I’ve been penning this monthly Manhattan Market Watch column for nearly ten years and have a sizeable library of articles about New York’s residential real estate market and its trending issues and cycles. In July 2009 at what turned out to be the nadir of the market, I wrote about “The Buyer’s Advantage” and two Januarys later, I characterized 2011 as “The Year of the Buyer.” In sharp contrast, today’s real estate climate is putting many buyers at a disadvantage and favoring savvy sellers. The Year of the Smart Seller is now.

 

Who are smart sellers? They come in all neighborhoods and in all property sizes. They and their brokers share an understanding about market timing and a respect for trading psychology. Their objective is to capture bidding attention in the first three to six weeks of marketing. How they present their homes matters. How they price and handle negotiations is all important. 

 

Since there are no second chances for first impressions, a property ought not to come to market until it is squeaky clean, artfully staged and welcoming. Investing dollars upfront is wise to remove peeling wallpaper, paint walls, refinish floors, repair whatever is broken, edit furnishings, declutter surfaces and organize closets. Experienced brokers and talented staging professionals know how to present a home to its best advantage to maximize its value.

The reality is there are also few second chances with pricing. While some owners choose to test the market with a higher than advisable price, they really shoot themselves in the foot. Not only do they add days to Time On The Market, which ultimately delivers a discounted price, they miss the enthusiasm that comes during the initial marketing period. Overpriced properties are ignored, and as Days on The Market pile up, brokers and buyers become increasingly skeptical about why some properties linger. 

 

My experience has shown that less is always more—with both apartment staging and pricing. When furnishings are spare and tidy, buyers are less distracted and better able to envision themselves in a particular space. When a price is lean and on target, buyers are more motivated to begin a negotiating dialogue. A tight offering price causes everyone to take notice, creates urgency, stimulates competitive bidding and yields the greatest return. 

 

With low supply and high demand, the pace of trading today has accelerated. In increasing numbers, buyers are scouring online listings and crowding open houses. In this particular climate, where well priced properties are attracting multiple offers and selling quickly, it’s especially important for both sides of the transaction to be represented separately by experienced agents. Dual agency, though recognized by NY State, is problematic. Contrary to lay opinion, veteran brokers agree that when each side has its own representation, the transaction is more likely to proceed smoothly. 

 

Personally, I dislike the commonly used expression “bidding war” because it connotes hostility and disorder which have no place at the negotiating table. Effective negotiations depend on trust and should be void of antagonism and absent of ego. For a successful outcome to Best and Final scenarios, it’s essential to set clear parameters and to stick by them. Two of my own negotiations from last week  illustrate. In one where I represent the buyer for a Greenwich Village two bedroom co-op, I learned yesterday that we were outbid. But the co-brokers handled the process fairly. It turns out there were four other qualified bidders besides mine. Although my buyer is disappointed, he has no regrets because he followed my advice and offered the last dollar beyond which he would not kick himself for having lost the property. We’re in first position as back up should the winning bidder not sign a contract in five business days. Once my buyer identifies his next home, he’ll become a smart seller, because we’ll be putting on the market his outstanding one bedroom co-op on lower Fifth Avenue which we will price on the money. 

 

In another situation from last week where I represent the seller of an eight room Park Avenue estate, in order to flush out the boldest and best buyer, I’ve set a seven day deadline for the multiple bidders who have made very similar initial offers. I’ve requested complete deal terms, full financials and personal bios so the executrix and I can evaluate not just the price but each candidate’s qualifications which weigh heavily for co-op board approval. I’ve encouraged all interested parties and their brokers to return to the property for 2nd and 3rd visits to take their time to deliberate just how far they will take their offers. I’ve counseled the seller that once we accept an offer, we stay with the deal and show for back-up only. 

 

Smart sellers will do well in 2013. And so will their brokers.