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Available unit at 575 Fourth Avenue (Douglas Elliman) Available unit at 575 Fourth Avenue (Douglas Elliman)
Whether you’re buying a luxury condo or entry-level coop, over the past two years, bidding wars seem to have become the default. Although the recent surge in interest rates has started to price out some buyers, in many markets, it has made bidding wars less intense but not yet eliminated them. And, as more people look to rent instead of buy, a new problem is appearing—bidding wars on the rental side of the market. This article examines how to win a bidding war as a buyer or rent and, more importantly, how to avoid finding yourself in one in the first place.

Bidding Wars on the Buying Side of the Market

When you're looking to buy a property in a high-demand and low-inventory market, bidding wars are often a factor with which you must contend. Unique to the pandemic market has been the number and intensity of bidding wars.

Early in the pandemic, as many New Yorkers fled the city, bidding wars erupted over suburban homes and rural properties. As the pandemic continued, bidding wars became commonplace in many popular neighborhoods in Brooklyn as buyers looked to size up to larger apartments and townhouses. By mid-2021, as more people returned to Manhattan, bidding wars also returned to New York City's most densely populated borough. So how do you win a bidding war?

Bid high but over your threshold or the home’s appraised value

Don't go bargain hunting if you're likely to face a bidding war. Under-bidding won't get you anywhere. That said, also avoid going to the opposite extreme and bidding well over the asking price. If you do and you require financing, you may not be approved, even if you previously prequalified. But even if you put in a high bid and can afford the additional cost, there is another risk: being stuck with a property that is worth significantly less than the purchase price. Especially as we enter a volatile economy, holding property that is worth less than the purchase price comes with obvious risks.

Consider writing a homeowners’ “love letter”

As stated on the National Association of Realtors' (NAR) website: “To entice a seller to choose their offer, buyers sometimes write ‘love letters’ to describe the many reasons why the seller should ‘pick them.’” Some families go further, including pictures and even video testimonies of their families. While they may appear harmless, as the NAR further notes, “these letters can actually pose fair housing risks because they often contain personal information and reveal characteristics of the buyer, such as race, religion, or familial status, which could then be used, knowingly or through unconscious bias, as an unlawful basis for a seller’s decision to accept or reject an offer.” In fact, buyers’ love letters are so controversial that in recent years several states, including Oregon, Washington, and California, have imposed bans on the letters. However, in March 2022, a federal judge overturned the state bans, concluding that banning buyers’ love letters violates First Amendment rights. So, do they work? In the case of a multi-offer situation, the reality is that a personal appeal to the owner can be a criteria factor.

Let the seller set the timeline for closing

Although some advice on how to win a bidding war on a home suggests waiving contingencies (e.g., your home inspection or financing contingency), waiving contingencies designed to protect you and your money is never advisable. In most cases, potential buyers do this to ensure a quick close. A better strategy is to maintain all the contingencies in your contract but commit to the fastest possible close. After all, most sellers' are eager to close as soon as possible. If the seller, however, needs more time, also agree to work with the timeline. Letting them move out when they are ready (e.g., when they have found a new home) is another great way to secure a home when facing tough competition from other buyers.

Look for whisper listings

The best way to win a bidding war is to never enter one in the first place. In fact, this is one of the reasons that whisper listings or pocket listings have become increasingly popular over the past two years. In a nutshell, these listings are never publicly listed (e.g., on the MLS), and as a result, attract fewer buyers, reducing the likelihood of a multi-offer situation.

Bidding Wars on the Rental Side of the Market

As buying a home becomes more difficult due to surging interest rates, high demand, and low inventory, it is no surprise that the demand for rental units is also surging, and this is creating bidding wars on the rental side of the market. In fact, according to Douglas Elliman, in May 2022, over 18% of rental listings led to bidding wars. For renters, finding and securing an apartment isn't the only challenge. As bidding wars heat on the rental side of the market, brokerage fees are also surging.

Just two years after New York State banned brokerage fees in cases where brokers are representing a landlord (this regulation was quickly overturned after the Real Estate Board of New York and the New York State Association of Realtors filed a lawsuit) brokers are reporting some of the highest fees ever on rentals. According to one account, some brokers are now charging renters as much as 18-20% of the first year’s rent to help secure a unit (in the past, the average has been closer to 8.5%, with high brokerage fees peaking around 15%).

Unsurprisingly, the current situation is leading many renters to adopt strategies not unlike that of desperate buyers (e.g., offering to pay more than the asking price, renting apartments that haven't yet gone on the market and renting apartments site unseen and writing renter "love letters"). There are also a few other things one can do to win a bidding war on the rental side of the market.

