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April 29, 2009

Price Cut at 273 Berry Street

The three-story townhouse at 273 Berry Street at South 1st Street on Williamsburg's South Side hit the market last February with a price tag of $1,129,000, which is where it was when it was an Open House Pick in March. On Monday, the asking price was reduced by 7 percent to $1,049,000. The interior has about as much detail as you can expect to find in this part of town. The owner's also willing to provide financing. Further to fall or about right now? GMAP

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7%???? STUPID. You'd have thought that if there was any interest in theis place that there'd be offers to negotiate coming in at 10% off. Cut it 15% and you'll move it, maybe.

Posted by: daveinbedstuy at April 29, 2009 10:48 AM

A friend of mine is looking for a 2 or 3 family in Williamsburg. He is waiting for the prices to come down from 1.4 M (last Spring) to 700K. I thought he was crazy last year, now I'm not so sure. It definitely looks like that's where the market is heading.

Posted by: Maly at April 29, 2009 10:55 AM

nobody wants to pay full price so this may be a decent middle price. price at a little over $1mm and sell for mid-800k to low-900k

Posted by: Ringo at April 29, 2009 11:02 AM

What does "The owner's also willing to provide financing" mean?

Does that mean you take out a mortgage with them and if you default then they get the house back?

Posted by: the chicken at April 29, 2009 11:13 AM

Basically, chicken. Owner financing, though not all that common, is more common here than outside the country, for sure.

Posted by: daveinbedstuy at April 29, 2009 11:17 AM

Id' say this house can sell at 995k!
am not sure if that block is right in the heart of everything
but it needs a lot of work!

Posted by: gemini10 at April 29, 2009 11:19 AM

I like this block - but how many people are looking for townhouses in Williamsburg? I think 800-850k would get this to move.

Posted by: dirty_hipster at April 29, 2009 11:20 AM

Yeah, get this a little under a mil and it probably sells. Cute little house in a cool part of town.

Posted by: wasder at April 29, 2009 11:27 AM

who / what is the addressible mkt / buyers for a small 1-2 family house in williamsburg priced $1M or more? Condos - that I understand who's the target buyers are. if the addressible mkt is a cheaper $$ per sq ft vs condos then seller should just bite hard & cut deeper NOW and just sell it before condo prices there tank further.

Posted by: more4less at April 29, 2009 11:28 AM

Totally M4L - I'm not one to say "for that price you could get something better in _________ neighborhood" but......

While I really like the burg - If i was in the market for a 1mill townhouse i think i would prefer something in great shape in Clinton Hill (or something amazing in Bed Stuy)

Posted by: dirty_hipster at April 29, 2009 11:33 AM

Its a nice block, in a relatively quiet area (Berry does not get tons of traffic, and there is not much retail). Not sure what is up with the $71 taxes - even as a monthly figure that seems really low.

Posted by: WBer at April 29, 2009 11:35 AM

"Basically, chicken. Owner financing, though not all that common, is more common here than outside the country, for sure.

Posted by: daveinbedstuy at April 29, 2009 11:17 AM"

But what is it DIBS? Does the seller provide the mortgage for you then? I can see that working if the seller is a bank (in the event of a foreclosure) but not otherwise...

Posted by: the chicken at April 29, 2009 11:41 AM

Yup chicken, buyer gives seller downpayment, seller gives buyer the property and takes back a mortgage and a note...

Posted by: jessibaby at April 29, 2009 11:47 AM

"Yup chicken, buyer gives seller downpayment, seller gives buyer the property and takes back a mortgage and a note..."

Interesting - what are the risks involved with this? With so many people having trouble getting financing nowadays, why don't you hear abotu thsi happening more?

Posted by: dirty_hipster at April 29, 2009 11:52 AM

DH, seller would prefer to get cash in hand & completely free & clear of the ppty vs holding a note after the sale. Mortgages are non-recourse loans in US - ie note holder can sue buyer for rest of note balance; can only repossess the ppty

Posted by: more4less at April 29, 2009 11:58 AM

I would love to live in a townhouse like this in Williamsburg on Berry St. It's quiet and close to tons of great restaurants and retail (too many to mention, but list includes many home and garden stores as well as Aurora and Superior). But it's $400,000 over my price range.

But I would think there would be a ton of artists and restauranteurs and small business people in Williamsburg that would have the money and kids and jump at a chance like this.

Interesting about the seller financing -- good solution to banks unwilling to fund jumbo mortgages. Does that mean the seller has a million sitting in the bank?

I'm surprised it hasn't sold already. Maybe strike a deal at $999,999 and avoid the mansion tax.

Posted by: mopar at April 29, 2009 11:59 AM

M4L, you trying to pick a fight? With residential deals you can foreclose and collect a deficiency!

