Philadelphia Real Estate Blog

So it is settlement day (aka-the day I told you to take off from work) and we are meeting at your new groovy Old City loft, or Rittenhouse Square condominium to do our final walk-through.  I have found condos in Philadelphia left in a variety of stages of transition, from total hell-holes, to gorgeously clean condos with a bottle of Champagne in the refrigerator, and everything in between.

Per the terms of the agreement of sale, the condo should be left in broom-swept clean condition, normal wear and tear accepted. Now, how do we interpret that? I usually tell buyers not to expect that the home has been professionally cleaned, rather just “broom-swept clean, free of debris”. There should be no college fraternity house communal sofa left in the guest bedroom, nor should the seller’s old computer boxes and broken bicycle be left in the storage bin in the basement.

If you notice that the stove hasn’t been cleaned, or the shower stall full of grime, well…uh, know that there is no extra charge for these. The grime transfers with title :). Don’t expect the world from any given seller, just some honesty and good faith. And to all you sellers out there in internet land…no one needs your crap or your garbage. Take it with you….and if you want to donate furniture…call Uhuru at 12th and Spruce Street, who will take donations. And your future buyer is not interested in a closet full of wire clothes hangers either.

So a little forgiveness can go a long way to a happy, smooth day. Don’t expect to be able to eat off the kitchen floor, but garbage and other old belongings need not be present either.

Mark Wade
www.CenterCityCondos.com
Prudential Fox and Roach REALTORS®
530 Walnut St., Suite 260 Philadelphia, PA 19106

I just learned that one change that might affect buyers, is the fact that your mortgage company MAY INDEED pull a credit report on you, a few days before closing.  In addition to looking up your credit when they process your application, they are also pulling credit prior to closing to make sure nothing has substantially changed with your financial position, or you have not gone out and purchased a new car, a boat, applied for a slew of new credit cards, etc.

In almost every transaction involving a Philadelphia condo, there are TWO months “Capital Contribution” due and payable by the buyer at time of settlement. Basically, you have to pay the condo association an amount equal to two months of condo fees (all buyers do). This is just a neat little way for your condo association to stockpile dough. This is not you paying two months up front…this is money that is more like a one-time bill. Not really a bad thing, as everyone who buys into the building must contribute. More of a surprise to most Philly condo buyers than anything else.

And as a courtesy to realtors like myself, who don’t get out often (out of the city, that is…) please pick a title company who will do your title work at one of the realtors offices. At a bare minimum, it should happen in the same city, if not the same county, as the transaction. I truly am not interested in going to Erie, PA to close on a house because your mother’s neighbor’s cousin has a title company in that fine town.  I will bust my hump for you. But I ain’t going to Erie.  Please settle in town. I get the shakes when I have to go to the suburbs. It just isn’t a pretty sight. Thanks.

Mark Wade
www.CenterCityCondos.com
Prudential Fox and Roach REALTORS®
530 Walnut St., Suite 260 Philadelphia, PA 19106

Though I sometimes sit at my Sunday open houses here in Philadelphia, I do so sometimes with a slight effect from being out with my friends from the previous (Saturday) night. I am tired, and sometimes sit in a chair for the entire duration of any given Open House. Thank goodness our Center City Sunday Open House shift only last an hour. I think I might go nuts otherwise.

But there are a few things that brighten my morning, like showing up five minutes early to my (say) Rittenhouse Square condo Open House, and see potential buyers waiting for me. Or be blessed with sellers who have turned on every light, adjusted the thermostat appropriately, and even perhaps lit a candle in order to bring some life into the condo. Nothing kills the “likeability” of your Old City condo like 98 degree heat inside the unit I am about to introduce to perspective buyers. And kitty puke on the kitchen floor…eh, no. Ditto for doggie doo piles on the patio. And for heaven sake…make the bed. Clean the bathtub, and pick your crap up off the floor of the walk-in closet. NO POTENTIAL BUYER GROWS UP WANTING TO INHERIT YOUR LIFESTYLE, should your lifestyle be easily equated to that of say a 19 year old fraternity dude. Dude.

