Making Offers

Today, I showed two houses, one to a couple who said that they had heard that it is appropriate to make an offer of 10% asking. I get this question a lot and it baffles me every time. In my opinion, you should not be thinking in terms of percentages. That sounds like some media hype nonsense to me.

It's not a sound way to determine your offer. The best way to determine value is to take comparable sales over the past six months and judge by what other people have paid recently. That is market value. Ok, you may need to adjust down or up in terms of making an offer now as opposed to the offer made on a similar property six months earlier, if the market has changed dramatically during that time period. Overall, within a six month period in a stable market like Hoboken, comparables give you a very good idea what is an appropriate price to offer and to pay. It is how appraisers determine value for the banks. You adjust your offer according to upgrades or lack of upgrades compared to other sales. That's what an appraiser does also....though he uses an excel-style program assigning dollar values to things like outdoor space, additional baths, parking, etc.

If you are going to make an offer on a property, the most reasonable way to determine the value of the property is comparables. That is also how Realtors determine list price (though we sometimes have to price higher because a seller will not trust our judgement based on the comparables). In any case, ask for comparables and then talk to your Realtor about whether it is reasonable in the current market climate to offer more or less based on those comparables.

Condo Price per Square Foot

In Hoboken, price per square foot can vary greatly. Three major factors influence price: location, condition and amenities, and size. Large square footage is anything 1500 square feet and larger. Anything larger than this, whether a modern condo in an elevator building or a duplex (two floor condominium unit, usually in a brownstone) will have a sizeable number of prospective buyers who are usually trading up to a larger space due to children in the household.

What is often surprising for sellers of large units is that most command a smaller price per square foot than, say, a one bedroom unit. A nice one bedroom with decent square footage, good location, and amenities can easily price out at anywhere from $570 a square foot to $800 a square foot plus. Last summer, I sold a very nice duplex with amazing period plaster ceilings, a yard, and a nice kitchen, for $800,000, or $500 a square foot. A larger condo in a location seen as undesirable by the majority of buyers, even one modern and renovated, can fall well below $500 a square foot.

For the most part, however, Hoboken square footage pricing starts at $500 a square foot. For a larger unit to command more than that, it must have parking or a great kitchen, amazing outdoor space, or a view. A prime example is my recent sale of a three bedroom 2006 square foot condo in Maxwell Place. This resale had parking, a doorman, a gym, a great location, two balconies, the most modern of kitchens and baths, and the most incredible view of the NYC skyline, the Hudson River, and the George Washington bridge that I have ever seen. It sold for about $1122 a square foot.

Houses-The Size of Things

Hoboken houses range in size from 12-1/2 feet wide on Willow Terrace to 25 feet wide on Castle Point Terrace. Most houses are from Hudson Street to Willow Avenue, or on side streets from 1st up to 13th and east of Willow.

House lot depth can run from approximately 50 feet deep to 120feet deep. The Willow Terrace houses can be as small as 950 square feet with the original floorplan or 3,000 square feet on Hudson St or Castle Point. Houses on the side streets have shorter lots. The problem for many prospective house buyers is that the layout of the brownstones does not allow for three bedrooms on one level. The original floorplans on many of the main streets of Bloomfield, Garden, and Park, technically have three bedrooms but most people combine the two very small back bedrooms to make one room. Houses that are 13.5 and bigger, particularly the houses 15 feet wide, have two bedrooms on the second level and two on the third, usually with a bath off the hallway on each floor.

Larger houses have a parlour floor, and two floors above, with a basement below the garden level. Kitchens can be on the ground level or on the parlour level. Some people dig out their basements to create greater ceiling height, below the garden level, for additional space....though this can cause problems.

Many people can only afford about 1 million, but unfortunately, in Hoboken, this buys you a house that needs substantial work or is far to the west. There are very nice one and two family homes on the side streets that can be purchased for somewhere between 1.1 and 1.3 million that do not need huge amounts of work but you will have to sacrifice the yard or space.

Large houses of 18 feet and wider with 90 feet lots or better exist on Hudson St., Castle Point Terrace, and the 900 block of Washington (known as Doctor's Row). Houses, one or two families or converted three families, of that size can be found on Garden between 10th and 11th. Individual random homes on Bloomfield, Park, Garden or Willow also exist. Houses of this size command a sales price of 2 million plus unless they are in need of substantial renovation. The most expensive finished houses on the Hoboken real estate market are now in the 3 million range. range.