Posted by: jessibaby at April 29, 2009 12:02 PM

"DH, seller would prefer to get cash in hand & completely free & clear of the ppty vs holding a note after the sale. Mortgages are non-recourse loans in US - ie note holder can sue buyer for rest of note balance; can only repossess the ppty"

Gotcha

Posted by: dirty_hipster at April 29, 2009 12:03 PM

so why are we hearing so many people can walk away from their properties and only ding is their credit scores?

Posted by: more4less at April 29, 2009 12:04 PM

Well, I don't know about all states, but I'm certain that in NY you can collect a deficiency...I suppose the reason that these people are only getting a ding to credit scores is because they don't have any assets. I'm guessing that the ding on the credit score is tied to a judgment.

Posted by: jessibaby at April 29, 2009 12:08 PM

"Well, I don't know about all states, but I'm certain that in NY you can collect a deficiency..."

Wrong!!!!!!!!!!!!! Only whats on the house unless you refied!

"'m guessing that the ding on the credit score is tied to a judgment."

A Mortgage is on a Secured Asset retard! Take the house and end of story!

I wish the OT was back open so the retards would not comment...

The What

Someday this war is gonna end...

Posted by: Return of The What at April 29, 2009 1:08 PM

"The owner's also willing to provide financing."

How the hell?

"Further to fall or about right now?"

Further to fall. The south side is not the million dollar side. But neither is the north, is it?

***Bid half off peak comps***

Posted by: Brownstones Half Off at April 29, 2009 1:16 PM

what are the public schools like in this part of town?

Posted by: martinv at April 29, 2009 1:17 PM

"Further to fall. The south side is not the million dollar side. But neither is the north, is it?"

Eh - if i was gonna spend a million dollars on anything in the burg i'd get a condo in the gretsch building on broadway.

I live on the northside but actually like the southside better. If ramshackle houses in Gowanus/South Slope can get 1 mill why not the southside?

Posted by: dirty_hipster at April 29, 2009 1:20 PM

What: if the the lender loaned, for example, 100k and at a foreclosure was only able to collect 80k, the lender could sue the borrower for the deficiency.

Posted by: jessibaby at April 29, 2009 1:25 PM

"what are the public schools like in this part of town?"

No clue - Usually Wine Lover chimes in re: schools in this part of town. I think they are opening some charter school closer to metropolitan avenue.

Posted by: dirty_hipster at April 29, 2009 1:28 PM

THis area is absolutely beautiful. Close to the water. And everything. There is a school and a park right on this corner, but no idea how it rates.

Posted by: mopar at April 29, 2009 1:39 PM

thanks DIBS and Jessi.

Obviously it's legal otherwise it would not be offered in print but aren't there laws regarding who is allowed to issue a mortgage? (I would have thought a banking licence at the minimum). And why would you be willing to take on the lending risk if the buyer has been turned down by a bank (unless you think that is the only way you'll be able to sell the place) - sure, lending standards have tightened in the last 18 months but they aren't draconian and banks are still issuing against good credit risk.

On top of this, it would seem that the seller has to effectively have no underlying mortgage themselves.

ps what happened with the OT? (I figured somebody insulted somebody else - just being nosy as to who the protagonists/antagonists were)

Posted by: the chicken at April 29, 2009 1:55 PM

Sorry - I'm not really privy to how mortgages work.

So in this situation the seller holds the mortgage note (which i take to mean doesn't receive any cash) and collects the mortgage payment from the new "owner"

So what seperates this from just renting the place out I guess is that they feel it's overpriced and want to sell before they feel the market bottoms out?

Why would the owner want to hold the mortgage if the potential buyers got rejected by a bank?

Posted by: dirty_hipster at April 29, 2009 2:13 PM

"ps what happened with the OT? (I figured somebody insulted somebody else - just being nosy as to who the protagonists/antagonists were)"

there was some "unusual" suspect saying alot of slurs and pretty raunchy stuff.

sorry - i think i reiterated some of the chicken's points.

Posted by: dirty_hipster at April 29, 2009 2:16 PM

DH, owner would have the 20% (or whatever % he wants to accept) deposit from the buyer so there's some cash in hand but not the whole thing. Plus mortgage paymt would be higher than rent and mortgage paymt doesn't drop (vs. rent would drop in this weak econ)

Posted by: more4less at April 29, 2009 2:26 PM

got it m4l. well it seems like the owner is pretty motivated to sell.

Posted by: dirty_hipster at April 29, 2009 2:35 PM

the chicken, dirty hipster,
re: seller provided financing

As an example ... Seller has lived there for ever and paid off his mortgage. He's willing to take 200K in cash take back a mortgage for 800k. At 6% he gets $4800 monthly income. It's a much better yield than treasuries, could make for a comfortable retirement living in your 200k condo in Florida. Seller has as good an idea what it's worth vs. the banks, and dirty hipster buyers may not have well enough documented income or good enough credit to convince cautious bank lenders to make the loan. Seller gets the deal done when otherwise it would sit on the market, or he'd have to make a more serious price cut.

Posted by: Bklnite at April 29, 2009 2:39 PM

crystal clear bklnite - thanks.

