Townhouse Experts Guide: Selling Your Townhouse Chapter Preview

THE TOWNHOUSE EXPERTS ® GUIDE

SELLING YOUR TOWNHOUSE Dexter Guerrieri and Jane van den Berg Ordway

THE TOWNHOUSE EXPERTS ® GUIDE

SELLING YOUR TOWNHOUSE

Cover photo: Dylan James Walker

All material presented herein is intended for information purposes only. While this information is believed to be correct, it is subject to errors, omissions, and changes, and we recommend you also consult with an attorney on any legal matters.

COPYRIGHT @ 2020 BY DEXTER GUERRIERI AND JANE ORDWAY LIBRARY OF CONGRESS CATALOGING AND PUBLICATION DATES ISBN: 978-1-64826-217-3 ALL RIGHTS RESERVED.

INTRODUCTION

IT'S NOT THAT SIMPLE!

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s a n ow n e r o f a tow n h o u s e i n N ew Yo r k C i t y, yo u m ay encounter challenges when Deciding whether or not to sell your property. We know, because we are townhouse owners and investors ourselves. The decision not to sell may require a process of thoughtful deliberation. Even the decision to sell, while exciting, may be more complicated than it seems at first glance. There are myriad, and often complicated, tax issues and New York City and State regulations to contend with, and, because your townhouse is unique, getting an accurate estimate of its real value may be difficult.

All of these factors, added to choosing an agent, and preparing your property for sale, can be challenging.

Dexter conceived of this reference manual for townhouse owners based on his thirty-plus years as a townhouse broker, and our experiences as townhouse owners. Selling or not selling your property may be one of the biggest financial decisions you’ll make. Why repeat the mistakes others have made, when you can plan for a positive, profitable, and fruitful experience?

Our resource manual guides you through the process either way and is part of our commitment to provide townhouse owners the resources they need to achieve their real estate and life goals. Rather than navigate this process based on random, and possibly inaccurate sources of information, you can benefit from our experiences, and those of the many people we’ve worked with, who have profitably sold, or chosen to hold onto their townhouses—for all the right reasons.

D exte r G u e r ri eri and Jane van den Berg Ordway 1

selli ng yo u r tow nhous e

WHY SELLING A TOWNHOUSE IS LIKE CHESS: My love for townhouses, and their brokerage, goes back to my early adulthood—and my love for chess dates back to my teens. Over the years, I’ve found surprising commonalities between these twin passions. Selling a townhouse requires an ability to properly assess the exact situation at hand and re-assess at each step.

There are known openings, middle-game feints, and end-game cool calculations in brokerage.

The action also unfolds at its own pace—but the players manage it strategically.

For example, the chess match for the World Championship between Magnus Carlsen and Sergey Karjakin had games that lasted six and a half hours. Listening to live commentary by Grandmaster Judit Polgár was thrilling and informative for chess aficionados such as myself. Now, imagine that chess game as a complex negotiation stretching out over weeks, sometimes longer. In such a scenario, the right strategy is key. That’s our mindset when we sell a townhouse for a client or ourselves.

Throughout the book, you’ll find special sections called “The ‘Chess’ Strategy,” which reveal the key moves you can make to give you an advantage when selling your townhouse. I hope these strategies will spark your curiosity and inspire questions. At any point, if you have any queries or comments, email me: Dexter@TownhouseExperts.com. - Dexter 2

CHAPTER 1

TO SELL, OR NOT TO SELL, THAT IS THE QUESTION. “Once you have lived in New York and it has become your home, no place else is good enough.” jo hn st ei nbeck

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h o u l d yo u sell yo u r tow nho u se? Answer ing this question isn’t always easy—and you might not expect we would ask you that as real estate agents. But, as townhouse owners and investors ourselves, we have been in your shoes with our townhouses and have had to make strategic decisions about our own properties. We know that deciding to sell isn’t always about price, but what works for your life. Depending on your circumstances, your best choice might be to stay put. In the end, we want you to be happy with whichever action you decide to take.

We’ve compiled the following lists of common reasons townhouse owners either decide to stay in their homes or to sell as a way to help you start the decision-making process.

REASONS TO NOT SELL

1. You want your property’s value to continue to increase. Real estate prices in New

York City do rise, and townhouses, in particular, are a very strong long-term investment. This is true, even if you take inflation into account.

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2. There are financial costs associated with selling and relocating. If you decide to

sell, you will have to pay taxes on the sale. Currently, this means paying 15% of the sales price to the Federal government and about 14% to the City and State.

Even though you probably qualify for this reduced rate of Long-Term Capital Gains, it’s still a lot of money.

3. You have high expectations on a selling price based on a record-breaking sale. Each townhouse is unique, right down to its location on a block. For example, in Manhattan, houses on the 70s blocks sell for significantly more than townhouses in the 90s, and go for even more, depending on how close you are to Central Park. We often hear people say, “I’m waiting for my house to catch up with the houses on the Park Block.” That simply will never happen.

