09/20/2014
NEVER HURTS TO BE FIRST IN REAL ESTATE
By: Perry Roth, Licensed Associate Real Estate Broker, Halstead Property Westside Office.
You cannot contain your excitement. You just went to the first open house of a gorgeous two bedroom condo on the Upper West Side that is clearly your DREAM HOUSE, and the beautiful building has an amazing gym and spectacular roof deck to boot. Furthermore, after carefully doing your homework with your broker, the seller’s asking price is not too ridiculous, just slightly above what comparable apartments in the neighborhood have been going to contract at. You really want the apartment, but you do not want to appear too eager, so wouldn’t it be a great idea to wait a couple of weeks and maybe look at a couple of other units in other buildings to feel more secure?
Well, you would be absolutely wrong. Just like you never forget your first true love in life, a seller never forgets, and tends to be very loyal, to her first true offer, provided that it is a reasonable and well qualified offer. For instance, let’s say the two bedroom condo goes to market at a pretty reasonable price of $2 million. You submit a well qualified offer of $1.95 million putting 50% down in cash, but you waited 10 days after it hit the market. In the meantime, the seller received an offer of $1.95 million the first day his apartment hit the market, but the buyer is only willing to put 30% down. So you think you are in a stronger negotiating position for the apartment? Well, you be dead wrong. The seller has had a full 10 days to become emotionally invested in the first offer. The seller likes the $1.95 million offer (he did not think his apartment would sell for more than $1.9 million based on the comp), but he would love to get $1.975 million. So what does he do? Most likely, the seller tells his first true love (first offer) that he will send a contract out to him for $1.975 million. If the seller feels a little nervous about the apartment appraising for its full value, or the first buyer’s ability to obtain a mortgage, he might also request that the buyer put more money down. In most cases, the seller will remain faithful to his first true love (first offer) unless he or she lets him down (does not do what is asked). So guess what, the first buyer gets a contract sent out to his real estate attorney for $1.975 million and only has to put 30% down. In the meantime, the poor neglected second buyer really wants the apartment badly, but is told by the seller that he already made a deal with his first true love, but will send out a second contract at the full price of $2 million in case his first buyer gets cold feet. You reluctantly say yes because you know where you stand in the pecking order.
Still think it pays to wait to make that offer?
