“The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” – Warren Buffett
Back in 1992 when I entered the Manhattan real estate market professionally, I made a conscience decision to join the residential industry over commercial. I thought that the sale or purchase of a home consisted largely of an intangible emotional component which attracted me. Twenty-three years later, emotion continues to be an immeasurable factor omnipresent in almost every residential real estate transaction. Unfortunately, panic and impatience are all too often emotional drivers when the proverbial “sh– hits the fan”. I saw it in the decision making of buyers and sellers when the Dotcom bubble burst in 2000, after 9/11 when our country and the world was shaken to its core, and again after the Crash of 2008. And it is way too soon to predict, but there is little doubt in my mind that some buyers and sellers will be hitting the panic button much too soon as a result of the debt crisis in China and theramifications felt at home and across the globe.
No one has a crystal ball and no one can possibly know how the Manhattan real estate market may be impacted by such a disruption in a flawed global economy that is still in its infancy. Even history can only tell us so much as never have the world’s financial markets been so intricately tangled as they are in 2015.
It is nearly impossible to go a single day without stumbling upon a “best of” or “top ten” list of some sort. Intriguing reading for sure. In fact, as the husband of the Food Director at Food & Wine, I am the beneficiary of traveling to multiple cities in F&W’s efforts to determine the year’s top ten Best New Chefs in the United States. Yes, we often eat a couple of breakfasts, 2 to 3 lunches and another 2 to 3 dinners…IN ONE DAY!!! No kidding. We eat a lot of delicious food, but only 10 chefs can be selected from cities all over the country to represent the year’s best and most innovative. Food & Wine has perfected the art of their search for “the best” by developing a grass roots system. They are so good at this that they also have lists for the best coffee bars, burgers, pizzas and more. Now, think back to the last time you asked for a recommendation for a great restaurant, a good burger, a decent slice or even a solid cup of joe. You probably don’t have to think hard because most of us regularly ask for the suggestions of friends, family or colleagues when it comes to items such as these. But now, think back to the last time you grabbed that recommended slice (you must try Caesars on the UWS of NYC) only to be incredibly disappointed that it was just too cheesy, saucy or the crust was just wrong for your taste. Or how about that hailed cup of coffee (I prefer Café Grumpy) that was so bitter you could barely choke it down? Or perhaps there was the highly praised burger (my favorite is at J-Bar in Aspen…with truffle fries of course!) that was squeezed between so much bun that it was almost unbearable to eat? Are you catching my drift? Or am I being obtuse?
Taste matters! Not only when it comes to food and beverage but perhaps even more so when it comes to dealing with the people who are going to take on the responsibility of assisting you with one of the largest sales or purchases in your portfolio. Each year, REALTRENDS via an advertisement in the Wall Street Journal, ranks the top 1000 real estate professionals in the country. That said, I personally know many of the top agents on these lists and as the Director of Sales for more than 120 agents, I promise you that no single agent can fulfill the “taste” of every consumer. What these lists don’t measure is efficiency, ease or difficulty of transaction, ability to overcome obstacles and perhaps—most importantly—the financial gain or loss of the buyer or seller. Ranking real estate professionals based solely on their dollar volume would be as if Food & Wine ranked their chefs on the number of covers (people) that they served, the profit of their respective restaurants or even the average price of their bestselling entrees. It would hardly tell us anything about the food or the dining experience to use these measurements, just as measuring the sales volume of a particular sales agent tells us nothing about the experience of their buyer or seller in a transaction.
When it comes time for you to buy or sell an asset as important as a home, definitely consider the references of friends and family, but also be mindful that we all have different tastes and it may take more than just a referral to ensure that your agent isn’t too cheesy or saucy!
With over $1.6M residents densely packed into a shy 34 square miles, it is probably difficult, no, nearly impossible for the non-New Yorker to appreciate the small town appeal of this city. But ask most New Yorkers the names of the people with whom they come into contact each day and they will rattle off a lengthy list. If they don’t know the actual names, they at least share a familiarity with these every day encounters that rivals any small town across America. And lest not forget the mourning of a closed local business that further illustrates that down-home feel that so many locals share.
I live on the Upper West Side of Manhattan. Although Wikipedia defines the area as 59th Street to 116th Street from Central Park to the Hudson River, most “locals” would probably redefine the area as Lincoln Center-ish to 96th Street. Regardless, my condo building and the immediate vicinity around it rivals that of any small town that I’ve ever visited. My kids joke with me often that I know everyone in our building, including and not limited to children, pets, housekeepers and home health aides. From trading early morning greetings with Abul, the owner of corner newsstand and the friendly crew at Le Pain Quotidien who supply my morning java to the waves and smiles throughout the day from the countless business owners and neighbors, our community has become so familiar that it is difficult to imagine living elsewhere. Our vet, the restaurant delivery men, boutique shop owners, the checkout people at the grocery store, the guys behind the deli counter, the guys who sell us flowers, and even Mike the MTA bus driver who has taken my wife and daughter to school every day for so many years make our “small town” Westside community the very special place that we call home.
The beauty of Manhattan is that it is island made up of a plethora of “small towns” in which you can settle and call home. Just make sure that you are working with a real estate agent who knows the area in which you want to live and can point you to all of the incredible relationships that you can forge once you become a “neighbor.”
Although the bar continues to be raised in the residential real estate industry, marginal agents remain the scourge of the industry’s reputation as a whole. From big ego to misinformation, it is all too often that an agent is an obstacle instead of an asset to the transaction process. It remains imperative that buyers and sellers alike take the time to determine if their agent has what it takes to represent them in a successful real estate transaction.
Consumers should consider these things when interviewing and deciding with whom they will trust with often the biggest transaction in their portfolio:
References- Ask for more than one and call them.