4. Your property generates rental income you depend on, or enjoy. You might be

living on two floors and collecting hefty rents each month for your other floors.

If you have a five-story townhouse, those other three floors could be bringing in money you count on for repairs, major capital improvements, other kinds of expenses, and, of course, any mortgage payments. But perhaps you’ve paid down the mortgage, put your kids through college, and now it enables you to travel, or do other things you’ve always wanted to do, to enjoy your life.

5. You are concerned about how you’d reinvest profit. What to do with all that

Proximity to Central Park is a key valuation factor.

This unusual salmon-colored townhouse is located just steps away. When the owners cleaned the soiled pink granite and iron spot brick facade, the neighbors were astonished, thinking it had been painted.

cash from the sale? Often, the secure investments available today don’t yield big returns. This is one of the more common reasons owners put up with the hassle of being a landlord. Real estate is a crucial part of their portfolio.

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to sell, o r not to s ell?

6. You’re reluctant to make such a significant transition. If you have lived in your

home for much of your adult life, moving may be a scary prospect. You’re comfortable with your community and routine. You know the person who makes your bagel; the dry cleaner who has cleaned your clothes for years; and all of your neighbors. You may have a place of worship, a special place to sit in the park, and a few favorite restaurants close by. So, when you think about moving, the idea of having to re-establish your life elsewhere may seem daunting. Regardless of how much you might complain about your home (the maintenance issues, the challenges of the stairs, etc.), the fact is, you really just don’t want to leave your neighborhood and disrupt your routine. So, you stay put.

7. You would rather not deal with transfer issues right now. You may have a partner

you have to negotiate with, or perhaps challenging family dynamics, or estate issues that will emerge if you sell right now. You choose the time that is right for you.

8. Your townhouse is your primary asset. Your townhouse could represent your

entire life “savings,” which can further complicate the decision to sell. Frequently, we are contacted by such owners. It’s not uncommon for us to hear owners say, “This was not just our home. The rental income put our three kids through college.” For some, the sales price won’t yield enough cash to downsize in the same neighborhood, or in a comparable home, elsewhere.

9. You decide the house you have is a great investment and that you’ll buy another!

In this case, making a change may not involve leaving your current townhouse.

We can advise on identifying the best investment properties, the pros and cons of becoming a landlord, or refer you to property management services.

REASONS TO SELL

1. Your property has a lot of stairs. You can easily remember, once upon a time, you practically flew up and down the stairs and revelled in the advantages of multi-level living. But now, you say things like, “We are not getting any younger.”

Perhaps you think that you should install an elevator—and then realize just how 5

selli ng yo u r tow nhous e big and costly a project that would be—and you’d still have to climb up the front stoop daily.

2. You’re “trading up.” You might

want a larger or wider building or a better location. You might have a 15-foot-wide building and decide you want one that’s 25-feet wide.

Maybe you want to be on the “Park Block” next to Central Park. You might decide that it’s time to get a higher-quality building. Perhaps you want to move closer to your children’s school. Perhaps you want to purchase two more townhouses, based on the increased value of your current one.

3. You’d like a change of scenery. We

also hear a lot about the idea of moving to greener pastures, which, in most cases, means the South, or the Southwest. You may want to sell and move to a warmer, more temperate climate.

Sellers often approach us when they’ve decided to “trade up” to a townhouse that offers more space, features and amenities. This Vandenberg exclusive had all of that—plus some: 18-rooms, Hudson River views, a personal gym, an indoor pool, extensive entertaining space, a private office, marble fireplaces and exquisite architectural detail that made it feel like a European castle.

4. You’ve considered the cost of townhouse upkeep. Caring for a building that was

built as far back as the late 1850s isn’t cheap. Plus, real estate taxes continue to rise—and the 2020 law that limits the amount of real estate taxes you can deduct is a tangible setback.

5. You’ve relocated—and you don’t have time to be a landlord. You could rent out your townhouse instead of selling it, but then you face the challenge of managing a rental building from a distance, or the worry of trusting management to a company that may not be up to your standards for care. In addition to that, 6

to sell, o r not to s ell? problems can arise with tenancies, requiring you to navigate New York City rent laws carefully (and possibly, lengthy court battles in the event the tenancies run into financial problems and stop paying).

6. You feel “chained” to your townhouse. If you rent out units in your townhome

and manage the building yourself, the upkeep can become a burden. When there’s a leak, you’re the one who calls the plumber. You worry that if the pipes freeze and you’re not available, a disaster will occur. You could hire somebody to manage it, but you’ve become so used to handling maintenance tasks over twenty or thirty years, you don’t really relax when you go on a vacation. Perhaps you are retired and ready to have less responsibility.

