Bidding Wars are Back!

Last week the New York Times published an article “Bidding Wars Resume” which tells the stories of recent sales resulting from multiple bids from prospective buyers.

As a seller, bidding wars create a situation where you have multiple choices for a sales price – although not always above your asking price. Even in a bidding war it is difficult to obtain a price that is above actual market value for unless the purchaser is paying all cash, the bank providing the financing will perform an appraisal.

Take note of the differences between asking price and market value. Market Value is traditionally defined as the price someone is willing to pay for something. Asking Price is more of a marketing vehicle. It can be set at a point below, at or above market value.

One appraisal firm believes that two-thirds of the estimated 4,000 apartments for sale in Manhattan are overpriced. But those apartments priced 20 to 30 percent the highs of early 2008 are attracting multiple buyers willing to outbid each other, on everything from starter one-bedrooms in Brooklyn to Central Park West luxury enclaves. One two-bedroom on the Upper West Side, for example, sold within two weeks by a Manhattan firm in October for $1.8 million—at over $200,000 more than the listed price—following a bidding war among nine suitors. Brokers are attributing the phenomenon to pent-up demand and a shift in the confidence of buyers entering the market since Labor Day. The weak dollar also helps, attracting foreign buyers.

According to experts, those that are pricing for 2009 or 2010, i.e., “for buyers who think prices might go down another 5 or 10 percent,” are the most likely to attract better bidders. Pricing below market value can actually result in the apartment being sold far above fair-market price.

In any situation - bidding war or not - both buyer and seller should be aware of the data on comparable sales and available competing listings when making their decisions.

Alfred Real Estate is a residential New York City brokerage dedicated to providing outstanding service to home rental and sales clients from all over the world. We will keep you up to date on co-op and condo apartments in Manhattan and recommend the best course of action for your New York City Real Estate.

Digs and Bids: Real Estate Auctions are In

Condominium prices in Manhattan are low and inventory is up. Developers who began construction at the height of the market are now faced with empty buildings stocked with every possible amenity. Owners of luxury apartments are finding that buyers are hesitant to invest in their prize property. In order to cope with the new face of the market, brokers are trying a new tactic: auctions. Auctions are both a way to attract bargain-hunting buyers still on the fence on whether to buy and get the condos sold quickly.

Starting bids are at times more than 50 percent below the list price. One of the less expensive one-bedrooms at an apartment represented by Alfred Real Estate, for example, has a $299,999 starting bid but was originally listed at $660,000.

“Buyers are still afraid of making a definite decision,” says Dan Babush, principle broker at Alfred Real Estate. “Potential buyers are still worried that prices have yet to bottom out—and I would be wary of that. It’s possible that this is the bottom, but an auction is a good way for people to feel like they got the best deal possible.”

“There are amazing luxury properties now up for auction,” says Erica Bunin, principle broker at Alfred Real Estate. “And an auction puts a sense of urgency on the buy. If it’s your dream property, you better show up, or it’s gone.”

Real estate auctions are the fastest growing type of auctions, growing by 47.7 percent between 2003 and 2008.

Brokers at Alfred Real Estate have witnessed the popularity of auctions and believe it’s a sign that the market is beginning to recover. At a recent auction, attendance was more than twice what brokers had expected, and average bids were nearly 10 percent higher than expected. Now is the time to invest in Real Estate, and auctions are a great way to get a fantastic deal on your dream home.

Don't Ditch Your Broker

In today’s market, some buyers have been ditching their brokers with the hope of striking a better deal by cutting out their agent’s commission. Don’t be fooled by what may seem to be an easy way to make a buck—this underhanded move will most likely cost you.
Some buyers also believe that the seller will give them a discount if they don't use a buyers' broker, since that means paying one commission, not two.

"People think they're going to get a better deal if they don't use a buyers' broker," said Kate Meckler, a senior vice president at Sotheby's International Realty, noting that buyers seem more concerned with that than usual in a climate where they are "thinking out every dollar and where it's going in the deal."

In reality, the commission for both the seller’s broker and the buyer’s broker is determined in advance, and the seller generally pays the same percentage regardless of whether it is split between two brokers.

