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« previous: Television: 'Open House NYC' begins a new season   |  next: Buying a luxury condo: the Vertical Living interview »

Monday, September 24, 2007

Ask Barbara

Today we welcome a Q&A from special guest and real estate diva extraordinaire Barbara Corcoran from her column 'Ask Barbara" in the New York Daily News.

Barbara CorcoranQ&AQ. I'm about to buy my first apartment in New York, but how can I tell if a seller's asking price is too high?

A. Asking prices don't have a damn thing to do with sales price, since sellers can ask whatever they want.

It's the buyers who determine the sale prices, based on what they're willing to pay. Often, the asking price merely reflects an oversize ego or a number the seller needs to buy the next house. Well, that nonsense is their problem. The only thing you need to know is what the house is really worth in the open market, and that requires a little reconnaissance work.

The three ways you can educate yourself quickly are by checking sale prices on real estate Web sites like Zillow, Trulia and StreetEasy; visiting neighborhood open houses and getting a professional opinion from a trusted local broker.

After you've done that, you'll know better than anyone if the asking price is too high.

Q. I painted my living room red. Friends tell me I really have to repaint it white before I put my house on the market.

A. Please tell me you're kidding or smoking dope. Red is a wonderful color for romance, but it won't sell your house. In fact, I'd make an educated guess that a red living room could cost you as much as 10% on the sale of your house.

White houses sell for a reason: White is neutral, it makes a room look larger, and it naturally reflects light. And after location, light is the most important quality buyers look for in a house.

Q. I've noticed that prices on Central Park West seem more expensive than the prices on Fifth Ave. If I'm right, how the heck did it happen?

A. Back in the mid-'70s, I got a call from a West Side wacko trying to sell his 12-room apartment at the famous Dakota building on Central Park West.

"I'll give it away," he insisted, "just find me a guy who can pay the $1,400-a-month maintenance fee and it's his."

"No problem," I said.

Well, it wasn't so easy, and I never found a buyer. Everyone with that kind of money to spend on the maintenance was shopping over on Fifth Ave., the hoity-toity part of town.

Now, some of those unwanted apartments on CPW are selling for more than apartments on Fifth. How did it happen? Ask Tony Randall's widow, who just sold her apartment at the Beresford on CPW for over the asking price, which was already a whopping $17.5 million!

In the last five years, CPW has been showered with a ton of super-duper luxury condos in the neighborhood. The massive footprint of all this luxury development has kicked the value of the area's apartments right in the butt.

There's the Time Warner Building, at 25 Columbus Circle; Trump International, at 1 CPW, and now a stunning new building by Robert Stern, at 15 CPW . The condos closing there next month will break records at $6,000 per foot (that's $$$, kids, for a two-bedroom with a park view).

Even the poor units round the back will close for a staggering $3,300 a foot. Meanwhile over on Fifth, the same staple of prewar, old-money apartments hasn't changed one bit.

Rich people today prefer spanking new apartments with all the bells and whistles that they offer.

No one wants to renovate, and most people won't tolerate snoopy co-op boards rustling through their financial statements. So, my friends, meet Central Park West, the new Fifth Ave.

Q. Do you think I could make a $300,000 offer on a condo that's listed at $500,000?

A. You can make a $2 offer if you like. But it won't get you a counteroffer, which is the whole idea of smart bidding.

Before you make your first bid, it's important to know what the property is worth in the marketplace. It's easy to figure out by doing some comparison shopping and viewing local open houses.

After you've seen a dozen similar properties and tracked what they've actually sold for, you'll have a really good sense of what the condo is worth. If you bid too low, you'll insult the seller and get no counterbid - the real-estate equivalent of having a door slammed in your face.

So how low can you go? I say, offer about 15% less than the value of the property. If the condo is worth $400,000, make your bid $341,000. The extra $1,000 is just to mix it up and make the seller feel you've given the bid careful thought. Remember, the price you bid is only one part of the offer. There are other pieces that could be just as important to the seller.

For example, if you've been prequalified for your mortgage and have a bank commitment in hand, you can present the $341,000 bid as "all cash" and waive the financing contingency. If the seller's in a rush to move and you're flexible on closing date, you can present yourself as "willing to close at the seller's convenience."

Finally, don't forget the "people" part of the transaction. Most people love their home, are reluctant to leave and want to sell their home to someone who will enjoy and care for it as much as they have. So if you're smart enough to put your offer in writing, as you should, make sure you tell them how much you love their home.

Q. I've got two cats and I'd like to rent an apartment that has a "no pets" rule. Can the landlord evict me if he finds out I moved in with my cats?

Q.Listen, no pet rules mean one thing: NO PETS. Sure, you can smuggle your cats in, and if you're lucky, get away with it for a while. But sooner or later, either the super or a snoopy neighbor will report you - and you'll be the one sleeping in your kitty box on the street.

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