2008 Aug 25th

The 3 Worst Things About Overpriced Hoboken Condos

Overpricing Hoboken Real Estate For Sale Hurts the Seller, Hurts the Buyer and Hurts the Agent

Over the next few days I’ll address the various problems that can arise by overpricing a condo or house that you intend to sell.  Today’s post is addressed to sellers.

Many sellers think their property is worth more than it actually is.  To them, it is not only ‘home-sweet-home’ filled with fond memories of happy times but is often their single largest asset and may have been their biggest investment ever.  They want a return on their money and hope buyers will see the property through their own rosy lens.  Unfortunately, selling real estate does not always work out that way.

Hoboken is Unique, Especially When it Comes to Real Estate

Sales prices in the Hoboken condo market have been almost flat since about 2005, which is quite positive compared to the rest of the US.  Another unique feature of the Hoboken real estate market is that the average owner owns his or her property for less time than in other places.  Hoboken buyers buy, live in a unit for a few years until they move to the ‘burbs or stay in Hoboken but need more space.  So instead of holding onto their real estate for 7 to 10 years, they want to sell after 3 or 4.  I’ve encountered many Hoboken condo owners who bought condos in Hoboken in 2004 and 2005.  Now, 3 or 4 years later, after a job change, marriage, baby or what ever the circumstance may be, they want to sell that condo.  Often, they not only want to cover the commission of a realtor but also want to make a profit.  Making money on a real estate investment is certainly a reasonable goal.  One has to look at the economic environment at the time one wishes to sell.  If prices are dropping all over the country and they’ve been flat in Hoboken for the past few years, it’s no longer reasonable to think that if you bought a Hoboken condo in 2004 you are going to be able to sell it for a profit in 2008.  If you are very lucky, you might break even.

Bad Real Estate Math

Nonetheless, Hoboken condo owners will say well, I paid $610,000 and with a 5% commission I need to charge $650,000 to clear $610,000 plus I would like to see at least a $10,000 gain so let’s ask for $660,000.  Never mind that the comps show similar Hoboken condos actually selling for $580,000.  Of course, there are agents who will list the condo at any price just to “get the listing”.

Overpriced Condos Are Like Day-Old Donuts

What happens to overpriced properties?  They don’t sell.  Often, they don’t even get seen by potential buyers.  There is enough inventory of similar condos on the market at any given time that, in a sense, Hoboken condos become fungible.  A buyer looking for a 1000 to 1200 square foot 2 bedroom condo around 9th Street will have multiple units from which to choose.  When the vast majority of these condos are priced in the high $500,000’s there is little reason for a buyer to want to see the one priced at $660,000.  They don’t need to.  How much better could it possibly be to warrant an extra $50,000 to $100,000?  There are many condos for sale in Hoboken that represent a good value.  Those are the ones the buyers want to see.

Showings Lead To Offers Which Lead to Sales

No appointments – the listing agent has the meeting with the seller that goes something like this:  “Well, Mr. Seller, we’ve done everything possible to market your property.   We’ve got it featured on every conceivable web site, have held 37 open houses, ran ads, took photos, distributed flyers, and then some, yet we’ve had very few appointments other than the nosy neighbors coming to the open houses.  It’s time to consider adjusting the price.”  At this point, however, the unit has been listed on the MLS for maybe 3 months (or more).  It’s become stale.  The novelty is gone and the excitement among the agent community doesn’t exist.  Agents don’t want to waste their time showing overpriced lisings!  So the price gets dropped but seldom significantly enough to make a difference.

Relisting Your Hoboken Condo For Sale Usually Means an Even Lower Sale Price

The more typical scenario is that eventually the listing expires.  Sometimes the owner will find a tenant and wait a while to sell.  Having a tenant in a property you later intend to sell raises a whole other set of concerns, the subject of a follow-up post to this one.  Sometimes, the property is relisted after the owner has moved out.  Now that beautiful Hoboken condo is vacant rather than nicely furnished.  All the scuffs on the walls show, the place echos, the refrigerator smells and the dust starts to accumulate.  Not very appealing.  The price comes down again.

Get Ready For A Fire Sale

Eventually, when the price gets low enough, someone will buy the property.  At this point, it is a deal.  The condo is often sold for significantly less than it could have been, and likely would have been, if it were priced correctly from the start.  When your condo for sale is the best option for the money, the phone is going to ring off the hook.  Not only will you typically have many appointments, you will often end up with multiple offers.  Multiple offers mean you get to choose the best, highest and strongest among them; a good situation for a seller to be in today.

See Also:  The Donut Story

Next – How overpriced listings hurt the buyer

Posted by Lori Turoff | Currently Comments Off on The 3 Worst Things About Overpriced Hoboken Condos

2008 Jun 17th

4 Big Problems Sellers Must Face When Selling a Hoboken Condo

1. You Have Only 3 MinutesFlowers are a Focal Point

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 GameEveryone Likes Nice Linens

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

I'd Kill for this Hoboken GardenThe 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.Beautiful Details Sell

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.This Says

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.

Posted by Lori Turoff | Currently 3 Comments »

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