Your Offer Stands! Until It Doesn’t

Alice and Christopher Ross, husband-and-wife event photographers who also work in TV, had rarely thought about buying an apartment until a year ago, when a friend suggested that the buyer’s market might be nearing its bottom. Financing snafus scuttled their first couple of bids, but this March, they made a respectable $550,000 offer on a South Slope two-bedroom that had lounged on the market for months. Then, out of nowhere, another bidder offered a larger down payment. The Rosses, eager to make a deal since Alice was pregnant, countered at full price, $559,000, and they had an agreement. Then the sellers scheduled another open house that coming Sunday. The Rosses started to worry: Surely the place was theirs? They were just waiting for the paperwork to catch up, right? For days, “it was radio silence,” says Christopher, and then their broker, Halstead’s Rodney Ripps, called with bad news: A visitor at that fateful open house had swooped in with an all-cash offer of more than the asking price. “It was devastating,” he says. “Why are we having such a hard time? In a recession!”

Though there are skeptics—“Bidding wars are for suckers. And, yes, there are suckers out there,” wrote a poster on StreetEasy.com a few weeks back—plenty of buyers are determined enough to engage in pricing one-upsmanship. More than half of Manhattan and Brooklyn brokers at the Corcoran Group who responded to a recent in-house survey reported navigating at least one bidding war this year. Between 12 and 15 percent of deals struck last month by agents at Brooklyn’s Fillmore Real Estate had multiple bids, up from approximately 5 percent in March; and at Warburg Realty’s East Side Gallery office, at least 20 percent of April’s transactions incited a contest. Elliman’s Alfred Renna, an executive vice-president who analyzes contracts at the firm, says between 4 and 6 percent of their deals in the first four months of the year wound up fetching more than the asking price after multiple bids.

So how do you, as a buyer, avoid getting caught in this predicament? Look for a situation where you can make the best offer, which does not necessarily mean more money. All-cash offers carry weight, obviously, but if you can’t swing that, don’t despair. To avoid a bidding war, Corcoran’s Maura Geils recommends putting “your best bait on the hook” immediately—don’t hold back. And be at the ready with all documentation. A pair of her clients recently outflanked a deep-pocketed competitor because the couple was organized and responsive and therefore better positioned for a co-op-board interview.

Lately, the wars tend to happen only over the most desirable apartments in the most coveted neighborhoods. (In Brooklyn, for instance, that means two-bedrooms with outdoor space in the preferred Park Slope and Boerum Hill school districts.) “Those are like hotcakes with maple syrup,” Ripps says. “Everyone loves them.” Adjust your horizons just slightly—looking at apartments on the margins of your favorite neighborhood, say—and you’ll strongly improve your chances of being the top bidder. Patience worked for the Rosses: They just signed a contract for another apartment, a Park Slope two-bedroom, without much competition. So far.

Your Offer Stands! Until It Doesn’t