Amy Zimmer

By Amy Zimmer on October 10, 2013 7:14am | Updated on October 10, 2013 7:14am

@the_zim

Price Per Square Foot Might Not be the Best Gauge for Value, Experts Say
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Price Per Square Foot Might Not be the Best Gauge for Value, Experts Say

MANHATTAN — Take a tape measure on your next open house visit.

Though popular real estate websites such as Trulia, Zillow and StreetEasy often include an apartment’s price per square foot, many brokers warn that the art of calculation is imprecise at best.

Some listings might use closets, hallways — inside or outside the unit — and even elevator shafts in their measurements. Others might just include usable space.

Then there are questions about how to include terraces or outdoor areas.

There are no rules that dictate how to measure square footage, experts told DNAinfo New York. Because of that, some brokers discourage buyers from relying on the price-per-square-foot figure to gauge whether they’re getting a good deal.

“Buyers and sellers are always asking about per square foot,” said Dan Bamberger, of CitiHabitats. “It’s the most common way people try to make a justified analysis of how much they should be paying for an apartment.”

“I hate to put it like this, but it’s really more trickery than anything else.”

Usually when an apartment is listed, brokers hire someone with a tape measure — rarely a licensed architect — to create a floor plan, explained Bamberger, who recently wrote about the murkiness of square feet in a newsletter he sends to clients.

For his piece, he randomly selected four Greenwich Village apartments currently on the market and found that the floor plan, on average, was nearly 44 percent smaller than the listed square footage.

Bamberger also found discrepancies of nearly 12 percent in square footage between the same unit listed at two different times or similar apartments on different floors of the same building. Yet in many cases, buyers would pay a premium based on price per square foot, he said.

There are few references for homebuyers to check apartments’ square feet. Co-ops — which represent three-quarters of Manhattan’s housing stock — have no public record, and measurements for condos are included in their offering plans, explained Jonathan Miller, president of the Miller Samuel appraisal firm. 

Jackson Heights History 2
Many real estate experts say that calculating square feet of apartments is an inexact science. There’s no public rec…

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Queens Borough Public Library/Images of America: Jackson Heights

“If you put two licensed architects in a room, you would not get identical measurements,” he said. “You would get a close measurement, but there isn’t a level of precision available.”

Miller said measurements in listings tend to be between 5 and 10 percent higher than the actual size.

“A 2,000-square-foot apartment might be closer to 1,800,” Miller said. “That doesn’t mean that apartment in that building sold for 10 percent more than it was worth.

“I think there’s an expectation of precision that doesn’t exist. But it’s not like [the space] was hidden from you when you bought. It’s just another rating for the apartment.”

A lot of brokerage firms don’t include square footage in their listings or are cautious about the numbers being approximate, because they’re worried about being sued, he said.

Case in point: David Wilkenfeld, founder of PromGirl.com, a major formal dress e-tailer, agreed to pay $13 million for a penthouse at 200 Chambers St. in TriBeCa that was listed at 4,700 square feet.

But only after he agreed to the deal, he learned that the condo’s offering plan listed the unit as having 4,548 square feet, according to a lawsuit he filed against the broker in March, essentially seeking a $2.08 million refund based on the smaller size.

The lawsuit claimed the 2012 sale of the condo was “hurried” by email during the “traumatic period of Hurricane Sandy and its aftermath in New York City.” The case was dismissed in April.

Especially in today’s market, with its lack of inventory, using such questionable numbers to base home-buying decisions may not make for the most solid foundation, the experts agreed.

When he works with sellers, Bamberger tries not to disclose the square footage since it could present issues or disputes down the road, he said.

When he works with buyers he encourages them to assess the apartment on its merits rather than on the listed square footage.

“You have to make a subjective opinion on what an apartment is worth,” Bamberger said.

http://www.dnainfo.com/new-york/20131010/tribeca/price-per-square-foot-often-used-trick-homebuyers-experts-say

Q3 2013 Brooklyn Residential Sales Market Report

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The Q3 2013 Brooklyn Residential Sales Market Report is now available.  This report provides a comprehensive overview of current sales market conditions and tracks trends market wide and by neighborhood. 

