There’s something energizing about a “squeaky snow” day. This is good because you don’t want to spend much time standing still when it’s this cold. I’ve a typical Westchester Realtor’s Saturday planned, combining activities to support my home buyer and seller clients, homeowner chores, and enjoying the benefits of living here along the Hudson River.

Following my daily review of the Westchester real estate market, I’ll head to my Briarcliff Manor office, stopping en route at the Farmers’ Market just down the street. I’m thrilled that the community market winter schedule has been expanded for 2010!

The first appointment for today is an initial consultation with first-time home buyers. We’ll start with an overview of the home buying process in Westchester County, then go view the house they found on the new Houlihan Lawrence website and tour the surrounding neighborhoods. Finally, back at the office, we’ll review the current real estate market, discuss their needs and hopes in more detail and prepare a follow-up agenda.

Two more appointments are scheduled for the afternoon. Then on the drive home I hope to get some pictures of ice on the Hudson River to share in a future blog. I had intended to finish taking down the Christmas decorations today – but those red bows look so jaunty, I think I’ll let them stay awhile longer. Lastly I’ll spend an hour or so setting up custom market reports to provide my clients with the latest information.

It looks like the local real estate market will be fairly busy in January and February. There is pent-up demand out there, and those who qualify want to take advantage of the home buyer tax credits available. Sellers take note – don’t wait till April to put your house on the market, and do consult with your local Realtor about proper presentation.

Posted By: Liz Pereira

Just a few years ago, bidding wars were commonplace in our red-hot real estate market. Not bidding wars in the sense of a back-and-forth auction, where buyers were asked to top the latest offer until someone quit. Westchester’s more genteel approach was to give the competing buyers a deadline – “tomorrow by 5:00 p.m.” – to submit a sealed envelope with their highest and best offer. Highest in price, best in terms (how much in cash vs. mortgage, closing date, etc.).

Buyers hated this device. Basically, they had to bid blind, with no clue as to what the others might offer. I used to tell my buyers to figure out the most they could afford and the most the house was worth to them, then take the lower of the two numbers and offer that. Houses routinely sold for higher than the asking price, sometimes way higher.

Those days are so far gone, the market is so turned around, that recently I found myself contemplating a reverse bidding war: challenging two competing sellers to counter my buyers’ offer with their lowest and best. Here’s how it happened.

I was working with some high-end buyers who were looking in the Hudson River towns – Dobbs Ferry, Irvington, Tarrytown, Sleepy Hollow, Briarcliff Manor, Croton-on-Hudson. They had exhausted the available options in their price range and decided to just wait for new listings to come on the market. One house really tempted them, but price-wise it was too much of a stretch for them. A few months later, a house was listed that met all their criteria. They looked at it and, despite some minor drawbacks, they fell in love and put in an offer. The sellers countered, and while we were considering our next move, the house they had liked earlier dropped its price very close to the one they were now bidding on. What to do?

The buyers said that they liked the two houses equally well, they would be happy with either one. So it came down to price. They decided to buy whichever had a lower price. Hmm. A reverse bidding war. Give the two sellers until noon tomorrow to come up with the lowest price they would consider to sell their house.

I must confess, on some level the prospect of turning the tables on sellers was delicious. Don’t get me wrong. Nobody beats me as a champion of my seller clients. For at least two years I sold my listings at an average of more than 100% of the asking price. But in this case my clients were the buyers, and I couldn’t help feeling, on behalf of past buyers who’d been forced to jump through the highest-and-best hoop, that revenge would be sweet.

In the end, it wasn’t to be. I insisted that my buyers revisit both houses before launching our strategy (they hadn’t seen the first house for months), and when they did they had a clear preference. They signed contracts (!) by the end of the week. But in this buyer’s market it wouldn’t surprise me to hear that other buyers are pitting one seller against another in a reverse bidding war.

Posted By: Bruce Dollar

Last March I was prompted by a buyer client to analyze the relationship between asking prices and selling prices in two of the communities I cover, Briarcliff Manor and Croton-on-Hudson. A savvy Wall Streeter who followed market trends, this buyer was looking at houses in both places, and he told me flatly that he’d be a fool to pay any more than 75% of the asking price.

Sure enough, he liked a house I showed him and made an offer that took about a third, or almost 35%, off the asking price. When I told him he could not expect the seller to counter such a low-ball bid, he replied that given how the market was trending in Croton, especially for million-dollar-plus houses like this one, and given the history of this house which, although the price had come down from its original asking price, had been on the market for months at the same price, the seller should be happy with his offer.

The seller did not counter his offer.

Lately I’ve had buyers tell me they’ve heard that if they spend more than 10% (or 15% or even 20%) of the asking price for a house in today’s market they are not getting a good deal. This may be true in some parts of the country, but not in Westchester, at least not in my part of it. In fact, my impression has been that houses are still selling at close to the asking price, as long as the price is right. Overpriced houses tend not to sell at all. They have to lower their prices to a point where they are a good buy for the market, and then they sell fairly close to the final asking price.

To see if this impression was correct, I looked at sales figures in two of my primary markets, Briarcliff Manor and Croton-on-Hudson. Briarcliff and Croton are adjacent communities, about the same size in population and housing inventory but different demographics: in 2008, Briarcliff single-family homes sold at a median price of $942,450, while the median selling price of a house in Croton in 2008 was $520,000. I took all of the houses sold in both communities in the last six months and compared their selling prices with their final asking prices. In the period since Sept. 20, 2008, a total of 16 houses were sold in Briarcliff and 17 in Croton. In Briarcliff, the average selling price was 95.53% of the average asking price, while in Croton the selling price averaged 95.11% of the asking price. These numbers are remarkably consistent, both across the price range and across the two communities.

What lessons can we draw from this? For sellers, you need to find the correct price, the one that will attract buyers. Many sellers are reluctant to cut their price “too much,” fearing that buyers will simply low-ball their offers by the same margin they did at the higher price. But these figures suggest that the correct price will yield a selling price that is surprisingly close to asking.

For buyers, you need to adjust your expectations of what you may have to pay for the house of your choice. If a house is well priced, it is reasonable for a seller to expect to sell close to (within 95% of) the asking price. Anyone who expects to pay no more than 90% will probably be disappointed.

So how do you judge, whether you’re a buyer or seller, what the correct price is? This is where your agent comes in. It’s your realtor’s job to know the local market and to advise you when a price is right.

Posted By: Bruce Dollar