With each new month of 2004, sellers have been enjoying an increasing advantage.  Clearly, we are in a rising market, and the pace of activity is fast and furious for property owners on the east and west side, up and downtown.  Competitive bidding is becoming the norm.  However, not every property is rushing out the door to contract, and we are experiencing a fair amount of buyer drop-out.  Therefore, today’s sellers are cautioned to curb your enthusiasm.

 

What’s the best advice to sellers to maximize returns without alienating potential buyers?  Hire an experienced broker who will feed your pocketbook and not your ego—one who will properly price your property and also control the emotional climate of the bidding that ensues.

 

Proper pricing is not an exact science.  Rather, it is an artful blend of skill, knowledge and discipline.  While it combines the best of astute marketing analyses, it also requires intuition and creativity.   In the current marketplace, one plus one does not necessarily equal two when analyzing comparable sales data.  More often than not, today’s prices are exceeding expectations and bank appraisals.  In the end, a property’s worth is determined by what a buyer is willing to pay.  

 

When Less is More

 

Today more than ever before, a tight asking price will yield the greatest return.  Target pricing creates excitement and stimulates multiple interest.  A well-priced property is expected to attract an immediate response.  

 

Competitive bids require skillful broker management.  If the process is mishandled, the damage can not be reversed.  While various scenarios are being played out today, there isn’t one single way to handle the complexities of each deal.  A seasoned broker takes cues from what evolves.  In the mid 90’s, the Real Estate Board of New York issued recommendations to brokers on handling multiple bids.  However, there are no hard and fast rules to follow.  Most brokers discourage auctions, because after the heat of accelerated bidding, the winner regrets having overbid and walks from a self-created inflated price.  In order to maximize the ability to move forward to the best price, it is important to control the emotional climate of the process.   

 

The highest bid is not always the best bid.  In competitive situations, what matters also are the buyer’s qualifications and terms.  Can the contractual financing clause be eliminated?  Must the buyer sell in order to buy?  What percent of compensation is bonus?  

 

Once an offer is accepted, it’s best to stay with that buyer and continue to show for back-up only.  The ethics of a verbal handshake speaks volumes.  Be prepared to issue a contract to the buyer’s attorney within 24 hours.  Don’t lose momentum.  Have all documents ready for review, including the last two years’ financial statements, house rules, proprietary lease and offering plan, if appropriate.  Set a time limit for a buyer to return a signed contract.    

 

There’s a delicate balance between pricing properly and overstepping.  Be realistic, and be fair.  Be smart, not greedy.  Hire the right broker, and you’ll be guided well.