And buyers, this blog entry is aimed at you too. Keep your dog at home, and don’t show up ten minutes AFTER my open house has ended, expecting a 25 minute tour. (Please, that is 🙂 ). And if you are just browsing, and saw the sign out front, give me some time with the “real” buyers who may have come specifically for this home. Your presence is welcome. Your monopolization of my time…perhaps not so much.

So my conclusion is that sellers and buyers need to put on a good show to be taken seriously. And buying a condo in Philadelphia is a serious consideration, and a thought for which one should prepare. Put your best foot forward, and happy buying and selling!

Mark Wade
www.CenterCityCondos.com
Prudential Fox and Roach REALTORS®
530 Walnut St., Suite 260 Philadelphia, PA 19106

Or perhaps I should ask, what is the assessed value, in the eyes of the City? Do these differ from a valuation or BPO (Broker’s Price Opinion)? How would a buyer know how to sort out the difference, or do these numbers really even matter?

(Your New Condo as Seen by You!)

When you buy your Philly condo, and place a mortgage upon the property, the bank is going to send out an appraiser to assess the value of the Rittenhouse Square condo, or the Old City loft you have just put “under agreement”.  I have always believed that an appraisal is a yes or no question….can an appraised value meet the sales price? If you answer is yes (which it does 99.9% of the time, then the property is appraised at sale price. I don’t think any bank expects more of an in-depth analysis of the value, beyond the “does it meet sale price?” value. An appraisal is a not really, in my opinion, a valuation. A valuation is a determination of value. What will the property sell for on the open market? After all, the true measure of a properties worth, is defined by what someone is willing to pay for it.

(Your New Condo as Seen by Your Appraiser!)

Assessed value, a number the city pulls out of a hat, is used to determine your property taxes. I actually don’t know if the city uses the old hat method of calculating tax bills, but the incongruence I see in the tax rates on real property certainly do lend some credibility to the idea.  I try to coach buyers on the variations in all the values that different parties can attach to the same property. The truth is, the property is worth what you are willing to pay for it, depending upon your knowledge, your realtor’s expertise, and market conditions, just to name a few factors.

(Your New Condo as Seen by Your Tax Assessor!)

Mark Wade
www.CenterCityCondos.com
Prudential Fox and Roach REALTORS®
530 Walnut St., Suite 260 Philadelphia, PA 19106

Having watched buyers and sellers in all kinds of real estate markets here in Philadelphia – both a buyer’s market, and a seller’s market, I would like to cough up my two cents on what I see is happening now in the Philadelphia condo market as we start the new year (2008).

Let’s begin with the obvious. Buyers believe that sellers are nuts, and sellers believe that buyers are just plain crazy. And realtors are lunatics. I can see that. Buyers will react to what they believe to be a weakened market in a number of ways. Not only will they tend to “low ball”, but their behavior as far as location and condition are altered as well.

1) Low-ball offers become the norm: No big surprise here. The days of multiple offers on the same property have passed. Not only are there fewer buyers in the market, but the motivation levels of those buyers are not as prevalent.  We just don’t see that wide-eyed frenzy of “Gotta’ have it”. Buyers will often question how long a property has been on the market, and bid accordingly. Sellers should be less offended and less surprised by such behavior.

2) Condition Rule: Buyers become much greedier in their desire for something that shows well, and is in move-in condition. Why should they settle for something that needs work, when possibly they can now move up into something newer that shows really well for what they believe to be the same price? Rittenhouse Square condos, say, that do not feature a strong showing ability may be looked over. There is more product on the market, and a lot more substitutability, so those units that are a bit worn, are going to have to be priced really well to garner an offer.

