2008 Sep 15th

Part II – The 3 Worst Things About Over Priced Listings – They Hurt the Seller, the Buyer and the Agent

Hoboken Condo Buyers

There are a lot of different types of buyers.  Some of them clearly haven’t made the commitment to buy.  These “buyers” could have the deal of the century fall into their lap and they still wouldn’t make a move.  Other buyers think they can outsmart the market.  They show up with spread sheets full of numbers showing break even points and comps.  They won’t buy anything unless thy find a property they love and it is being offered at ‘below market value’.  These buyers may spend too much time looking for that perfect deal and miss out on some beautiful, well-priced properties because none ever meet their magical criteria.  Then there is the rare buyer who wants only the most luxurious, most expensive properties – the $4 million penthouse at The Shipyard, the lofts at Garden Street Lofts, the brownstones on Hudson Street or Castle Point Terrace or the huge unit at Maxwell Place with 2 balconies and the dead-on city view.  It often seems that spending the most money possible is their main goal.  These are the extreme cases.  Most buyers are simply looking for a place they would like to call home at a price that they believe represents good value.

Buyers Can Figure Out What a Hoboken Condo is Worth

When buyers have shopped around a bit and have looked at a bunch of Hoboken condos, they start to get a pretty good sense of value.  Potential sellers might do just that when deciding how to price their property.  Go out and pretend you are buying a unit in the price range of the one you wish to sell.  Examining the competition is one of the best ways to gauge how your own property stacks up.  A savvy buyer will have looked at recent past sales to know what the unit across the hall sold for last year.  A good realtor will supply that info to a buyer, along with the price the sellers paid and how long ago and comps for similar properties on the market.  Tax records are public and once it is recorded, anyone can look up what a condo sold for in Hoboken.  Smart buyers can often evaluate the price of a Hoboken property better than the seller.

Why Overpriced Properties Hurt Buyers

 When a buyer walks into an obviously overpriced property it often engenders a bad reaction.  It’s like dining in a restaurant where the portions are small, the service so-so and then the bill leaves you with sticker-shock.  You leave feeling like you’ve been taken.  When sellers haven’t done their homework and overprice their condos, especially in a dense city like Hoboken where it is very easy to comparison shop, buyers get a bad feeling and may be driven out of the market altogether.  Should a buyer actually purchase the overpriced unit, it may come to light later, when comparing real estate stories with neighbors and friends.  This can often be upsetting news.  It becomes even worse when the buyer decides to, or has to sell in a few years only to learn that they paid too much when they bought and they may to have to take a hit when they sell.   Consumer confidence drives markets.

Why do Sellers Overprice?

The short answer may simply be greed.  Overpricing often backfires.  These properties don’t sell – they just become stale.  Ignorance may be the other common cause for overpricing.  Perhaps sellers should read this blog or do some research.  For example, there is a Hoboken condo for sale by the owners who bought it at the height of the market.  They lived in it with their small children (and sticky fingers), did no renovations or significant work, and had their view  obstructed by construction which still has years to go.   They are asking for more than they paid and more than other units of the same size in the same building recently sold –  almost $100,000 more – that is not a typo.  Why would a buyer pay that kind of premium for a property that, if anything, has decreased in value?  Smart buyers know what the seller paid and the sales price of the other condo units.  This property happens to be for sale by the owners.  Overpricing, however, is not limited to FSBOs.  I showed a Hoboken condo a few nights ago listed on the MLS and the listing agent was also the owner.   It was listed for $80,000 more than the last sale in the same building 2 years ago.  The sold unit was more updated, a floor lower, showed better and it still took over 3 months for the seller to get an offer.  How does this agent/seller justifies that jump in price in a market where prices have been steady since ’06?  The potential buyer walked away fast.

Sellers Beware  – Buyer Beware – You Both Need to Do Your Homework

The bottom line is that overpriced properties seldom sell.  The seller is going to go through a lot of time and effort trying to market a property whether on his own or with an agent (see part III).  Buyers, if they have shopped around, done the research and have the information will know when there is value and when there is not.  If the property for sale does not reflect value for the buyer and make him or her feel comfortable about paying the price, the sale does not happen.

Posted by Lori Turoff | Currently 1 Comment »

2008 Aug 15th

Buying A Hoboken Condos Is Just Like Drafting A Running Back

For My Blog Readers Who Aren’t Into Shoes:

Like many people, I love a bargain. Like most men, I also love my Fantasy Football Pool. Now put the two together and you’ll know how I look for late round sleepers. I go to My Street and Smith’s Pre-Season Issue and read every article on every team, from the Patriots veterens, to the 49ers rookies. Ultimately, I will only draft 5 running backs .  The research process itself is hugely important. Not only does it let me decide who I like best, it lets me know which players are a great deal. There is nothing like the thrill of finding a great wide receiver who will be available in the late rounds.ladanian.jpg

Think of Shopping for a Hoboken Condo Like the Search For a Perfect High Round Draft Pick

Just as you would never plan to draft LaDanian Tomlinson with the 10th pick of the draft, when buying a condo, you need to know your budget and what you can get at that price point. If you haven’t talked to a banker, financial advisor or mortgage lender you are doing yourself a disservice. Unless you’re paying cash for your Hoboken condo, you will need a prequalification letter from a lender to make your offer. Even though a ‘prequal’ is non-binding and you are not obligated to use that lender, it makes your offer a serious one. Similarly, just as you know if you’re looking for a running back in the 1st round, you should have an idea in which neighborhood you plan to concentrate your condo search. If you are all over the map its that much harder to focus in on which property would be the best potential home.

The “Health, Availability and Affordability” of Hoboken Real Estate

You can always find a back that’s just a little bit injured, or with a little bit of a coke habit in a late round. We draft them anyway thinking they will heal or stay clean. Sometimes they do, but often they don’t and wind up traded, cut or waived. You might want to draft an Adrian Peterson or Tom Brady but you don’t have a high enough draft pick (i.e. you can’t afford them). So when we select players, we go for a combination of health, availability and affordability. Buying a condo is no different but with real estate the crucial factors are location, condition and price. Like searching for players, a condo buyer has to consider all three factors and find the property in an acceptable location, in good enough condition and within one’s budget. The single best way to guarantee a winning combination when buying real estate is to look at as many properties as possible. Like reading FFN and watching Sportscenter, going to see as many condos for sale as possible will let you know when you’ve hit the winning mix and it’s time to make an offer. But just like frequently happens with players, if you take too long to decide (wait too many rounds), the best ones will be gone and you may miss out on the new home of your dreams.

Posted by Lori Turoff | Currently No Comments »

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