Fourth Floor Walk-Ups

In the current buyer's market, walk-ups have been suffering. With more properties available in Hoboken, buyers are more reluctant to deal with the top floor walk-up. For what is considered by many to be the best locations (the streets of Hudson, Washington, Bloomfield, Garden, Park, and Willow), we are finding that buyers don't seem to mind third floor so much. However, they are balking at the fourth floor or above. Of course, this is even more true for walk-up condos further west. Sellers can and have overcome this problem. Fourth floor walk-ups can overcome the stigma of the additional flight of stairs with substantial upgrades such as stainless steel appliances, granite, marble in the kitchen or bath, newly refinished floors, central air or new installed a/c wall units, and washer/dryer in the unit. Sometimes, it requires all these upgrades. Buyers feel these properties should be negotiable unless they are completely tricked out in all the high end upgrades. We are seeing that people will pay for high end upgrades, even if top floor walk-ups.

The good news for buyers is that many of these properties are the best deals available in Hoboken. In the Sunday real estate section, The New York Times recently ran an article on the deals to be had if you buy a fourth floor walk-up in the New York market. They have great light and you have no one "walking on your head." You can get more square footage for the money, and sometimes, more in upgrades. The downside is that it will usually take longer to sell your unit and sellers will rarely get the same price as just the floor below would, even for an identical unit with similar upgrades. On the other hand, when selling a top floor unit, upgrades and good staging can make a big difference.

The MLS and Pictures

The best way to list your property is to use a reputable real estate office, hopefully one with good business ethics, to represent you. And a good real estate knows the value of the MLS and will use it to your benefit. That includes writing a detailed description that will interest your prospective buyers and quality pictures that will lure the buyer into coming to see your property. Pictures are of the utmost importance. Listings that do not have good pictures in the MLS fail to draw the same number of buyers. Pictures of a well-staged home. Obviously, if your place is a mess or your tenants of your property are piggy and cannot be prevailed upon to straighten up, you are better off without pictures. But overall, pictures are the greatest marketing tool. Pictures on the MLS listing, pictures on the flyers, pictures in the window of the real estate office for browsers to view. Before signing with any agency, ask them to send your their MLS listings so you can see if they put multiple pictures on their listings. Ask to see a flyer during the marketing presentation. And above all, insist that your listing is on the MLS and the keys are readily available at the front desk for other offices to show the property. Beware offices that want to hold an "exclusive" and run from offices that do not have top-notch pictures on MLS listings and good looking flyers. Marketing tools are often simple enough, but the quality will reflect on your property.

House Buyers

Today, our office visited several broker open houses. In conversation at a condo listing that had excellent Mango and Strawberry smoothies, we talked about the housing market. My broker, Maureen Singleton, had a lengthy discussion with another leading house seller in the area, a brokerage that is sometimes our competitor, and a respected office. The managing agent and broker of that office reaffirmed what we have been seeing: the brownstone market is turbulent. Lately it goes through ups and downs. We will sell a bunch of houses suddenly and at good prices and then a month later, similar just-as-good houses, sit and don't sell, sometimes for months. It is unpredictable. Overall, the brownstone market is a very strong market. Houses are few and demand is great. However, nervous buyers are more hesitant lately and more demanding during attorney review.

We talked about the oil tank issue. Increasingly, it is a problem. Buyers generally just want them out of the ground. Typically, they are tested first and usually fail, therefore, the sellers must remove the tank. Occasionally, the tank checks out and the sellers do not want to bear the additional expense. But more and more, it seems to be an unavoidable headache for the sellers and just part of a list of demands that buyers expect to have met.

Home Staging

Sellers ask if home staging really works. It does. I have seen it again and again. Often, a seller is reluctant to make the changes that the home stager deems necessary. Often, sellers feel insulted that the home stager thinks the rug that they picked out or the curtains that they love should go. A home stagers agenda is simple. The idea is to present the property in the best light, literally and figuratively. If there are great wood floors, you want to show them off, not your rug. If the curtains are heavy or a busy design, no curtain, or white sheers, may be better to create greater light in the property. You want to accent the best parts of your home. However, nice furniture does help, though it is not an aspect of the condo or house itself. Most home stagers will want you to remove clutter, as much as a third of your furniture, and paint any dark- colored rooms with light paint. You want the buyer to be able to imagine themselves in your home, which might be hard for them if your bedroom is maroon. Also, all smells should be eliminated and air fresheners in vanilla or another less-perfumey scent is a good idea also. Lastly, a bit of greenery can really add to the overall feel of your condo or house for very little money. Take the time to prepare your home and you will have a much more positive response from buyers and a higher sales price.