3) Location becomes more important: I witnessed this firsthand back in the early 1990’s. In a perceptually weakened market, the “lesser” locations will be the first to drop off as far as prices and traffic are concerned. A buyer’s desire to “pioneer” an area will lessen as he or she may believe such a tactic is more risky in a less “demand saturated” market.

Condos in Philadelphia may be perceptually “off”, as far as sales and demand is concerned. Sellers need to be aware of this new view that buyers hold, and act accordingly. Waiting for the multiple offer situation to come knocking on their door might be best invoked by rubbing a lamp. However, what doesn’t require one to “rub a lamp” is the notion that a Philadelphia condo that shows well, and is priced well, will still sell well. Take that to the bank.www.CenterCityCondos.com
Prudential Fox and Roach REALTORS®
530 Walnut St., Suite 260 Philadelphia, PA 19106 

Mark Wade

As a veteran Center City realtor, I am often cornered at parties, and asked, “What is the best buy in the Philadelphia condominium market?” The answer is not always easy, and depending on your priorities, can be varied, and alterable.

Generally, I have always believed the best buy is a good combination of location and condition. The former being strong, and the latter being weak. Buy an ugly Old City loft in a strong location, and make the emotional improvements yourself. Or buy a dated Rittenhouse Square condominium that needs work, and watch your investment skyrocket with a good dose of elbow grease.

I began selling real estate in Philadelphia nineteen years ago, when the market was very depressed. It was not uncommon for sellers to have to bring money to the settlement table in order for them to sell their condos. That is probably why I think it is ultimately important to buy “ugly”. If you read my blog regularly, or listen to my podcasts, I am sure I am beginning to sound like a nag. But take the point. Or at least consider it. Do not allow someone’s dirty condo to interfere with your perception of the true value of that particular Society Hill condo, or Fitler Square condominium. The power of dirt to chase other buyers out the door, and ultimately result in a lower sale price should not be diminished. One of the first articles I wrote for publication on the net was titled, “I hope I sell you a condo that smells like dog pee”. You can pretty much surmise the story by the title.

So the next time you see me at a party, perhaps getting all liquored up, and rambling on and on about Philadelphia real estate, you can be sure some of the ramblings are going to center around buying a crappy Art Museum area loft, or a smelly Society Hill condo.

And I mean it lovingly. Nothing spells value like the aroma of someone else’s dog pee.

Mark Wade
www.CenterCityCondos.com
Prudential Fox and Roach REALTORS®
530 Walnut St., Suite 260 Philadelphia, PA 19106 

It seems “The Donald” is coming to town, and bringing a big band of trumpet blowers with him. I am hearing all kinds of noise about his plans on adding to our waterfront. Trump Tower Philadelphia is his plan to add 45 stories, and 225 residences to our fair city. To which I say, “Have at it”.

I have seen the plans, and been to the sales presentation. Now I am rarely impressed with developers. Especially those from New York, who along with their New York city big- brained consultants tell us what we need, and how we need it. The principle they never seem to get is the “When in Rome” theory of life. And let me tell you, this ain’t Rome. This is Philadelphia. Not all issues, factors, desires, and sales trends translate across the wide expanse of New Jersey (from NYC to Philly).

But I gotta’ say…..I think someone at the Trump organization must have correctly read some tea leafs or perhaps they looked into a crystal ball on the Jersey turnpike on their way down here from NYC. From what I see, this building is not only gorgeous, but appropriately sized (in terms of unit mix, size, and number of units in total), and the amenity package seems to be spot on for what this town really needs to make the waterfront area a really desirable destination for residency. The new Trump Tower Philadelphia, looks to be its own “Private Idaho”, in terms of the amenities and the recreational facilities onboard. I can see the Jersey shore becoming less a draw for those who might live in the new Trump Tower Philadelphia….

What do you think?  Leave me a comment and give me your thoughts or send me an email at Mark@CenterCity.com.  www.CenterCityCondos.com
Prudential Fox and Roach REALTORS®
530 Walnut St., Suite 260 Philadelphia, PA 19106 

Mark Wade