Intense buyer demand for housing drove pricing trends as it was met with limited available properties; the result was rapid absorption and price increases across the board.
A few report highlights:
·         Market-wide closed sales totaled 1,146, a 9% increase year over year and a 16% increase compared to last quarter.
·         The market-wide average price per square foot rose to $693 this quarter, a 9% increase year-over-year, while the average sale price of $662,000 increased 8% year-over-year.
·         Prices for townhomes displayed year-over-year improvement, particularly the two-to-four family townhouses market, where double-digit median sales price increases were recorded throughout the borough.
Full report is available here

Hurdles for Condo Buyers

The New York Times
By LISA PREVOST
Published: October 3, 2013

In New York, buyers intent on getting a co-op know to brace themselves for the notoriously invasive approval process. But increasingly, condominium buyers are also being asked to fill out lengthy applications and provide detailed financial information to buildings’ governing boards.

Although condos don’t have the same right as co-ops to reject buyers at will, they do have a right of first refusal. This means that on any pending sale, the condo association has the right to step in, through its board, and match the offer.

In allowing the condo to be sold to an outside buyer, the board issues a waiver of its right of refusal. Before doing so, however, it may at this point in the process demand information about the buyer, including financial statements, employment history, personal references and other details.

In reality, although it is intended to give condo associations some control over who lives in their building, the right of first refusal is very rarely exercised, said Patricia Kantor, a real estate lawyer in Manhattan. Most condo associations don’t have the money to buy an apartment quickly. And bylaws typically require that such a purchase be approved by a majority of unit owners, which can be time-consuming. “There’s a very limited time for the board to act in response to an offer — 15 to 30 days, 45 at the most,” Ms. Kantor said.

What’s more, many condo bylaws limit a board’s ability to get financing, or may require a unit owner vote to do so, said Adam Leitman Bailey, a lawyer who represents condos in New York. Though he has helped condos obtain loans, financing is difficult because usually the only collateral for a loan is the common charge, he said. 

Still, even condos without the means to act on a right of refusal may use their waiver-granting power as leverage. “The right of first refusal is being used more frequently and aggressively than ever before in order to give the boards the ability to have more control over who is living in the building,” said Stuart M. Saft, a lawyer whose firm represents about 50 condos in Manhattan.

Mr. Saft says he has used the process to require buyers with “shaky” finances either to find a guarantor or put several months’ common charges in escrow.

Mr. Bailey says he wields the right of refusal “as a weapon” to ward off potentially troublesome buyers. “If they don’t want to provide the tax returns and fill out the questionnaires and give the references,” he said, “then they’re not getting the waiver of right of first refusal. I need to protect the building before they enter it.”

Mr. Bailey says he has also started asking buyers to sign riders in which they agree to terms that may not be in the condo bylaws, like smoking or pet prohibitions.

He has no problem holding up a waiver if a buyer refuses to comply. Could a buyer sue him for damages as a result of a lost interest rate? Possibly, Mr. Bailey says, but the process would be so lengthy that it would hardly be worth it. “It’s very rare that we get pushback,” he said.

In the rare instances when condos do buy apartments, it’s often because “the apartment is just being dumped and the sale price is going to have an adverse impact on the comps,” Mr. Saft said, referring to comparable sales. “This frequently happens in estate sales, when the family and the executor don’t want to waste a lot of time fighting, so they just take the first offer that comes along.”

Or the board may simply not like the buyer. Mr. Saft recalls one instance, in a building with two units per floor, in which an owner objected to an applicant for the unit next to his, because he feared the person would be too noisy. The owner asked the board to exercise its right, which it did, and he bought the apartment himself.

A version of this article appears in print on October 6, 2013, on page RE8 of the New York edition with the headline: Hurdles for Condo Buyers.

http://www.nytimes.com/2013/10/06/realestate/hurdles-for-condo-buyers.html?ref=realestate&_r=0