Get your paperwork in order and bring it to the open house

In today's rental market, no one has time to wait for a prospective tenant to get their paperwork together. If you're on the rental market, know your price range (remember that it will be tough to rent anything that exceeds a third of your monthly income) and come in with proof you are making what you claim to be making. Among other things, be prepared to share your recent tax records with W2s or 1099s, recent paystubs, and potentially even bank statements. Having all this paperwork on hand and ready to hand over at a showing is a great way to get to the front of the line.

Create a renter resume

In addition to showing up with your required financial paperwork in order, create a renter resume, essentially a one- to two-page overview listing all your addresses in recent years with contact information for all your past landlords and other pertinent information (e.g., your current employer, length of employment, etc.). It's not a requirement, but most landlords and management companies—not to mention the brokers who will present your case to these owners—will appreciate the effort to be fully transparent.

Show up as a model tenant

Although subject to ongoing debate, in most cases, landlords can reject tenants with pets or certain types of pets (e.g., dogs over 20 pounds), unless the pet is a service animal. Likewise, landlords have considerable leeway to select tenants for other reasons (e.g., to rent to a librarian with a full-time position over a self-employed drummer). The more you can do to show looking like a model tenant, the better off you'll be.

Great listings that just might spark a bidding war

From the Listing: NO BOARD INTERVIEW! THE COND-OP ADVANTAGE! Pass through the threshold onto meticulously maintained light hardwood parquet floors and take in the expanse of your HUGE 29-foot-long living room. With a separate and distinct dining area, you have the ability to create a home office in this flexible space. You'll love to entertain friends and loved ones as there's sooooo much space! High above the low buildings, townhouses and treetops of the toney Upper East Side, you'll love the bright light that filters through the wall of windows all day long See floor plan and full details here.

↓ Between 2019 and 2022, residential listings in Manhattan and northern Brooklyn spent an average of 92 days on the market according to CityRealty research.

From the Listing: This oversized two-bedroom, three-bath home boasts a flexible floor plan that can easily be converted to three full bedrooms. Centrally located at the crossroads of Chelsea and Flatiron, this turnkey loft-like residence features floor-to-ceiling windows with northern and southern exposures, beautiful dark oak floors, and 10' ceilings. See floor plan and full details here.

↓ One-bedroom condops (co-ops with condo rules and often no board approval) were the unit types that saw the quickest signings. They sat on the market for just 86, compared to 91 days for co-ops and 93 for condos.

From the Listing: Showings by appointment only. Welcome home to this rarely available one bedroom (convertible 2) with direct southern views at the Randall House, a Greenwich Village Cond-op (co-op with more flexible condo-like rules). Overlooking Greenwich Village, apartment 10P is a graciously sized home with incredible closet space and terrific light streaming through wall-to-wall south-facing windows. The expansive living and dining area allows for multiple configurations, including creating a home office or 2nd bedroom, while still maintaining a dining area. The kitchen features stainless steel appliances, granite counters and custom-made cabinetry. A king sized bed is easily accommodated in the bedroom and there are two large closets providing plenty of storage. See floor plan and full details here.

↓ Unsurprisingly, affordability is a huge draw. Condos priced around $400K only spent 65 days on the market. But, good luck finding them...

From the Listing: Summer Incentive Sponsor providing a $25,000 CLOSING COST CREDIT to buyers on full asking contracts signed before July 15, 2022.

A distinctive experience both inside and out, Residence 103 is a 432 SF one-bedroom and one-bathroom offering incredible value for the space and the quality.
See floor plan and full details here.

Open House: Friday, July 15, 2022: 12:00 PM-2:00 PM

H7, 623 Avenue H, #4E
$430,000

Midwood | Condominium | 1 Bedroom, 1 Bath
From the Listing: Unit 4E at H7 Condominium is an inviting 1-Bedroom 1-Bathroom home featuring a linear kitchen leading to a dining/living area. The bedroom in this layout offers a closet with an ample amount of storage space and a private balcony. With south-facing exposure, this unit bathes in sunlight throughout the day. See floor plan and full details here.

From the Listing: Once in a blue moon, a rare opportunity comes along to own your piece of Manhattan. Make this rare, corner Condominium Studio your home, or your great investment as you can rent it indefinitely! And this flexible layout converts easily to a Junior 1 Bedroom! See floor plan and full details here.