The Dog Days of Summer

Sellers often ask whether it is a mistake to put their property on the market in the summer. Ideally, you want to put your condo or home on the market in the Spring. Though the inventory increases across the board, the buyers come out from hiding after the winter and it is traditionally the strongest time of year to sell your property. In Hudson County, "Spring" starts as early as mid-February. We had an early Spring in terms of sales this year, in fact. Activity slows down after Memorial Day and is extremely slow from the 4th of July through Labor Day. A second market picks up in the Fall. However, if your condo has not sold by now, do not despair! Last year, as an agent, I closed on three properties in late July, all of which went to contract in June. And the previous year, I sold several properties in August that closed in September and October. The lesson is this: if you are selling your home and it is on the market in the summer, be prepared for it to take longer than it might otherwise. Buyers are at the shore, on vacation, or just not motivated to brave the heat and look at properties, let alone consider moving in the dog days of summer. Selling a home in the summer takes patience but it can certainly be done!

Open Houses

When you sell your home, during the average listing appointment, the real estate sales associate will tell you that part of the marketing plan is to do a broker open house and public open houses. From a professional's point of view, the broker open house may be the more important of the two. Broker open houses introduce your property to the real estate community...all those people who will be trying to sell your home, potentially. When you have already seen a property, it is much easier to talk about it, and to know whether or not the customer you have been working with would like it. In Hoboken, because the inventory is plentiful and the parking a nightmare, a listing agent will lure her/his colleagues to his open house with food from Margherita's or homemade cheese cake, or sushi! But that exposure is important and worthwhile. Sometimes, for condos that Realtors suspect are "typical", as in railroad style or non-descript 1980s construction, it may be hard for your listing agent to drag agents in. But overall, it is a worthwhile endeavor, especially for more unique or renovated properties.

Public open houses are, unfortunately, rarely productive. I have sold properties from an open house, but it rarely occurs. The statistic often quoted is that 98% of properties for sale do NOT sell through an open house. The initial open house makes sense to introduce the property to the public. Active buyers are watching what is coming on, as are their agents, so the first open house is the best. Sometimes, another open house, after a significant price change, also makes sense. But repeated weekly open houses, touted by some agencies as necessary and what they will "do" for you, are largely a waste of time for a single unit and may arguably make you look "desperate". In fact, many agencies do lots of public open houses primarily for agency exposure, and so that new agents can meet and potentially pick up buyers. The exception to the rule is public open houses for a developer's project of a new building or a recently renovated and condo-ed building. A building with multiple units available is another matter.

Bugs

In most condo sales, in Hoboken anyway, issues with termites or other pests is a rare occurence. Pest problems are less likely in more modern buildings. Mice are a common nuisance in older buildings but easily treatable, either with poison (not the preferred method because the mice can die between the wall and smell) or by old-fashioned traps with peanut butter on them. And many a Hobokenite has has a sudden infestation of tiny ants in the Spring. You know it is Spring in Hoboken when your bathroom has tiny ants all over the floor! These ants swarm and disappear after a few weeks. But real pest problems can arise, particularly when buying or selling a house as opposed to a condo. It is not unusual for the home inspector to discover evidence of termite damage. Often, it is hard to tell if the damage is old or new. Regardless, the bank will want documentation that the property has been treated before they will mortgage a property where a potential problem exists. Evidence of termites is usually nothing to panic about. More often than not, the damage is confined to a small area or may even be old damage that was already treated by the last owner. However, it is often a necessary expense of the seller prior to closing and non-negotiable in terms of the buyer being able to mortgage the property.

What is a "green" building?

There is a lot of buzz about green building these days. As a realtor, when I first heard the term, I thought, “Great, another new gimmick.” I doubted that it was a concept that was worth much, assuming that it was just a new way for builders to separate themselves from the pack, make their building stand out to buyers. I doubted whether the buildings in town claiming “green-ness” were doing much to help the environment. I also wondered whether the whole idea of “green” building was legitimate. What can I say? I’m a skeptic.

But according to the website www.greenbuildingnyc.com, two of the green builders working in town have successful track records and are promising newcomers to this new form of building. Web publisher Stephen T. Del Percio is an authority on green building. A green business and construction attorney who practices in New York and New Jersey, and a LEED Accredited Professional, Del Percio has a BS in civil engineering from Columbia and works for a Manhattan firm that “exclusively services the design, construction, and real estate industries.” In his December 2007 posted article, Stephen T. Del Percio Esq. writes extensively about SJP Properties and Bijou Properties.

