Categories: Hoboken Condos
“But the Comps are Lower” is a Common Complaint
We recently helped a young couple find their dream home. It had nearly every feature they wanted, was in terrific condition, near the PATH and it was within their stated price range. Home-run! They made a full-price offer and (as in almost all instances of this nature nowadays) there were multiple offers and Highest-and-Best bids were requested. We recommended to this couple that they bid an amount over asking (for simplicity, let’s call it $50K.) They were taken aback and pointed out to me that the unit was fairly priced in comparison to other recently closed sales and that offering $50K over asking seemed excessive. I tried to explain to them that there are several factors why it was not:
- A sale that may have closed as recently as today actually was negotiated 30 to 60 days ago. Prices go up quickly in this market, especially for renovated three and four bedroom units which represent a very small percentage of Hoboken’s housing stock. Asking prices are often calculated using closed comps as a guide, but by the time a deal closes, it’s already stale.
- There were multiple bids on the property. That means you weren’t the only person who recognized that the unit rated highly in all three key real estate categories – location, condition and price. Yes, we are suggesting that you bid more than the recent comps, but if you aren’t willing to pay more, you won’t get the property. It’s as simple as that.
- Keep in mind that in a Seller’s Market like this, the “Best” offer might not be the one with the highest absolute dollar value. The cash down payment and/or willingness of the buyers to waive the appraisal, inspection or mortgage contingencies or flexibility with regard to closing dates are all factors that may sway a seller to settle for less than the highest bid. The other side of that coin is, if you don’t have extra cash to put down, if you’re unwilling to waive contingencies and if you’re inflexible with regard to closing, you may need to offer to pay more in order to win the bid. Again, if you aren’t willing to pay more, you won’t get the property. It’s as simple as that.