Google-It seems obvious but there is so much to learn about someone via Google.
Quiz the selling agent-have a friend call them and ask questions about the building and report back to you as to whether or not responses were sufficient.
Caution with friends/family-If choosing a family member or friend to represent you, don’t take for granted that they have your best interest in mind and demand the professional service you would ask of a stranger.
Ask “why you?”-Listen carefully to their response being certain that they bring something of value to the table.
Referrals-Ask your co-workers, family and friends about their experiences with agents and consider a referral based on their responses.
- The Brand-Greatly consider and examine the company for which your agent works. You may apply the same tips above on a macro level for the company.
Don’t fall into the trap that all real estate agents are created equal. A solid, savvy and sophisticated real estate professional will be the difference between a successfully smooth transaction and a potential nightmare.
The Daily News headline on Friday read “Apartment sales hit three-year low in January as NYC felt winter freeze.” A very misleading headline given that the referenced report issued by StreetEasy is a CONDO report that does not include the 400+ co-ops and townhouses that also went into contract in the month of January. In fact, 634 listings went into contract in January 2014 versus 718 in the same period 2015 representing a 22% increase YoY (via UrbanDigs see UD-report 2008 to present).
As evidenced in the UD-report, there is no”chill” in the market other than the single digit temperatures from which we all could desperately use some relief. Contrary to The Daily News report, the market continues to be starved for inventory and flush with buyers, making it often a frustrating landscape to navigate.
In the spirit of our robust real estate market, stay tuned for some anecdotes from our CORE agents representing just some of the multiple bid situations in which they have been involved on both the buy and sell sides.
In one of the most synergistic marriages to ever take place on the NYC real estate frontier, world-reknowned develop Related Companies has purchased a 50% stake in Manhattan’s #1 Boutique brokerage firm, CORE.
I am thrilled to be a part of this and look forward to everything that this means for our customers, clients and CORE agents.
Check out the complete story from today’s New York Times.
Mazel tov to Shaun Osher, Jeffrey Blau and the CORE and Related families!
With all of the parties that are involved in a New York City real estate transaction, it still amazes me that when anything becomes uncomfortable, everyone looks to the broker’s commission to make things right.
Consider this: there are a minimum of eight (8) parties involved in an all cash transaction (9 if buyer has a broker) and twelve (12, 13 with buyer’s broker) in a financed transaction.
- Seller attorney
- Buyer attorney
- Seller’s agent
- Buyer’s agent (90% of the time)
- Building property manager
- Closing agent for management
And if financed, we add on:
- Mortgage broker
- Bank Attorney
- Payoff bank attorney (just shows up at closing to collect outstanding mortgage balance from seller)
This is a lot of hands in the pot to get a deal from inception/offer all the way to the closing table. What continues to baffle me after 22 years in this industry is that when any of the above parties makes an error (and it does happen), the seller consistently goes after the commission of their broker.
I suspect, well rather I know that this is in large part due to the size of the fee that the broker yields from the transaction. And it is human instinct to want to point the finger at someone when things don’t go our way. The big fee often brings with it a certain resentment when things don’t go as smoothly as everyone had planned.
Recently, one of my agents at CORE recently closed on a transaction in which the seller was furious that the closing took so long. An email string from months ago showed how incredibly well the agent managed expectations, worked diligently on the seller’s behalf, operated with integrity, and tried to persuade the bank and buyer to close as soon as possible. All of that and the seller was furious demanding a reduction in commission. She didn’t attack the bank, her attorney, or management all of whom played a part in the delays. She came after our agent who was consistently working in the seller’s best interest.
The moral of the story: agents must manage expectations, deliver on their promises (think Amazon) and sellers must understand that with so many hands in the pot, it is very possible that someone other than the agent is to blame for any mishap.
Food for thought.
Manhattan real estate has become so incredibly sexy. From the dramatic “reality” shows to the media reports of billionaires and foreign investors gobbling up property, it has never been a more exciting time to live in NYC.
Today, Curbed ran an interesting piece on The 25 Most Expensive Homes in New York City ranging from the penultimate $118.5M potential (nope, it isn’t even one apartment yet) 3 unit Penthouse combo at The Ritz Carlton Residences in Battery Park to a Lenox Hill mansion at 57 East 64th Street for a measly $44M.
I love this articles just like the rest of the world. And a little secret, I love selling these homes too. So when i read this article, I thought I would do a quick check of the plus $50M market and this is what I found.
Despite the numerous articles and media attention given to the mega million dollar sales in Manhattan, it turns out that only 9, yes N.I.N.E. residential properties have EVER sold for $50M or more (via StreetEasy) throughout the history of New York. Compare that with the 14 that are currently on the market and it is obvious that there just aren’t as many super wealthy individuals as the press would have you believe.
I share my thoughts on how to best time the intracies of a sell/buy or buy/sell (that’s the point) move in this excellent Brickunderground piece.
I am back and so is True Gotham! It has been way too long since I have played an active role in the content and life of this blog. 6 years of running The Heddings Property Group kept me away and basically forced me (not really as everything is a choice) to sell out to outside writers which often amounted to considerable fluff. It has hardly been “dispatches from the front lines of NYC real estate,” but it will be going forward.
The Heddings Property Group was recently absorbed by Shaun Osher and The CORE Group and I have enthusiastically accepted the position of Executive Vice President of Sales for the company. This new role has me overseeing nearly 100 Manhattan real estate agents which will give me access to the front lines like never before.
I am sincerely looking forward to once again bringing you relevant and timely content on all that is the incredible Manhattan real estate market.
For those who followed this blog in the past, I am sorry for my departure from what once meant a great deal to me!
But, I’m baaaaaack!