New Jersey-based SJP Properties is responsible for the 14-story, 500,000 square foot Waterfront Corporate Center II, the building adjacent to the under-construction W Hotel being built on River Rd. SJP Properties is seeking the Silver level of LEED certification. Del Percio writes, “(the project) will feature the standard LEED features, will include low-flow plumbing, recycled-content construction materials, preferred parking for hybrid vehicles, and efficient HVAC systems.” Del Percio further states that SJP is responsible for 1.6 million square feet of upcoming sustainable real estate development in the New York City area.

In terms of residential real estate, the greenest builder in town seems to be Bijou Properties, the builders on the Garden Street Lofts at 1425 Garden (on 14^th Street). Detailed information on what makes them green is found on their website at www.gardenstreetlofts.com. Additionally, long –known on the realtor grapevine, the parking garage known as Park on Park will be converted by Bijou into residential space and parking. Bijou is responsible for the just-converted building now housing the New York Sports Club, CVS, and Washington Mutual and the plans for development of the parking garage are forthcoming. Del Percio writes: “It’s going to give way to a 12-story, 180 unit LEED Gold mixed-use condominium complex…the $100 million project, designed by Hoboken’s Dean Marchetto Architects, will offer 30,000 square feet of ground floor retail space, 371 parking spots, and a green roof, among numerous other sustainable design elements

So what are the advantages of green building? What is LEED? And why should buyers be interested? LEED certification has been established and defined by the U.S. Green Building Council (USGBC) and three designations are possible: bronze, silver, and gold. Designations are determined by a point system. Detailed information on the checklist and point system used to evaluate building construction can be found on www.usgbc.org. Sustainability is a cornerstone of green building. On the website for the Office of the Federal Environmental Executive, www.ofee.gov, the 1987 Brundtland Commission Report is quoted: “Sustainable design optimizes resources, restores, and renews them…sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

Green building is meant to optimize sustainability by an extensive list of measures. These measures range from water efficiency in the landscaping and heat island effect roofing (a nifty concept used to reduce microclimate change and that sometimes includes a vegetated roof) to indoor environmental quality that includes low-emitting construction materials and building design that optimizes light and air quality. Aside from the obvious intention to help save the environment one building at a time by using recycled wood and materials such as countertops made of recycled glass (which looks remarkably cool by the way), the idea is to reduce building cost in terms of construction and long-term costs for the upkeep and life of the building, thereby saving condo owners money through efficient light, heat and water usage. And not incidentally, to increase quality of life for inhabitants. Many sealants and building materials emit gases that silently can affect air quality and potentially cause long-term health issues in some people sensitive to them.

The downside of green building is accomplishing LEED certification while meeting local building code standards, long waits and additional cost for recycled materials that are not yet widely available, and creating an interest that the public can embrace. Ultimately, buyers must see the monetary value in buying green, in addition to the “feel good” aspect of buying a condo in a building that is designed to gently use the planet’s resources. Green builders must overcome skepticism in buyers who are already wary of the changing market. Buyers will ask themselves: “If I buy in a green building, will that add to my condo’s value in the long run or is this a passing fad? And will buying green reduce my maintenance charges for the common areas and/or reduce my energy and water bills?”

As a Hoboken realtor, I want the answers to these question too so that I can accurately inform my customers. I am hopeful that green building is here to stay and is as financially smart as it seems to be environmentally savvy. Of course, when our bodies and those of our children are bombarded by environmental poisons, anything that reduces our daily intact of environmental poisons can’t be a bad thing if it legitimately does so, right? And in an age where energy is precious, and increasingly alarmingly expensive, sustainable building and architectural design may well be the wave of the future.

Cobblestone Street Homes

In Hoboken, most houses sell for over 1 million. A house 1.2 million or less is typically one that needs a lot of work...renovations costing anywhere from $200,000 to $500,000 or possibly more. The Willow Terrace houses are the exception. My recent listing, now under contract, was listed at $669,000. These houses share common brick walls with their neighbors, and are 12.5 wide on lots of 50 ft deep, whereas most houses in Hoboken are between 13.5 feet wide to 20 ft wide, on Washington St and west with wider houses on Hudson St. or Castle Point Terrace. Willow Terrace homes are on cobblestone streets with "private" parking. These streets are private, and not maintained by the city, other than basic garbage pick-up and sidewalk cleaning. Residents prefer the cobblestone because it helps prevent flooding (rain water mostly seeps into the ground and the dirt crawl spaces rather than backing up in the Willow Street sewers). The folklore is that originally these homes were for Stevens family workers and had no kitchens or bathrooms. Willow Terrace homes that are partly renovated have the bathroom behind the kitchen on the first floor. More renovated versions of these homes have been expanded on the second and third floors, adding at least one bathroom and one or more decks. If you really want a house at condo prices, Willow Terrace is your best bed in Hoboken.