When Are You Going to Fix That? 

Dec 03, 2007

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Samantha Kleier Forbes Discusses What Not to Say at a Co-Op Board Meeting


Getting the offer accepted is, strange as it sounds, often the easy part. It’s passing muster with the co-op board that’s tough. Assembling a killer package is key, of course (stellar references, wad of cash in the bank). Then comes the interview—and by this point, it’s your game to lose. “Ninety-five percent of the work has been done. The 5 percent is up to you, and that’s a very important 5 percent,” says Prudential Douglas Elliman broker Jacky Teplitzky. Most rules are standard—arrive early, dress conservatively—but brokers say some strategies appear counterintuitive. Take name-dropping. Though it may seem advantageous to mention friends in the building, agent Alison Rogers, author of Diary of a Real Estate Rookie, says skip it, unless you’re certain they’re adored by their neighbors. “You may score points with some, but annoy others who may not like them,” she says. In fact, steer clear of talking about anything specific about the building in general (the new fitness room or the chatty doorman). Those are what Corcoran’s Deanna Kory calls “hot points.” The gym could have come at a massive and controversial hike in maintenance; that doorman may be on his way out. “Somebody on the board may hate [them],” she explains—and your innocent enthusiasm will leave a bad taste in their mouths. Samantha Kleier Forbes of Gumley Haft Kleier once had a buyer, hoping to look interested in the future of the co-op, ask if the lobby was scheduled to be renovated. Unfortunately for him, the lobby had just been done over. “The board meeting is never the time to ask these questions,” she says.

Served on the board of your old building? Resist touting your accomplishments. “That’s a big N-O!” says Teplitzky. No one likes a braggart, for starters, and you may unnerve board members who like things the way they are. And though it may seem smart to dress to the hilt to gain entry to a chic co-op, Bellmarc’s Cayle White recommends leaving the diamonds and Birkin bag at home. “You don’t want to look like you’re trying to look rich. It’s very ostentatious and gauche,” she says. “Your financial information speaks for itself.” And, says Kleier Forbes, “you don’t want to look like someone who’ll steal someone else’s husband. No one’s ever been turned down for looking boring.”


Dec 02, 2007

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Michele and Sabrina Kleier Discuss When to Stick to Your Price


BRUCE EPSTEIN has spent the last four months looking for co-ops on the Upper West Side, and he thought he had a pretty good grip on how much they were going for. When he decided to offer slightly less than the $1.15 million asking price for a two-bedroom in a walk-up building that required renovations, he thought he was being reasonable. But the seller said he shouldn’t even bother to make an offer if he wouldn’t pay the asking price.

So he offered the seller of a one-bedroom apartment nearby the asking price of $699,000, and then raised it to $745,000, even though the unit had no proper stove and only a half-size refrigerator. But the seller turned him down for a buyer paying $750,000 in cash.

After experiencing these and other setbacks in the Manhattan real estate market, Mr. Epstein has told his broker, Catherine Holmes of Barak Realty, that he might simply rent after he closes in February on the sale of his $1.1 million town house in Park Slope.

He said he would buy in Manhattan when sellers cut their prices. “Some of the sellers have to be a little bit more realistic,” he said. “I would be happy with any percentage decrease.”

Mr. Epstein might have a long wait. No one really knows where the market is headed.

Manhattan is apparently full of sellers who think foreign buyers, or bankers who might still get big bonuses, are ready to pay full price for their apartments. These sellers do have recent history on their side. For the first three quarters of this year, Manhattan apartments over all continued to sell at record prices.

Now, brokers say, they see a stalemate developing between buyers and sellers in Manhattan, especially for apartments in the $1 million to $5 million range. Sales in this range made up more than half of the total dollar volume in the market in the third quarter of this year, according to data tracked by Radar Logic.

Brokers say it is the buyers in this sector of the market who are now growing concerned about the impact of the weak national housing market and the effect that Wall Street losses might have on Manhattan apartment prices. So they’re lowering their bidding or stopping their searches altogether until they have more confidence in the market.

Brokers are finding themselves caught in the middle.

“It’s very difficult to get a meeting of the minds,” said Douglas Heddings, a broker at Prudential Douglas Elliman who compares the latest negotiations between buyers and sellers with couples therapy.

Mr. Heddings said he hadn’t had such a hard time persuading both sides to reach agreements since the real estate downturn of the early 1990s. He finds some sellers aren’t cutting prices even for apartments that have been on the market for several months. At the same time, buyers are digging in their heels: three of his five Wall Street clients stopped searching for apartments that cost $2.5 million to $4 million because they believe prices will drop in 2008.

Some buyers have reason to be cautious. Shai Shustik, president of Manhattan Residential, a brokerage with many clients in the financial industry, said that since the end of August, his buyers had cut their budgets by 10 percent because of concerns about their bonuses. One lost his job at a hedge fund hours before he was due to sign a contract for a $1 million two-bedroom co-op on the Upper East Side.

“He was literally ready to meet the attorney that afternoon to return the checks,” Mr. Shustik said. “But he never did. He got laid off that morning.”

Jason Loeb, 37, an equity analyst for a money management firm, has received a half-dozen e-mail messages from friends who have lost jobs because of downsizing at major banks. Those “I hope I land on my feet” notes, coupled with weak performance in industries he tracks like trucking and retail, convinced him that Manhattan real estate prices eventually have to decline.

He is renting in Jersey City and waiting to buy a two-bedroom in the West Village.

“You can see the writing on the wall with layoffs and bonuses,” Mr. Loeb said. “I’m looking for a 15 percent drop to be comfortable.”

