Which Things Are Negotiable When You Buy an Apartment in NYC

  • Sapir Team
  • 03/24/22

Today’s market is definitely a sellers’ one. That means buyers typically have less room for negotiation. However, depending on the unit and the seller’s needs, you may still be able to do some wheeling and dealing.

Price

Most properties are overpriced by at least 10%. When the market skews towards the buyer side, you can even be aggressive with low-ball offers, and they will be considered. In the market we are seeing today, it may be trickier. With new developments it is often the large, very expensive apartments where the developers most likely overpaid for the land and building, and ended up having pricing that’s not in line with the market, that you will be able to negotiate. You will be dealing with a more sophisticated seller than with a resale, so they’re quicker to pick up on the fact that they have to drop their prices.

If you're looking to negotiate a resale, keep an eye out for these clues that a seller might be keen to negotiate on price: The time the unit has been on the market, changes to the listing brokers and if you see falling prices in comparably priced listings, called comps.

Closing Costs, Flip Taxes and Common Charges

The additional charges associated with a sale are the closing costs. Typically, a buyer is required to pay things like transfer taxes and lawyer fees, but concessions for closing costs are relatively common, particularly in new development. These can be valuable discounts. When the market calls for it, some developers will pay several years’ worth of the common charges, or even double the broker fee!

There are plenty of examples of listings where the sponsor of a condo or seller is prepared to pay transfer fees, and flip taxes on a co-op are also more negotiable. Depending on their urgency in selling, some sellers are prepared to split or take on the flip tax cost.

Unit Finishes and Other Perks

You can't expect a customized new condo, but there are opportunities for buyers to ask for upgrades for finishes or appliances when you have new developments that are not completely built out: developers may offer to help with alterations to the apartment.

In resales, it translates into perks being offered to buyers who come in at asking price, and they can be anything from covering the cost of bathroom fixtures to buying a buyer a luxury electric bicycle (yes, it really happened!)

Closing Credits

This is a discount a buyer gets on the price at closing. You'll encounter this in new development (and sometimes in older co-ops), since it allows the developer to record a higher sales price, something they value because they're selling multiple units. Asking for a credit at closing can be more savvy than asking for the same amount to come off at the start of your negotiations. A drop in the sales price makes a small difference to your mortgage but the same amount in closing credits can be more meaningful.

Be careful though! One of the mistakes buyers make is that they are more worried about getting a discount than they are about getting a good price, so what you really need to look out for as a buyer is the comps that are out there. Some brokers will build potential discounts into the listing price but if someone does list at a good price the property should go very quickly.

As always, I recommend you do your homework about the market and similar listings that are selling or have sold that are comparable to the unit you are looking to buy. You may find opportunities for negotiations if you use a keen eye, and of course, a professional broker can help find those opportunities tremendously.

 

 

Source: Brick Underground