Philadelphia Real Estate Blog

     I have been selling real estate in exclusively in downtown Philadelphia for twenty-three years. I have done some stupid things in my career, and I have witnessed many buyers and sellers making equally stupid moves.  I often see buyers and sellers either pinching a dime for a dollar, or just doing some absurd moves that are much more trouble than the expected payoff. And I am sure this is not limited to just Center City buyers…I have no doubt the scenarios play out in every real estate community:
Scenario 1:  Having the Last Word
Seller asks $499k for a condo
Buyer and Seller go back and forth, and after a few days, buyer say $480,000 is my
“Highest and Best” offer for this parcel. And then seller comes back and says $480,001.
Really? You really want to be a douche bag and say that? You are pissing the buyer off,
and it will probably  cost you much much more in terms of anxiety, anguish, and animosity within
the transaction as you are locked into a legally binding contract with this buyer for say the next 60-90 days. Perhaps you should just zip your lip and take the freakin’ $480k instead of having to have the last word. Don’t forget, buyers still have to perform a home inspection.
Scenario 2: Can’t See the Forest For the Trees
Seller asks $499k for a condo
This property is a bank-owned sty that should be selling for $800k if it weren’t so dirty, missing
all the appliances, and listed with Susy Bag O’ Donuts out of Erie, Pa. (it happens…bank foreclosures are often listed by those with no connection to the area). And as a buyer, you get the Big-Brain idea to come in at $400k…because after all, the market is slow, weak, and uncertain.  OK….you are an idiot. If you can’t recognize such an overtly strong bargain, and
see that the huge upside is the fact that the condo is grossly underpriced at $499k….then maybe
you need to do a little more homework on prices and values here in Center City.
Scenario 3: Why Aren’t you Using a Magic Wand?
Sellers asks $499k for a condo
As a buyer, you top out at $480,000 and the seller will still not accept your offer. And recent “comps” suggest the seller is correct as no other unit in the building has sold for under $500k.
You then turn to your Realtor and complain that you can’t get the property for $480k. And you are relentless. Even in the face of the facts. But you persist. You dump your Realtor because he or she refuses to wave their magic wand and make this deal happen. You then drive down the road, and see your Realtor Singing and Dancing in the middle of the intersection of Broad and Walnut.
No one likes a whiner. Not even in this “slow, weak, and uncertain” market place.
     There are bargains to be had and deals to be made. Opportunity exists in all market conditions, and the current state of affairs in Center City- which has weathered the overall real estate storm fairly well- should indeed be taken into account when negotiating the purchase or sale of any parcel in Philadelphia. But knowing when you have crossed the line and driven right into
Crazy Town Pa. might be helpful when finding the right piece of Center City real estate. And help
you negotiate the best possible, realistic terms.  Mark Wade CenterCityCondos.com

I welcome feedback!

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