In the sub-1M market, do cuts of <5% make sense?

They might be doing it just to show up on price cut searches.

Funny, I just talked to the seller about doing this on one of my listings. The idea is to make the listing show up if the searcher picks "price drops" -- I don't know if that's a search field on the engine you're using, but it is in the database that most of the Manhattan brokers use.

ali r.
{downtown broker}

All price cuts make sense.

There's a price cut search here on Streeteasy, in the Advanced Search options.

I think it's important to remember that price cuts in general mean very little. If an apartment is priced appropriately (using fair comps) then a cut of 3-5% may make sense. If it's waaayyy overpriced, a 20% cut may still not mean a thing.

Good point about the price cut search, although I don't use that in my searches. As waverly said, the cut size does not matter (in a good way) to me, it's the price after cut that I'm looking at.

I read things (correctly or incorrectly) into price cuts. A small cut says "I'm not going much lower".

looking2return, I think that's right, although remember we're in an environment where practically nothing is moving at list -- so a small cut probably means "I'm pretty happy with my list, and I'm less negotiable than the next guy" not "I'm not negotiable at all."

ali r.
{downtown broker}

The best way to find out what a seller is thinking is to make an offer.

looking2return, also remember that in the price bracket you mentioned, a board will not approve dramatic drop because of how it will affect the comps. Example: an apartment that is $600K will not get approved sale for $350K.

ali, I agree.

lo888, my time is valuable (at least to me). After a couple of unfruitful offers last year that wasted my time, I'm less inclined to make an offer if I feel it will lead nowhere.

beholder, I've heard that story (not as drastic as you note). An apartment is worth what someone will pay for it. A bad board is one of the scariest things about co-ops.

looking2return: seller's time is also valuable, at least to them. So if you make an offer at %45 off the asking, it will lead nowhere.
About the boards: once you become shareholder, you appreciate the effort to maintain sane bottom for prices.

beholder - I do think those stories about boards refusing for low offers are just a myth right now used by agents to discourage low-ball bids. I have not heard of any credible situations where a board turned someone down due to a low price.

I am not saying it couldn;t happen, just that I don't belive it has happened yet.

Waverly, you are wrong on that one. My board rejected a sale for 35% off the asking price. It happened a few weeks ago, and I agree with that decision.

Why don't you tell us why you agree with details on the figures. We'd like to judge for ourselves.

beholder, have fun digging your own grave!

Your hostility notwithstanding, here we go:
if a similar place was sold in 2005 for $760000, the identical place should not be sold for $400000 because that sale will bring ALL potential sales down dramatically for a long while, and for no other reason that the seller is (acting) stupid.
If a buyer references to comps, so can a seller, no? Nobody cancelled comps.

junkman, how am I digging my own grave?

Ali, as someone who sometimes searches for price drops, I find the listings with small cuts annoying (and consequently tend to ignore them), because they seem to be done for precisely the reason you recommended the strategy to your client.

According to JasonKyle, price drops are the only thing that matters. He's a sucker for sales at Sleepy's or at the Oriental Rug store. http://www.streeteasy.com/nyc/talk/discussion/8069-200-chambers-street-12c

What does similar mean? How different were the floors, the condition of the apartments? What brought it down to $400,000? Why was it listed well below 2005 levels if that was the case? Is there nothing different about the building since 2005 (land/lease, maintenance)?

Hey Ebutterfly. I like to see where the market is going by looking at the price drops yes. I do that specific search on Streeteasy quite a bit to see if anything I have already seen pops up on it. I usually focus on Chelsea but if the list is small that day I check all downtown. It's quicker than waiting for the Streeteasy updates which have been on the slow side of late. Sorry if you don't approve but since you are a Real Estate agent why would you. It means less commission for you.

Interesting Jasonkyle, my butterfly, if you are looking at apartments that I'm seeling, how does your search mean less commission for me?

Dropping prices for real, which you don't do but should, will mean less commission for you. Don't you work on percentages? It's simple math. Can we keep this embarrassing discussion between us to one thread please. i don't want to bore these poor people.

as I said on the other thread but will repeat here: Find someone else to try and fight with. Your comments are bordering on creepy and homophobic now. It's time to let it go.

Clearly when you just asked me about my sexual position some one must have found it offensive cause your post is now gone and I think only a Streeteasy moderator can do that. I certainly didn't ask them to take it down. I was happy to have your offensive post on display for all to see.

beholder: "report abuse looking2return, also remember that in the price bracket you mentioned, a board will not approve dramatic drop because of how it will affect the comps. Example: an apartment that is $600K will not get approved sale for $350K."

Yet.

"is anyone who's considering an apt. up to $600k not searching to $650 or $700?"

Yes. I'm in the super-cheap price range (compared to most of SE, I feel borderline poverty-stricken). I don't want to pay more than $350K for a 1 BR, and I never search above 400K. If most search engines had 50K price increments, I'd use 350K as the top, because I really don't plan on spending quite that much.