We sold a one-bedroom unit with a dining area for $1,099,000 a few weeks ago. I thought it worth telling you the story of how we got to that price.

We had a tenant in place for a few months, which made showing difficult. That might be a writeup for another month, to show you the risks of putting a tenant into your property. I think we will certainly do that!

Properties in the building had seen bidding wars in 2021 that pushed prices in many cases up to $1.3mm! Those were more renovated units, so keep that in mind…

For now, I’m not going to put you to sleep with a story about a deal that died a few weeks into due diligence, losing valuable time just as the mortgage rates were rising. That deal was at $1.25mm…

I’m also not going to bore you with the impacts of mortgage rates. You can surmise that it would put downward pressure on your sale price. Similar units sold in 2021 and early 2022 benefited from lower rates, and we probably saw a 8-10% dip due to that.

The end of 2022 was particularly quiet, and we were considering staging the property, lowering the price, or a combination of both tactics. We decided to wait until after the holidays, to see if we would get a bump in interest from buyers.

The $999,000 Pricing Strategy

We had been priced at $1,150,000 and were not getting interest. We had a decision- to drop the price to $1.1mm, and then hope and pray it was enough… or to take a different tack.

We instead discussed a price drop to $999,000, because at that level, buyers could avoid paying a 1% “mansion tax” imposed by New York City. It’s a psychological barrier that buyers prefer not to cross, even if in this case they know that they would likely not be staying below it.

We chose to move the price to $999,000, knowing full well we would have a ton of interest. The sellers had made peace with selling at that level, but trusted us to manage a boost in traffic- and a bidding war.

What Happened?

Indeed, the phone started to ring and inbox filled up for me and my collegue Manny immediately. Within a week, we had an all-cash offer at $999,000 and other people circling. Then, we had a buyer come in with an all-cash, $1,099,000 offer that the sellers were much happier about. That’s what we pursued, and ultimately was the clsoing price.

The Benefits of A Major Price Drop

The price drop quickly brought buyers in, proving both the liquidity of this market- and the price sensitivity of it, too. Our sellers were happy. The buyers were happy. And we were thrilled that we could finally show this as Sold & Closed in our system. It’s been a challenge to navigate this market in pockets- and pricing leads the list of challenges.

If you want to learn more, be in touch! -scott