↓ Condos in Windsor Terrace (Brooklyn's best-kept secret) spent an average of just 46 days on the market

From the Listing: Opportunity knocking in Windsor Terrace! This large 2 bed / 2 bath condo on the top floor of a four-story elevator building offers great light and classic Brooklyn rooftop views from over-sized windows throughout. The spacious living area offers ample room for living and dining, and the open kitchen features marble countertops, stainless steel appliances & Italian cabinetry. The corner primary bedroom fits a king-size bed and room for much more, a wall of closets, ensuite bath with jacuzzi tub and you can step right out onto a large sunny balcony to enjoy your morning coffee or tea and breath in the day. See floor plan and full details here.

From the Listing: Welcome to Sky 485, a four-story, seven-unit boutique condominium with low common charges, parking, 421(A) tax abatement, and a common roof deck. Unit 2A is a stunning corner three-bedroom (convertible four-bedroom), two-bathroom home beautifully positioned to enjoy spectacular vistas from all angles, at all hours, and in every season. Its uniquely fluid floor plan offers plenty of space for showcasing your art collection, and the unit includes a dedicated on-site parking space with an electric car charger! See floor plan and full details here.

↓ Park Slope listings of all types spent the least amount of time on the market out of all core NYC neighborhoods -- clocking in just 55 days on average.

From the Listing: IMMEDIATE OCCUPANCY. For a limited time, Sponsor offering 30% off parking for all full price offers, limited spaces remain! Introducing apartment 4A, a corner two-bedroom, two-bathroom residence featuring south and west exposures and a private wrap balcony. Custom floor-to-ceiling, double-paned, Italian windows bathe this residence in the sunshine, highlighting the 7" European oak wood flooring and expansive living spaces. Designed by celebrated Brooklyn-based design firm, Meshberg Group, and built by prolific Fischer+Makooi Architects, every detail in this 1,030-square-foot home has been meticulously considered. See floor plan and full details here.

From the Listing: Sun-drenched one-bedroom gem in the heart of Park Slope. This condo impresses with wide-planked floors, a spacious garden-facing balcony, a chef's kitchen, and in-unit laundry. Enjoy the decadence of meals fresh out of your chef's oven on your oversized balcony. The southern exposure provides all-day sunlight, while the oversized windows with tree top views, offer privacy and nature. Low monthly taxes are abated through 2024. See floor plan and full details here.

Open House: Sunday, July 17, 2022: 12:00 PM-1:30 PM

11 Berkeley Place, #1
$795,000

Park Slope | Cooperative | 1 Bedroom, 1 Bath
From the Listing: Perfectly positioned in the heart of Park Slope, this pristinely renovated one-bedroom apartment includes the rarest of all amenities private on-site parking at no additional fee. Spilling with warm, soft sunlight through the day, 11 Berkeley Place #1 is a beautiful place to call home for buyers looking for a mix of pre-war charm plus modern amenities, low carrying costs, and close proximity to all that 5th Avenue has to offer. See floor plan and full details here.

↓ Over the last three years, the top ten neighborhoods where homes spent the least amount of time on the market were all in Brooklyn.

Park Slope (55 days on average)
Prospect Heights (58)
Carroll Gardens (59)
Windsor Terrace (60)
Clinton Hill (64)
Flatbush (67)
Fort Greene (68)
Greenpoint (68)
Sunset Park (68)
Brooklyn Heights (69)

From the Listing: Move right into this meticulously renovated floor-through townhouse two-bedroom home. High ceilings, south and north exposures and 7-inch wide white oak solid plank flooring throughout create an oasis of understated luxury. See floor plan and full details here.

From the Listing: This bright, sky-lit and stylishly renovated 3rd floor 2BR/2BA with private balcony is a dream come true! An exclusive entrance welcomes you to this renovated, open and airy home with generous proportions, vaulted ceilings, a working wood-burning fireplace, built-ins, ample closets, hardwood floors, and private outdoor space. Enveloped in natural sunlight, the living room and dining area are ideal for entertaining. The open chef's kitchen is outfitted with stone countertops and Bosch stainless-steel appliances, including a dishwasher and microwave, new contemporary white cabinetry, an attractive subway-tiled backsplash, and breakfast bar. See floor plan and full details here.

↓ More evidence of Brooklyn's growing appeal during the pandemic was that Brooklyn apartments were on the market for 70 days on average compared to Manhattan's 106.

From the Listing: A new boutique condominium in Carroll Gardens, 538 Clinton Street is a coveted 25' wide townhouse that has been reborn as 5 unique residences. Situated on a sunny corner, these homes all have multiple exposures and superb natural light. The versatile layouts offer large one to three-bedroom configurations with huge living areas, soaring ceilings, high-end finishes, and most residences include abundant private outdoor space. See floor plan and full details here.

↓ Due to almost no inventory, apartments in Morningside Heights left the market the fastest in Manhattan. This stat is a bit disingenuous since the bulk of the neighborhood's inventory came from one new condo development, The Vandewater.