Although there are some cases where the listing agent agrees to take a slightly smaller commission to help a deal go through, buyers' brokers are often more effective at negotiating the best possible price for a client, Meckler said. And new developments are especially keen to work with buyers' brokers in the current climate, where they get less walk-in traffic, since buyers' brokers bring in potential purchasers.

So stick with Alfred. Alfred has exclusive luxury properties and staff whose mission it is to find the top properties that exceed our clients' expectations. Our brokers are NYC Manhattan real estate experts. Whether you are searching for furnished apartments, condos, co-ops, lofts, townhouses, brownstones, luxury living, new flats or developments, we have professionals available to meet your housing needs. Our agents are very accommodating and offer service in English, Spanish, and Portuguese. We will keep you up to date on co-op and condo apartments in Manhattan and recommend the best course of action for your New York City Real Estate.

Timeline for Purchasing a Condo, Apartment, Co-op, Flat, or Townhouse in Manhattan

Now is the time to invest in Manhattan real estate. Don’t be put off by the seemingly daunting task of going through the many steps of buying a new home. Knowing what you are getting into and being prepared make the process not only easy but enjoyable.

Listed below are the appropriate steps to take to ensure you will find the perfect home in Manhattan:

• Seek pre-approval for a mortgage. You will need 1 to 2 days for this. It is very important to know how much you can spend before you spend it. Condominium apartments require at least 10% down; cooperative apartments generally require at least 25% down. However, every building is different.
• Find an apartment. Searching for an apartment can take from 3 to 6 months depending on what you are looking for. The average potential buyer sees 20-25 apartments before deciding on one. Much time can be saved by those who do their own research on the internet before the physical search begins. The average number of apartments viewed by our internet buyers before buying is 4-5.
• Negotiate on the Apartment. Negotiation can take from 3 days to 2 weeks. Everything is negotiable so inquire about fixtures, window replacements, air conditioners, rugs, floors, curtains, appliances, working fireplaces, washer dryers, etc. Apartments are delivered ‘broom clean.’
• Sign a Contract. The typical time frame for this is 1 to 3 weeks. In NYC buyers and sellers typically each have their own attorneys representing them. The seller's attorney draws up the contract for the buyer's attorney and the buyer's attorney performs ‘due diligence’ which includes reading building’s board minutes, financial statements, etc. in order to determine whether there are or may be any hidden problems or expenses in the building. If the buyer is satisfied after “due diligence” is performed, he or she signs the contract and his/her attorney forwards it with a 10% deposit to the sellers who then execute the contract. Contract contingencies include obtaining financing and board approval. The quicker the contract can be signed, the better. A contract is binding only after both parties sign it.
• Apply for a Mortgage and Receive Commitment Letter from Lender. This process can take a number of weeks. Mortgage applications cannot be processed without an executed contract. If an apartment is being financed, the board requires a commitment letter from a lender. These letters are generally the last items to complete a board package/condo application.
• Complete a Board Package or Condominium Application. Allow yourself ample time for this step. Cooperative apartment buildings require board approval before a closing can take place. Condominiums require an information packet to be completed before a closing can take place. In order to review a potential purchaser, the Board of Directors for a co-op demand extensive information in a Board Package. Most Boards request full financial disclosure (net worth) with supporting documentation, employment history, current salary, personal and business references, tax returns for the previous 3 years, credit history, etc. Those who do not want to supply this information should consider investing in a condominium. Board packages/condo applications are given to potential purchasers to fill out after a contract has been executed. If there is no financing, it usually takes about 2-4 weeks to gather the information for the board condominium application.
• Submit Board Package or Condo Application for Review by the Managing Agent. You must allow 1 to 4 weeks for this. The buyer's real estate agent will help complete the Board package and he/she will forward the package to the managing agent of the building. The managing agent will inspect the package to ensure it is complete. The package will then be forwarded to the Board of Director's of the co-op. After the Board reviews the package, they will decide if they would like to meet the potential purchaser.
• Meet the Co-op Board for an Interview. Typical board interviews takes from 30 minutes to 1 hour. Co-op boards typically meet once a month. Although a board interview may be granted, this does not guarantee board approval.
• Receive Approval from Board. You will most likely receive notification from the board about the status of your acceptance in less than 1 week after board interview. The managing agent will generally alert the seller's broker whether a potential purchaser has passed the board.
• Schedule a Closing. Closing dates are specified in the contract of sale, but may have to be adjourned if the board has not given its approval by the contract date. Managing agents generally set the date for closings, and lawyers for sellers and buyers coordinate with the appropriate banks on available dates and times.
• Typical Time Frame from the time an apartment is found, to the time an apartment closes: 3-5 months

Contact Alfred Real Estate and get started on purchasing your Manhattan dream home today.





