Property Tales
"I'd really like to sell the apartment as quickly as possible and without too much fuss. I'd prefer not to have to fix it up, because I just don't want to spend the money or invest the time it would take to do that. Truth be told, I'm just plain greedy, and I'm trying to figure out how I can get the biggest chunk of money possible for the place with as little effort as possible. I'm quite sure my thinking about this isn't at all unusual.
housewife and landlord
MARYANN MCCANN and her husband own several properties, including an East-60s condo that they've decided to sell before the market drops-which she suspects will be fairly soon.
"My husband and I bought the apartment for the insider price of $90,000 in 1989," she says. "We got a mortgage for the whole price without even having to make a down payment-because the condo was valued at twice the insider price we were paying for it. That was our first real estate purchase. We weren't really crazy about the apartment, and we hadn't even thought about getting in to real estate, but the deal was too good to pass up."
The apartment is a 520-square-foot studio with sleeping alcove, small kitchen, dressing area and bathroom. It's on the third floor of a luxury highrise building. There's nothing special about the layout, and all the windows are on one wall, facing the brick rear wall of another building.
In other words, the apartment isn't a prize. And the McCanns know it. Still, Maryann's strategizing to push their price to the highest the market will bear. In order to do that, she has to make some hard decisions.
"Basically, I've got to choose between the two very reliable real estate agents I've consulted-and they've each given very different advice," says McCann. "One says we should just refinish the floors to make the apartment look lighter, more cheerful and then should put it on the market as quickly as possible. She says the apartment should sell for about $420,000, pretty much as is, but with the floors redone."
The other agent is suggesting that the McCanns really it fix up: "Install new cabinets, a counter and appliances in the kitchen, retile the bathroom and refinish the floors, which would require our investing about $5000, at least." But that would mean a delayed listing. "Maybe several months from now, depending upon the availability of workers and supplies. But, that agent says with those renovations, the apartment should sell for around $450,000."
Trouble is, McCann suspects each agent is promising her a price that's too high-perhaps to get an exclusive listing on the condo.
"I figure we can get $375,000 for it after we've redone the floors and regrouted the tiles," McCann says. "Or, if we go through the ordeal of having new cabinets, counter and all that installed, we could probably get $399,000. We know other owners in the building were asking about $400,000 for their newly painted 420-square-foot apartment with a Murphy bed instead of a sleeping alcove, and they had to lower their price. Finally, an offer came in for around $350,000, and the condo could sell for $365,000-if they're lucky. So, I think I'm more realistic than the agents about what ours will bring. I just have to decide whether it's worth it to invest $5000 and a couple of months of headaches to raise the price by $25,000, if that."
Meanwhile, McCann's not grumbling about her situation.
"Whichever way we go, we will have made a nice profit on our initial investment of what was, in fact, zero dollars. Except for the brief time when my husband and I lived in the place, we've rented it and made about $400 per month more than our combined maintenance and mortgage payments-so we've cleared about $72,000 during the 15 years we've owned the place. And, during that time, we've paid off about $25,000 of our mortgage. So we stand to make a handsome profit when we do sell-even if it's only for $399,000.