A quarter century is a long time, but some things are worth the wait, and Michael Faillace, who lives on the Upper East Side, knew that his neighbor’s one-bedroom apartment was one of those things.
From the time Mr. Faillace bought his 1,100-square-foot apartment on East 86th Street near York Avenue for $184,000 in 1992, he began entertaining a fantasy shared by many New Yorkers. If he could commandeer the neighboring apartment, he could use that extra 800 square feet to expand his two-bedroom into a spacious four-bedroom home with panoramic city and East River views. All he had to do was convince the neighbors to sell to him.
As it turned out, that would not be such an easy task.
Neighbors have their own plans, and over the years Mr. Faillace, 61, missed out on two opportunities to buy the unit, learning a painful truth about the odds of actually buying your neighbor’s apartment: luck and timing are often as important as the money in your bank account.
In January 2018, after years spent nagging and cajoling his neighbors, Mr. Faillace, an employment lawyer, finally got what he wanted, but at a steep price. He convinced the most recent owners, a retired couple who used the apartment as a pied-à-terre, to move by agreeing to pay nearly $1 million for an apartment appraised at significantly less.
For New Yorkers who love their buildings as much as their apartments, buying a unit from a neighbor can mean trading up without stepping outside. Staying in the building allows a buyer to eliminate some of the unknowns that accompany moving — you already know how the board operates and whether the doorman is friendly. Still, the timing has to work, and if you combine the units, they must fit together in a logical way, which, depending on design and engineering, is not always feasible. But if a buyer can make it work, the end result is often cheaper than buying a large apartment elsewhere.
Such deals rely on a heavy dose of serendipity: namely that your neighbor will want to sell at the same time that you want to buy, and will agree to sell to you. Despite the luck involved, these deals do happen with some regularity, according to brokers, architects and real estate lawyers. Jonathan J. Miller, the president of Miller Samuel Real Estate Appraisers and Consultants, estimated that combined units account for about 2 percent to 5 percent of apartment sales in the city.
“I’ve heard of lots of people who have knocked on the door next door to say, ‘By the way, when and if you’re in the mood to sell, please come to me,’” said Steven D. Sladkus, a real estate lawyer and partner at the Manhattan law firm Schwartz Sladkus Reich Greenberg Atlas.
When neighbors reach an agreement, the seller can avoid paying a hefty broker’s fee, and also forgo the expensive and time-consuming process of preparing an apartment for the market. A seller might also be able to command a higher price because the unit is worth more to the neighbor than anyone else.