Hoboken and Manhattan. I was explaining the difference between how real estate brokerages work in Hoboken (and New Jersey in general), where there is a multiple listing service (MLS), vs. Manhattan, where there is not.
If you are a Hoboken condo buyer and find a nice property on-line, say at trulia.com or notice a “for sale” sign on a building while walking down the street, chances are pretty good that the property is listed on the MLS. The agency that listed the condo has agreed to cooperate with every other agency in town to allow all agents to show that property. The more times a condo is shown to buyers, the more likely it is to be sold and at a higher price which is better for the seller. The sales commission agreed upon by the seller and the listing agent, typically 5% in Hoboken, is divided 50/50 between the listing agent and the agent that finds a buyer for the condo. If you’re a buyer and have developed a good working relationship with a particular agent, he or she can show you the place you found on line as well as any other property on the MLS. The buyer wins because the agent gets to know the buyer’s likes and dislikes, doesn’t waste the buyer’s time showing inappropriate properties, and by being loyal to that agent, he or she works that much harder to find the perfect property. After all, agents don’t make a penny working with the buyer unless the buyer actually buys a condo.
Agents Don’t “Compete” For the Buyer
At this point my caller objected. He said he would not work with a single agent because that would not be in his best interest. If all the different agents are competing with one another, he explained to me, he would pay less for his condo. Huh? I pointed out that if he were to buy a condo directly from the listing agent he would still pay the full commission. The entire commission would go to the listing agency. Listing agents don’t give up half the commission when they sell their own listings! Furthermore, I explained, the listing agent represents the seller. It is often debated whether it is a conflict of interest for a listing agent to also represent a buyer (called dual agency). How can a seller’s agent work for the buyer and act as a fiduciary of the seller with an obligation to obtain the highest possible price for the seller’s property? He still didn’t get it. If he didn’t want to work with a single agent and instead went to every agent in town telling them he wants them “to compete for him.” Outstanding agents with knowledge and skill are in high demand and don’t have the time or patience to deal with a “high maintenance” buyer who thinks he’s going to outsmart the world. This buyer may only outsmart himself winding up with an novice agent, and will end up paying the same commission anyway. The really good Hoboken agents often have more business than they can handle.
The Commission is Just “Wrapped Up” in The Sales Price
My caller may have thought that, as a buyer, he had some ability to change the commission to be paid. Maybe he erroneously thought that the seller pays the listing agent only half the agreed upon fee for selling the condo herself or that the fee varies depending on which agent he uses to find the condo - wrong again. The commission is set no matter who sells the home. Sometimes, a seller and listing agent do agree when listing the property that if it is sold “in-house” that is, by the listing agency, the fee might be 4% instead of 5%. That has to be disclosed in the listing information which every agent can see. Which agent finds the property for you has no effect on the sales price. With one exception.
An Agent’s Negotiating Skills Do Matter
When a buyer finds the condo of his dreams and makes an offer, it is the realtor who presents the offer to the seller’s agent. Although the offer is made in writing, hopefully in contract form, there is usually some verbal back and forth over the price until the offer is accepted. It is during this very important stage of offer and counter-offer that your agent’s negotiating skills are crucial. Who do you want working with you when you are a buyer - an excellent negotiator who has worked exclusively for you and know your financial constraints or the inexperienced novice agent who you just tried to scam out of a half a point? Of course, having an agent who communicates well, can express the buyer’s intentions accurately and clearly, avoids emotional entanglements like anger and disappointment, doesn’t make empty threats, and is smart and professional is in the buyer’s best interest. Negotiations can become complicated and heated, especially when there is more than one potential buyer involved. Having a good agent working for you when you find the condo of your dreams may be a great payback for having been loyal to that agent while house hunting. As for my caller, I wish him luck but I have no time for games.
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