Mr. Loeb’s lawyer, Adam Leitman Bailey, said he had received at least one call a day from Wall Street workers with annual incomes of $600,000 to $5 million saying they think prices may drop next year. Nearly all of them have decided to hold off on buying Manhattan apartments.

“They’re not going to buy until they have job safety or the salary or bonus they think they deserve,” Mr. Bailey said.

Even some buyers who have strong reasons to move are holding off.

Jeffrey Davis, a lodging industry consultant, and his wife, Betty Wang, who works in fashion, have been trying to find an apartment of at least 1,200 square feet before their first child is born this month. For the past year, they have worked with Nora Ariffin, a broker at Halstead Property, to find a two-bedroom condo south of 30th Street for $1.7 million. The only amenities they required were a doorman and an elevator.

The couple visited 30 apartments in Chelsea, the Flatiron District and the Gramercy Park area, but the bids they made on five different apartments were rejected. Mr. Davis said he thought prices were $50,000 to $100,000 too high.

The couple are staying in their one-bedroom rental for now. “I have plenty of space for an infant for at least a couple of months,” he said.

Some buyers are evaluating the Manhattan market with long-range goals centered elsewhere.

Arthur and Lisa Brodsky have spent the last year looking for a two-bedroom apartment on the Upper East Side or Upper West Side with their agent, Jason Haber of Prudential Douglas Elliman, and a maximum budget of $1.2 million. Mr. Brodsky, 30, who works in private equity, and Ms. Brodsky, 30, who works in marketing for magazines, want to buy something large enough to accommodate the family they hope to start within the next couple of years.

They also want to make sure their apartment will appreciate 20 to 25 percent during that time so they could cover their costs of buying and selling if they decide to move to the suburbs as their children grow older. They see their friends in New Jersey buying homes at big discounts from sellers who bought at the peak of the market. Rather than overpay, the Brodskys are staying in their one-bedroom rental and watching where prices head.

But for every bearish buyer there remains a seller brimming with confidence.

Nearly three months ago, Cecilia Ruiseco put her two-bedroom, two-bath condo at 408 East 79th Street on the market for $2.395 million. Three dozen buyers have visited, but she has received no offers. Her broker, Sabrina Kleier of Gumley Haft Kleier, has encouraged her to stick with her price, because foreign buyers may be in town to shop for real estate over the holidays.

“Buying real estate in the U.S. is going to be the fashion for the next two years,” Ms. Ruiseco said, while leading a reporter through her seventh-floor apartment decorated with Colombian and American art. “The foreigners are going to buy everything.”

Sellers have plenty of inspiration from Manhattan’s highest-priced sales. Earlier this month, Michele Kleier of Gumley Haft Kleier put a nine-room co-op up for sale in the East 70s on Park Avenue for $8.45 million. The seller told her that she didn’t want to accept less than the asking price. Within two weeks, the seller got her wish.

Ms. Kleier said the buyers paid more because they liked the renovations that had been made on the apartment and the views of the Empire State Building.

“If you have something special and you’re not in a rush, then don’t worry about cutting the price,” she said. “These people bought it on the spot.”

If there is room to negotiate, it is often in neighborhoods in the northern reaches of Manhattan.

Three months ago, Albert Haddad, 86, and his brother, George Haddad, 92, put their sixth-floor two-bedroom apartment at 880 West 181st Street on the market. They listed it for $599,000, intending to use the proceeds to retire and move back to Lebanon.

Their agent, Bill Vilkelis of Barak Realty, suggested they list a lower price from the start because he estimated the apartment needs about $75,000 to $100,000 in renovations. But the brothers pushed for a higher price because an apartment across the street had sold for $608,000 in a building where the maintenance fees are nearly double.

They’re hoping that newlyweds or a couple with a baby will snap up the apartment because it is one of the few two-bedrooms available in Washington Heights.

Several weeks ago, Mr. Vilkelis persuaded the brothers to cut the price to $575,000 because, he explained, the market there had slowed more sharply than in other parts of Manhattan. He encouraged the brothers to be more flexible in negotiating.

“It hasn’t slowed as much as out somewhere in Queens and the outer reaches of Brooklyn,” Mr. Vilkelis said. “It’s slowed compared to the Upper West Side and downtown.”

But the brothers have their limits.

“We are not going to give in to a low price less than what we think it is worth,” said George Haddad, sipping a steaming cup of tea in an apartment crammed with the books they have accumulated since they moved there in 1963.

Not every deal, however, ends in a stalemate.

Meaghan Nelson and Nicolas Onofrey spent the last six months looking for a prewar two-bedroom co-op on the Upper West Side for about $1.1 million.

Ms. Nelson, who works for a health-care market research company, and Mr. Onofrey, who manages the information technology group for a Midtown hedge fund, looked at about 140 apartments with their broker, Jessica Cohen of Prudential Douglas Elliman. They bid on four properties and were turned down.

So they increased their budget, and found a $1.4 million two-bedroom co-op at 514 West End Avenue, whose sellers had grown weary after three contracts with buyers had fallen through. Both sides signed the contract within 24 hours.

Ms. Nelson and Mr. Onofrey are scheduled to close on the apartment on Jan. 15. They’re relieved to have finally found a house where they can start a family.

“We’re in it for the long haul,” Ms. Nelson said.


Hot Property Book

The stars of HGTV's “Selling New York” let fans step inside the high-profile world of Manhattan real estate in a wild and one-of-a-kind novel of stormy egos, sumptuous homes, and staggering fame and fortune. Written by Michele, Samantha & Sabrina Kleier.