As a real estate professional trying to assess how the real estate market will behave in the near future, I’m well aware that these unprecedented times are not susceptible to confident analysis. Still, many years of experience do inform judgment, so I have some practical advice for prospective sellers and buyers.
While there may well be some buyers raring to go at the reopening of the market, I feel this is likely to be a slow process — not something that will happen overnight. We’ve never experienced anything like this three-month business “pause.” There will be continuing concerns for our collective health and well-being, and the city, state and REBNY (our own trade organization) have set forth a number of stipulations on how we conduct business to keep all parties involved in the process safe.
From the Seller’s Perspective
Sellers whose apartments had been on the market prior to “New York State on PAUSE” will understandably be anxious to sell because of the time already lost. (This is especially true for those sellers who bought a property prior to the pause and thus may currently be feeling the real financial strain of carrying two properties). Although such sellers will have to be very flexible going forward, others may be more relaxed in their approach. Still, they need to recognize that this is a new market, quite different from what existed before the pandemic.
There are three particular aspects for sellers to keep in mind. The first is the necessity to be reasonable in terms of pricing their property. What it could have sold for a year ago may well be notably higher than what they are able to get today. This ought to influence them both in setting their asking price and conducting the resulting negotiations.
Second, when an offer does come in — even one that is at a level well below their expectations — rather than trivializing the offer, sellers should instead consider themselves fortunate to have received any interest at all in such a difficult market. Swallow your pride and work with the prospective buyer t reach a price and other terms that are fair and reasonable to both sides in the current climate. In such uncertain times, there’s no assurance that another buyer will surface in the near term and, even if one does, at what level that other offer may be.
Third, on a more personal note, don’t blame your professional real estate broker for bad market conditions, a lack of showings or an absence of offers. Unfortunately, we have as little control over the current market as you do.
From the Buyer’s Perspective
The re-opening of the market may present the best opportunity for buyers to dip into the New York market at more reasonable price levels than have been seen in the past decade. However, buyers need to exercise reason and good judgment to make deals that work not only for them but also for the seller. They should listen to the guidance of their real estate brokers and, while using the leverage provided, still take a fair and measured approach to the bargaining.
If you decide to bid on a property, begin with an offer that is reasonable in today’s market, based on guidance from your broker. If it develops that you have more properties to choose from going forward than in recent years, coupled with a limited number of prospective buyers, then the usual need to accelerate the negotiations can be largely ignored. Nevertheless, keep in mind that slow and steady movement in bidding will ultimately be needed to bring the parties together. You also ought to recognize that although you buyers may be sitting in the driver’s seat for a while, the situation might shift back to the frantic demand of past years, so that by hanging too tough, you may have missed your golden opportunity.
Barbara Fox
Fox Residential
14 East 60th Street, Suite 500
bfox@foxresidential.com
212-639-9711