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Congress approves first-time homebuyer tax credit extension

Good news for people who want to buy a home but just can't close prior to December 1, 2009. Congress has extended the first time home buyer tax credit into April 2010. Obama is expected to sign the bill into law today.

The first time home buyer tax credit extension allows a buyer to enter an agreement with a seller by April 30, 2010 and close on the house by the end of June 30, 2010. First time home buyers are defined as anyone who has not owned a home for the past 3 years. First time home buyers will get an $8,000 tax credit, similar to the tax credit for much of 2009. Other home buyers, who have owned their current home for at least five years, are eligible for a $6,500 tax credit.

Income limitations have been increased to $125,000 for single filers and $225,000 for joint filers. The purchase price of the home must be less than $800,000. The estimated loss in tax revenue to the government comes to $10.8 billion.

“The substantial rise in home sales we’ve seen over the past few months proves that the tax credit is working and is being used by buyers who were waiting for the right opportunity to get into the market,” said NAR President Charles McMillan. “This important incentive is helping to stabilize the housing market, stimulate the economy and create new jobs in communities all across our great nation. Extending and expanding the home buyer tax credit will enable even more families to take advantage of current low interest rates and affordable prices to invest in their future through homeownership.”

Take advantage of the tax credit today. Contact Alfred Real Estate today view furnished apartments, condos, co-ops, lofts, townhouses, brownstones, luxury living, new flats or developments. Our agents are very accommodating and offer service in English, Spanish, and Portuguese.

Yankees Win 27th World Series Championship

The Yankees captured their first title since 2000, humbling the defending champion Philadelphia Phillies on Wednesday, 7-3, in Game 6 of the World Series at Yankee Stadium.

For the past eight seasons the Yankees have led the way in payroll and in many major victories. They have also built a new stadium—and now they have christened it with their first World Series championship in nine years.

The Yankees will celebrate their World Series title with a "ticker tape" parade up the Canyon of Heroes on Friday.

Derek Jeter, A-Rod and the rest of the Bronx Bombers will be celebrating in grand fashion amongst confetti and congratulatory cheers on lower Broadway from the Battery to City Hall starting at 11 a.m.

"Congratulations to all the Yankees for bringing the world championship back home to New York City, where it belongs," said Bloomberg, who revealed the parade plans after the Yanks' stunning victory last night. He will present the keys to the city to the champs at a City Hall ceremony right after the triumphant march.

While anyone can line the route, a limited number of tickets to the City Hall celebration will be available, the mayor's office said. Information on how tickets will be distributed will be available today.

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Manhattan Real Estate Causes Foreign Frenzy

For foreigners, the current state of the Manhattan real estate market is a goldmine of opportunity. Due to the decreasing value of the U.S. dollar relative to other currencies, a home bought by a foreigner comes with a discount averaging 30 percent. Most foreign investors agree: with these prices, you can’t say no.

In the past year there has been a huge surge in interest, especially from Britain, Italy, Spain, Russia and Brazil. In April, an Italian buyer in town for Easter took just 48 hours to buy a $3.8 million two-bedroom condo. Recently, one agency reported selling $30 million worth of property to Russians who are using homes as pied-à-terre. Another agency sold a $2.2 million listing to a British couple who were amazed at the value for the price. The couple had upgraded from a 2,000-square-foot flat in London to a 9,000-square-foot-home in New York. At Alfred Real Estate, agents are traveling regularly to Brazil to help link buyers with properties. These properties often range in price from $5 million to $15 million.

Foreign investors: Now is the time to buy. Contact Alfred Real Estate today.