Issue 4, November 2006: The Right Questions to Ask

Ten Questions to Help You to Make an Important Decision

We’ve been asking the wrong questions. When it comes to the residential real estate market everyone wants to know whether prices will continue to go up, or will they drop? That’s not the real question.

The real question for prospective buyers and sellers should be is: Does it make sense for me to move?

If, after reviewing your needs, finances and lifestyle, the answer is yes, you should discuss the market with a broker and see what is available in your price range, or how much you can expect for your apartment. It seems so basic. Isn’t that how most companies approach things and how we have approached many major decisions in life? Normally we look at our needs and desires, not someone’s projections to make a decision. Somehow our rationale has become skewed.

Analyzing the market and trying to determine what will happen is great if you are buying stocks, where the sole purpose is to make money. It doesn’t work that way in real estate. As I have said in the past, you are buying a home where you will be comfortable living; historically, that purchase has also been a good long-term investment.

This does not mean that people should charge out and immediately pay the asking price. That’s foolhardy. When the decision is made, you should seek out a quality broker who is not after a quick sale, but looks to represent your best interests. It’s a broker in for the long-haul, not an order-taker who came into the market at robust times and will desert it when leaner times require more professionalism.

In making the decision to move, here are some questions to ask. This list is not all inclusive, and all items won’t pertain to everyone, but it might help you in your thinking process.

  1. Are you comfortable where you are currently living?
  2. Do you need more room?
  3. Are you advancing in your career and need a residence reflecting that?
  4. Do you need a more family-oriented neighborhood close to parks and good schools?
  5. Are you eager to lock-in a low mortgage rate?
  6. Is your income increasing sufficiently to take on a larger mortgage?
  7. Do you want to live in a building with more amenities, such as a health club and concierge?
  8. Do you want to live in a condominium and not be restricted by co-op rules of admittance and subleasing?
  9. Do you want to rent or buy?
  10. Is your neighborhood no longer convenient; have you outgrown it?

Those contemplating selling should go through the same process, but with a different focus. The first question should be why you want to sell. Is it to cash out and move into a less expensive home? Is it because you are an empty nester and need less space? Is it because of a downgrade in economic status? Do you want to leave the city?

As with buyers, sellers should make a decision based on their needs, and then if the decision is made to move, they should work with a broker to get it done.

Again, a seller’s decision should be based on needs, and not market reports and media speculation. Some facts to consider about the market are that the population in New York City is at all-time high and Manhattan, in particular, is attractive to many who want to stay here and raise families and to young professionals who are moving here from throughout the country to pursue their careers.

Supply has increased and buyers with more options are taking longer to make a decision. But, sellers need to remember that apartments in good condition in quality buildings that are priced realistically are still in demand. This is where a quality broker comes into play in setting the price and also in “staging” the property so it shows well. It might take a bit longer for a sale these days, but the apartment will sell.

Sellers, particularly those considering moving out of the city, also should be aware that the New York market is holding up very well. The boom years we recently experienced have ended and we are now in a normal phase with moderate increases in prices. This compares to many areas of the country where prices are falling. The spread between a home in New York and in such states as Florida or California is increasing and this is a good time to sell in New York at a solid price and buy in those areas at bargain prices.

Is this the right time to buy or sell? Only you can answer that question. After you do, and if the answer is yes, please call me.