From the Listing: Every now and then you'll find a piece of New York City history in an apartment, a space that clearly exudes the warmth and charm of turn-of-the-century architecture. Apartment #1 at 523 West 121st Street, a raised first-floor unit with excellent light, is exactly that home with its side-by-side living and dining rooms, impeccably restored moldings and oak paneling, 9'9" ceilings, a windowed eat-in-kitchen, and an oversized windowed bath and 2 bedrooms, all in excellent condition. This beautifully scaled classic five-room is easily converted to a true three-bedroom home, please see the alternate floorplan. See floor plan and full details here.

From the Listing: Welcome to The Hamilton. Built in 1912 the building was designed by the famed architect Gaetan Aiello in the modern Renaissance style. A huge elegant marble lobby with beautiful stained glass windows recently recreated by one of the building's resident owners welcomes all who enter. Even the internal halls are carefully appointed, with original wrought iron railings and marble steps. We are proud to offer this rarely available, extra-large Classic 6, with the partial river, park, and city views and large windows throughout that allow for a magnificent sun-drenched apartment. See floor plan and full details here.

↓ After Morningside Heights (#32), listings in Greenwich Village (#35), the Upper West Side's Broadway spine (#36), and Riverside Drive (#37) disappeared the fastest.

From the Listing: Introducing #109W at 77 Bleecker Street - A rare opportunity to own a deluxe 1-bedroom, 2-bathroom plus home office Greenwich Village duplex! This incredible, ultra-private parlor duplex with courtyard garden views has a versatile layout and can easily be flexed into a 2-bedroom. The soaring ceiling heights go up to 14' and there is hardwood parquet flooring throughout this charming and serene apartment, which boasts two full bathrooms and multiple storages and closet spaces spread over two floors. See floor plan and full details here.

From the Listing: This one truly is rarely available. With four bedrooms and a home office, this renovated home provides the space, flexible floor plan, and bedroom count, to achieve great functionality and peace of mind. Facing east, overlooking the historical tree-lined Barrow Street, there are large and wide windows allowing great light to flood into the apartment. Well-designed with attention to detail, there is an elegant entrance foyer that leads to the spacious and open living room, dining area, and kitchen. See floor plan and full details here.

From the Listing: Come home to this ideal 1 bed | 1 bath Prewar Gem in the Prime West 70's just moments from Lincoln Center and Central Park! Well maintained and thoughtfully laid out, this charming home is perfectly situated on the 6th floor of a well-run Coop with high ceilings and double exposures. See floor plan and full details here.

From the Listing: On one of the Upper West Side's most coveted blocks sits a one-of-a-kind oasis just waiting for a new owner. This stunning triplex home offers a lovely living-dining space with hardwood floors, oversized windows, three skylights, a fireplace, and 16ft ceilings. It is truly a dramatic, unique, and wonderful space with southern light, a built-in bar, custom cabinetry, thru-wall AC, abundant storage, and a washer/dryer. See floor plan and full details here.

From the Listing: Now offering showings of our spectacular on-site model residences, please contact our sales team to schedule a private tour. Presenting light-filled Residence 8A, an efficiently gracious 828 SF 1-bedroom, 1-bathroom home with bright North & East exposures. With ceiling heights up to 10' 8", luxurious details include Josko floor-to-ceiling, energy-efficient windows clad in white oak and prewired for motorized shades, state-of-the-art LG system for zoned temperature control, and elegant oak floors. See floor plan and full details here.

↓ One-beds get picked up in the least amount of time out of any unit size. Brooklyn and Manhattan one-beds priced around $900K spent an average of just 78 days on the market

From the Listing: Welcome home to this sunny, quiet, TURNKEY north-facing apartment with oversized windows, sky and city views, and nearly 10' ceilings! Charming home with pre-war details, decorative fireplace, hardwood floors, and exposed brick. This spacious home features a new kitchen, range, cabinets, and dishwasher. The bright, extra wide living room and separate dining alcove are great for entertaining with arched entrance and beamed ceilings, and new full bath on the first-floor offers you everyday living and the ability to work from home. See floor plan and full details here.

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Contributing Writer Cait Etherington Cait Etherington has over twenty years of experience working as a journalist and communications consultant. Her articles and reviews have been published in newspapers and magazines across the United States and internationally. An experienced financial writer, Cait is committed to exposing the human side of stories about contemporary business, banking and workplace relations. She also enjoys writing about trends, lifestyles and real estate in New York City where she lives with her family in a cozy apartment on the twentieth floor of a Manhattan high rise.