How to Handle a Townhouse Bidding War as a Seller in NYC

In this video we’ll talk about how to manage a townhouse sale in NYC if you suspect that your property will attract lots of interest and potentially a bidding war.

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It’s good news if you're watching this video because it means you may very well be looking to sell a townhouse in an area that is pretty hot right now. So, while it might seem, you know, counter-intuitive that selling a hot property is difficult, we'll show you why in this video.

The main reason why it's rather difficult and stressful to sell a hot property is because you run the risk of potentially being overwhelmed with interest that you cannot handle efficiently and you cannot process showings in a reasonable manner and moreover, you also run the risk of potentially being drawn by a particular buyer down towards a transaction which doesn't materialize at which point you've irritated and potentially lost the interest of all the other people who were pursuing your property. So, we're going to give you some specific tips for how to handle a townhouse, a hot town house that you're looking to sell in New York City.

The first tip is to resist the temptation to show anybody the property early. Don't give anybody a head start. Now, it's very common for you know, a pretty motivated buyer's agent or perhaps direct buyer to be in touch with your listing agent and say you know, “Hey, I’m really interested. Can I see it when are you listing it? Can I see it first? Can I see it before you list it? I'll be a quick deal.” Now, all of that sounds really encouraging and you know that's great news but the truth is they're doing that for a strategic reason that if they're able to get ahead of all the other people, they submit that offer quicker then they'll be pulling you down the path of feeling potentially obligated to work with them on a specific pricing that might not actually be the best that the market could have yielded if you consolidated all your showings around the same time.

If you group all the showings together, you're much more likely to get simultaneous expressions of interest all of offers all around the same time and that is the prime condition that results in a bidding war which obviously, will you know hopefully, give you the best outcome in terms of the highest price as well as the, you know, greatest number of potential backup offers for you to consider.

The second tip for managing a hot townhouse when you're selling here in New York City, is to have very early engagements with buyers around the subject of contingencies specifically, the appraisal contingency. If it is a hot market, chances are that a bidding war may potentially catapult your price to a level that while still supported by market forces may potentially be slightly ahead of where pricing was you know, a few months ago. Now, this is a problem for a buyer who's financing because of the fact that every major lender will do an appraisal and you know typically under a standard mortgage contingency. If that appraisal comes in low, it gives that buyer the ability to essentially back out of the deal recoup her/his contract deposit putting you back at square one, in terms of having to, you know, recommence the entire marketing process and find somebody else.

So, the third tip for managing a hot townhouse as a seller is to plant the seed very early on with prospective purchasers that the property is being sold as is. Now, it's customary with the townhouse upon accepted offer to do a home inspection and the home inspection could potentially result in a renegotiation if there's any material discovery that you know somehow is indicative of a major problem that wasn't visible to the naked eye and the buyer may very well ask for a credit which could materially reduce your economics i.e the purchase price for the proposed transaction.
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Save money when buying, selling and renting real estate in New York and Florida with Hauseit (https://hauseit.com). Available in NYC, Long Island, the Hudson Valley and South Florida. Est 2014.

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