Please click here to see the article in yesterday’s New York Times about Vandenberg’s sale of 357 West 121st Street. At $2,575,000, it was a bit higher than other nearby sales in the last few years. However it is about half the price of our average townhouse sale
price on the Upper West Side.
How to decide the discount (if any) when you are
bidding on a townhouse.
We now have townhouse listings that fit into the category of “great buys.” If you are a buyer in search of bargains, you should identify these, and pounce on one of them.
How should you bid? When we say that prices are down, we must be clear about our definitions and be sure to compare apples to apples.
I have recently noticed that buyers make the mistake of thinking that they can buy for 15% below the current asking price, without realizing that the asking price already takes into account a discount from last year’s prices. Some townhouse sellers will not negotiate at all; others may only be willing to go down 2 or 3% because they have priced their townhouses at a “great buy” price. Bid low on these and the
answer is a simple “No.”
So it is just as important as ever for buyers to educate themselves about the market, in order to avoid frustration. I went to a seminar on “short sales” recently and was told a national statistic about bank forecloses resales. If a bank gains title through foreclosure, they are on average reselling it for a 15% discount of appraised value. Forget the 50% discounts you’ve read about.
To be sure, in general prices are down. I have a recent example of a resale of a finished single family townhouse selling for 15% below what it sold for a year ago. And we have another one that is unrenovated, which is now 25% below the bid turned down by the owner last July. We sold another townhouse for 25% below what we think we could have achieved in the previous market. These are useful statistics, but we must remember that any measurement of discount must be against the previous market, not the current asking price.