7. You’re going through a divorce. Another unfortunate, but common, reason

people decide to sell their townhouses is due to divorce. Very often one spouse wants to stay in the building, but can’t afford to buy the other one out. Usually, the property then has to be sold.

8. You’ve got an empty nest. Perhaps your children have grown and left the

house, and now the “empty nest” suddenly feels awfully big for just two people.

Perhaps your partner has died. Perhaps you want to downsize—or maybe you want to move to be closer to your kids or grandkids or other friends or family.

9. You are ready to make transfer and inheritance decisions now. When you confront these decisions ahead of time, you can prevent the scenarios we’ve seen: children or beneficiaries inheriting a house and then fighting and litigating for years over their shares. The property is eventually sold anyway and no one is happy. There can be a great sense of relief and peace that comes with knowing your affairs are in order, with inheritance details and expectations clarified.

Once you have made the decision to sell, you don’t have to go it alone.

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selli ng yo u r tow nhous e DECISION-MAKING WITH A CLEAR HEAD

When you’re choosing whether or not to sell your townhouse, don’t be surprised if emotions run high and pull you in many directions. This makes arriving at a decision all the more challenging. We’ve found that it’s far easier to find your focus if you employ a process for decision-making. Put your pen to paper and answer these basic questions first: Who are the decision makers?

F What’s your timeline?

F What are the pros and cons?

F Who do you need to consult?

F How will you resolve conflicts that come up?

F

From here, you’ll have a good foundation for answering the more difficult questions: What are your motivations to either stay or sell? What are your feelings about them? What are the pros and cons of each? What are the financial, logistical, emotional, familial, relationship, and estate-planning impacts of selling or staying put?

Talk to your other decision-makers: significant other, spouse, or business partner(s), and give yourselves enough time to understand what selling or holding means, individually and together. Do you agree? Run the numbers with your accountant. Does a move impact any extended family or friends? If you have adult children, do you want to ask for their input or does that open a can of worms? Does a sale affect anyone’s or any beneficiary’s estate expectations, meaning that communication needs to take place?

Engage with those who are good listeners and want what’s best for you.

Consider all of the resources available to help facilitate dialogue and planning: your trusted accountant, lawyer, family therapist, estate advisors focusing on transition, or an experienced real estate broker or agent. We have played this role many times. To hear how we’ve assisted sellers who have experienced conflict while in the midst of decision-making, come in to meet with us!

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to sell, o r not to s ell?

Don’t be surprised if you run into conflict if you’re not “going it alone.” We can all run into trouble with joint decision-making or processing input. One resource that’s helpful in these situations is the DISC Assessment. This is a questionnaire-based tool that centers on four different personality traits (Dominance, Influence, Steadiness, and Conscientiousness). Knowing these traits can help you better communicate, ensuring that both of your goals are achieved with less tension. For an exclusive code to access the DISC Assessment, get in touch with us at Dexter@TownhouseExperts.com.

THE TAKEAWAY

The decision of whether or not to sell your townhouse is both financial and emotional for all involved and there can be lots of compelling reasons to do either. You need to be clear as to who the decision-makers are, and to define or choose who you want to consult, in addition to your paid advisors. Fortunately, once you have made the decision TO sell, you don’t have to go it alone.

No matter what you choose, enjoy getting the weight of the decision off your shoulders.

If you decide you don’t want to sell now but may want to in the future, you can prepare for the possibility now, to maximize your profit later. Keep reading to find out how.

YOUR NOTES:

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THE TOWNHOUSE EXPERTS ® GUIDE

SELLING YOUR TOWNHOUSE

Dexter Guerrieri and Jane van den Berg Ordway Dear Fellow Townhouse Owner, You should benefit from other sellers’ experiences, their successes, and their non-successes. Your townhouse is perhaps your largest asset and it really doesn’t make sense to wing it. Save these strategies for the future or give a copy to your neighbor.

- Dexter and Jane “We interviewed four companies with whom we had been most impressed over our 40 years as owners. I am absolutely certain we made the correct decision with Vandenberg. They were professionals in every aspect of the sale, and we are completely satisfied that we left no 'money on the table.' I recommend Vandenberg to fellow East Side townhouse owners because I feel that they are truly "The Townhouse Experts" for all of New York.”

- G.W. “Our experience was enjoyable, simple, and extremely productive. After several unsuccessful attempts to sell our townhouse, we contacted Vandenberg. They provided a frank evaluation of the property and recommended specific staging to get the price we wanted. A few months later, we had closed the deal—despite the 2020 crisis. We have also purchased several townhouses from Vandenberg, and we will definitely work with them in the future.”

- M.B. and P.B. “It was very clear that Dexter and his exceptional team at Vandenberg were the best, and only, group to sell our townhouse. Of course, I wish that I had this book in hand before I started the process. It is a real "keeper.”

- C. H.

Contact us: TownhouseExperts.com 212-769-2900 $14.95

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