Posted by: dirty_hipster at April 29, 2009 2:45 PM

"A Mortgage is on a Secured Asset retard! Take the house and end of story!"

Just because an debt is secured, doesn't mean that your only right to payment comes from the security...

Ever heard of recourse vs. non-recourse? The right to sue for the deficiency -- that's the recourse.

Posted by: jessibaby at April 29, 2009 2:52 PM

Owner financing: Bklnite has the mechanics right.

In the bad old days, when most of brownstone Brooklyn (and Manhattan) was redlined by the banks, owner financing was the only way to get a sales price over what buyers could pay in cash. Owner financing was standard until the Civil Rights Act ended redlining in the late '60s.

Generally, sellers will only agree to owner financing when they and the buyer strongly believe that the property is worth more than the banks do. So it hasn't been an issue in the financial bubble years.

Recourse/Deficiency Judgment:
Mortgages are recourse in NY, but I think not fully -- I believe the lender is allowed EITHER to sue on the debt (and collect from the borrower) OR to foreclose on the house, but not both. So no deficiency judgments.

If I have the law right, you would expect lenders nearly always to choose to foreclose. The house is usually going to be worth more than you would get from chasing around an insolvent individual debtor. And banks are bureaucratic enough that they'll rarely even look for the exceptions.

Posted by: FinanceGuy at April 29, 2009 3:16 PM

http://www.foreclosure.com/statelaw_NY.html

Are deficiency judgments permitted in New York?
Yes. Adeficiency judgment may be obtained when a property in foreclosure is sold at a public sale for less than the loan amount which the underlying mortgage secures. This means that the borrower still owes thelender for the difference between what the property sold for at auction and the amount of the original loan. The Plaintiff must file a motion within 90 days after the property sale auction to enforce this right.

Apologies due to jessibaby for second time today?

Posted by: jessibaby at April 29, 2009 3:43 PM

"Generally, sellers will only agree to owner financing when they and the buyer strongly believe that the property is worth more than the banks do."

ROTW - Is this what you mean by circlejerk?

This concept reeks of denial. How sad.

***Bid half off peak comps***

Posted by: Brownstones Half Off at April 29, 2009 4:37 PM

Jessi's got claws! Meowwwww....

Posted by: the chicken at April 29, 2009 5:55 PM

A year ago that price wouldn't have raised eyebrows. Williamsburg townhouses have been selling at the million-dollar mark for a while, and not as nice ones as this looks like it might be. That is a great location -- not the closest to the trains, but close to restaurants, schools (PS 84, I think it is across the street) playground, vet, etc. Long-term, as long as condos hold a fraction of their value, I think this is not a terrible deal. After all, if you split it into three units they'd probably be the same size as most condos in the area that are (optimistically) selling for 500-600K.

And these modest little brick houses are sort of rare in the burg. There are a few strips of them and this is one. If comparable square footage in the Mill Building is going for more than this (and I think it did?) than this isn't outrageous.

I think it'll sell fairly easily. Whether or not the stylist that buys it then loses their job, defaults on the mortgage and moves back to Argentina or Australia (I may be projecting...) well, that's another story.

Posted by: Heather at April 29, 2009 6:27 PM

People, many have gotten rich doing seller financing. Have any of you looked at an amortization chart lately? What do you have lose? If this guy accepts a 10% dwnpyt and finances at 6%-it is a sweet deal at $999k for a couple with kids. It is pretty close to the Northside. It isn't a gut job. In fact, if I had an extra $100k, I'd try to buy it myself.

Posted by: bqe1970 at April 29, 2009 8:52 PM

Over on Wythe a similar brick one sold in the high 800s, it was a complete gut job with foundation issues. I have not seen the inside of this one but it certainly is not that bad. Someone will buy this in the high 900s. I don't think the price of condos has much impact on this property. They are simply not building more brick 2 family row houses.

Posted by: bqe1970 at April 29, 2009 9:01 PM

This building has way more charm than the gut job on Wythe- I went to both open houses. That said, I think we can all agree that a lot has changed since the wythe house sold last summer/fall (there were two gutters on Wythe that sold in the 800's, actually!) and this house still needs a lot of work to make it ready for a young family, IMO. Still could be a cool, cute alternative to a condo, family or no...but it needs to be below a million. The thing to do would be to make the attic into a fourth floor with a master suite! But, whew, too much work for too much money for us.
Seller financing is really spelled out on the Virgin Money site- they help you register the seller held mortgage and organize a payment schedule. It seems like something that could work out very well for both parties, if traditional bank financing is not going to happen for whatever reason.

Posted by: onefineday at April 29, 2009 10:07 PM

Heather has nailed it.

Posted by: mopar at April 29, 2009 11:17 PM

« Brooklyn Bridge Park Movie Schedule Announced Inside the New Issue Project Room Space at 110 Livingston »

April 29, 2009

Price Cut at 273 Berry Street

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