Conventional wisdom has it that the first offer on a property usually will be the best one.
With two co-ops on the market of which I have knowledge, such has been the case.
One was listed for $799,000 at the outset and the other, for $3.95 million.
The first apartment went on the market in early February. A few weeks later, I presented an offer for $730,000 on behalf of a buyer, which was consistent with a comparable sale in the building. The seller rejected our offer without a counter, and we moved on.
Since then, there have been two price cuts, to $775,000 in April and to $699,000 a couple of weeks ago. You can be sure that the owner is filled with regret.
The other property was originally listed toward the end of April. In less than a month, a buyer offered close to $3.3 million. The seller countered, and the prospective purchaser responded with a higher bid while continuing to look elsewhere.
It happens that the buyer found and went to contract on another property not far away, becoming the first to make an offer, at the asking price. And although the listing broker was swamped with appointments, the seller wisely accepted that first offer.
Meantime, the seller of the apartment that had captured the buyer’s attention first has gone begging. Just the other day, that seller apparently saw no choice but to cut the price to $3.495 million — a healthy reduction to be sure.
Considering the overwhelming likelihood that the next buyer will make an offer well below the new asking price, it is easy to see the mistake that the seller made in effectively turning away the first offerer.
Fully 12 percent of the 10,167 active listings in the On-Line Residential (OLR) database have had asking prices drop in a period when contract activity should be far more robust than it has proved to be. Sellers are vulnerable, and foolish are those who cavalierly hold out for the buyer for whom price is no object: Many of them will take a beating.
Property owners in Manhattan price high to negotiate down, become wedded to those prices, take a hard line when they receive offers and frequently end up with less money than if they had just remembered this: The first offer often will be the highest.
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022