a reader writes / how to keep on top of buying opportunities in a specific building

great question
I had an off-line email dialogue with a reader of this blog the other day, who really wants to be able to buy in one particular building, and who asked this question.

I like the building,I saw a great apartment there a couple of years ago,I wish I had bought, but now I’m going to start looking again. What is the best way to get a really EARLY indicator when one comes up on the market in this building? … Is there one particular realtor or a coop board member or someone I should stay in touch with?

short answer
I promised to amplify on this blog, but my quick response was:

The short answer is that *if* (1) you really are patient, (2) you really want to live in one specific building, (3) you really are familiar with values in the building, and (4) you really are prepared to pay a fair price (as opposed to looking for a ‘deal’), the best thing to do is probably to call and/or write to each owner of a unit you might be interested in.
Anything else you could do probably won’t give you any market advantage as opposed to waiting for a listing in that building to hit the web (Street Easy, NY Times, etc).

why the “really’s”?
The numbered conditions in my answer are really important if someone really wants to live in a specific building and wants the earliest opportunity to do so.

patience, Prudence, patience (and preparation)
This reader’s building-of-interest is relatively large for a loft building and units of the preferred size have come to market at least two or three times a year for the last several years, so in this case it may be more of matter of preparation than patience. But the right unit for this reader is not now offered for sale.

So get all your ducks in a row – especially about your ability to qualify for a mortgage of the appropriate amount – so that when The Right One is available, you can act immediately.

gotta have it (really)
Seems simple, but you must be 100% certain that you want this building if you are (a) going to take the steps needed to maximize your chances and (b) be able to jump ASAP when necessary. So you should truly and realistically consider all the possible alternatives, by neighborhood, by price range, by services.

You don’t want to go down this path and actually have a shot at The Right One, and then have second thoughts about how ‘right’ it is.

research, research, research
If you want to be in a position to jump at The Right One, you must know what the values are in the building so you can be confident that The Right One should be available at The Right Price. You should also know which units have the right floor plan or exposure for you.

If you love a building so much that you will bid no the next one in the “X” line that comes to market, you better be prepared to pay $1.2mm if that is where past sales indicate the current value would be. If you have $1.2mm taste but a $900k budget, drop the dream if you can’t print some more money.

fair price, no chiseling
The implication in the question (as we’ll get to below) is that he reader wants to buy a unit before it comes to the general market if possible – or at least to buy The Right One as quickly as possible after it becomes available. That is not the time to make a low-ball offer.

In the best case, the reader will have a head start on the rest of the market and will be able to strike a deal quickly. You simply can’t be looking for a ‘bargain’ in this scenario. The reader should be prepared at any given point to make a fair offer to a unit owner based no past sales in the building and the then-current market (subject only to adjustments for the condition of the unit) and to be able to demonstrate to the owner why that offer is fair.

agent might not hurt
In this specific building (as with many) there are several agents who have sold more than one unit in the last few years, but no one agent who dominates the building sales. In buildings in which one or two agents get most of the listings, there can be an advantage of reaching out to that agent in advance, but it comes with a potential disadvantage.

The advantage is if the agent has good connections with unit owners and can encourage the owner of The Right One to sell if that owner has been considering it. The potential disadvantage is that the agent will (almost certainly) want to be the seller’s agent in that setting (so, will owe full fiduciary duties to the seller, not the buyer) or will act as a dual agent (being a fiduciary to neither side).

That can get tricky, and either scenario removes the agent’s ability to work for the buyer to the best of her/his ability. Depending on how well the buyer knows the values, this may or may not be significant to that buyer.

board member can’t hurt, probably
Making contact with a member of the board of the building is almost always a good idea, but very hard to do unless you have a personal connection to a shareholder or condo owner in the building (otherwise, they will ignore you, most likely).

A board member who knows you are a potential buyer might be able to communicate that to relevant owners, but that is a bit of a crap shoot. But having a relationship with a board member can be a wonderful resource about the building.

why not wait?
It might make sense for the buyer to simply monitor the building (for example, through NY Times.com or Street Easy) and be prepared to jump when necessary, rather than reaching out to an agent or board member.

In many cases, this is sensible, as many sellers want the benefit of some marketing to be confident they are getting a fair price, so they will be unwilling to take the short cut of a direct deal away from the market.

with luck, you can make it happen
But for the buyer who really wants this unit in this building at the earliest possible moment (without full market competition, if possible), reaching out to all the relevant unit owners just might work.

On your own, a buyer is not (I don’t think) precluded by the Do Not call lists the way an agent would be, so the buyer could call the owners directly and explore the possibility of the owner selling in the near term. (Be careful what you say here!)

Alternatively, an agent representing you as buyer could make any calls permitted under the DNC rules and write letters to all the relevant owners.

creating a ‘seller’
While you might think that anyone who would sell will put their loft on the market, the fact is that some loft owners have sold only when they knew a particular buyer was interested (and fair). Sometimes, in other words, you can convert someone to being a seller.

Remember the importance of patience? If you are trying to convert an owner-with-no-plans-to-sell into a Seller, it helps if you can be patient, as the owner-turned-Seller will ask “but where am I going to go?”. So you will have an advantage if you can give that owner time to make the next move. In fact, this flexibility can be a serious benefit to persuade an owner not to put it on the market generally, but to strike a fair deal with a patient buyer.

This extended discussion probably raises more questions. Feel free to ask away….

THX for the inspiration for the post Reader D!

© Sandy Mattingly 2007

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