When Selling a Co-op or Condo, Make Sure the Price Is Right

For sellers of co-op and condo apartments in New York City, Forbes offers one unbending rule: Make sure the price is right.

Crunching the numbers reveals a clear pattern: price it right, and the market rewards you with a quick sale and minimal discount. Price it wrong, and you could be in for a long, costly wait. But what exactly does it mean to price a property “right” or “wrong?”

For this analysis, we define “right” as 60 days or fewer on the market, and “wrong” as 120-plus days on the market. Properties taking between 61 and 119 days to find a buyer fall into a middle ground, affected by their general condition, and evolving market conditions.

After analyzing thousands of sales in Manhattan over several years, the results are clear: properties priced right from the start spent an average of just 31 days on the market and saw only a 1.9% discount from the original asking price. Compare this to overpriced listings, where sellers saw exponentially longer wait times and penalizing discounts.

Sellers fear pricing too close to market value means leaving money on the table. After all, if you don’t ask for more, how can you possibly get more? The logic sounds airtight until the market pokes holes in it. The fact is, most buyers are experts on prices. After seeing a handful of properties, they know what they should get for their budget. So, if your price is aspirationally high, you’re attracting the wrong set of buyers. For example, if your home is worth $1.75 million and you price it at $2 million, the people coming in to see it will have a budget of at least $2 million and an excellent idea of what they can get for their money. They will instantly know your home doesn’t have what they want, and the problem is that what they want is things you can’t change: location, size, light, etc.

Buyers generally lose interest in properties that have languished, assuming they’re above their budget or something must be wrong. Worse, once a listing goes stale, sellers tend to chase the market down by making successive price cuts, which rarely regain the attention of serious buyers. It’s the real estate equivalent of trying to fill a leaky bucket.

Not surprisingly, these trends hold true across both condos and co-ops, which make up the majority of Manhattan’s housing stock. Whether it’s a pre-war co-op on Park Avenue or a new condo in Tribeca, buyers are acutely aware of market conditions, and listings that stray too far from those conditions don’t stand a chance.

The market has spoken. Sellers who set their asking price closer to the expected market value are rewarded with a quick sale and minimal discount. Overpricing, by contrast, extends the time on the market, forces multiple price cuts, and results in a much larger discount than would have otherwise been necessary.