I have a client whose mother lived in this gorgeous 2-bed 2-bath on prime UES for many many years. Now the time has come where she can no longer live there, and he wants to sell. But how do you go about selling an apartment that hasn’t been touched or updated in 20 years? Allow me to shed some light on selling estate-condition apartments.
What Is an Estate-Condition Apartment?
An estate-condition apartment is usually one that was owned by someone who passed away, or who is too old to keep occupying the unit independently and left it to heirs who are selling it for the proceeds. It is generally understood to be an apartment that has not been renovated in a couple of decades and can be in very bad shape.
For that reason, buyers can expect a deal on the price—but need to be prepared to do the renovation themselves, which is a bigger hurdle these days.
Price It Right
During the pandemic, the spread between the price for an estate listing and a renovated apartment has expanded: Instead of being plus-or-minus 10 to 15 percent, now the spread is in the 15 to 25 percent range. That’s because doing a renovation, including finding a contractor, obtaining appliances and materials, and satisfying a building’s Covid safety protocols has added to the difficulty of doing a renovation in NYC. There’s more of premium for something that is finished, whether it is a co-op or a condo.
Choose the Right Broker
You'll need a broker with experience selling estate-condition apartments being sold by an executor. Although you are implying at the outdated condition of the property when you use words like “estate” and “as-is”, the agent is still responsible for to help the executors get the highest price the market can bear.
Another complication: The executor of the estate more often than not lives in another state, so the broker has to coordinate between family members, attorneys, and the building’s management to accomplish whatever needs to be done, even if it’s just minimal staging. In some cases, there may be valuable furniture, art, or jewelry, which needs to be removed before any work can begin.
And even though there may be just one executor of the estate, they often have to consult with several family members prior to making any decision—which can make every step take a little longer. The seller I was telling you about is actually three siblings, one living on the East Coast, one on the West Coast, and the third one in Europe. Every step of the negotiation of the offer and the contract took a few extra days, since the siblings had to consult one another before getting back to us.
To Renovate or Not to Renovate?
Some buyers and investors search for unrenovated estate-condition listings because they want to renovate to their own tastes, but if you’re selling a smaller apartment, like a studio or one-bedroom, you might want to consider doing a minimal update to the place yourself, especially the kitchen and bathroom, if you can swing it. It doesn’t necessarily have to be a gut job—there’s a lot you can do cosmetically that can refresh a place significantly—like painting the walls, replacing lighting, and making small repairs.
The thinking behind this is that a buyer for a studio or one bedroom probably won't have the assets to do a major renovation and may avoid places that look like they need major work.
Consider Cosmetic Work and Staging
Buyers want it light, bright, and spacious. If doing a renovation is out of the question, hire a stager, clean and de-clutter, and consider doing some minor cosmetic work. That means paying attention to unpleasant odors, painting walls white, and cleaning windows until they're spotless. Painting an apartment gives the highest return on investment, and make sure to always paint the insides of closets because the buyers are going to inspect them.
Replacing light fixtures can update a tired old room, and so can removing the carpeting and putting a shine on the wood floors beneath. In the kitchen, paint the walls, replace outdated lighting, change the doorknobs on cabinets and even buy new appliances if you can. Follow the same lead in the bathroom. Extra touches like painting the front door, changing the hardware on all doors, and installing new light switches also go a long way, and if you can’t refinish the floors, at least get them professionally cleaned.
Give Attention to Legal Issues
If you're dealing with an apartment that is being sold by heirs, you'll need to find someone who can take on any probate/estate work that might be necessary. The most important thing is to bring all information and paperwork to the attorney as early as possible so that he or she can be fully prepared. That minimizes any risk of last-minute scrambles for missing documentation that may be needed to satisfy the title company or co-op transfer agent. A proactive approach can save you more than a migraine-sized headache.
Your estate apartment can be a true gem for the right buyer. As long as you follow my tips and work with a professional, you should be able to sell it easily and smoothly.
Source: Brick Underground