Social Media and Doing Right by Our Clients

This past September I decided to take a break from social media, specifically Facebook. While I missed the pictures of my sister’s kids, the posts from my nephews, in-laws, my mom and many of my friends, I did not miss the political posts that contributed to my considerable loss of faith in a segment of our nation. Even more aggravating than the nonsensical diatribes on our political climate, I noticed a huge surge in the amount of egocentric posts by some of my very own real estate colleagues. Facebook Live posts from the backs of taxis, poorly acted vignettes created under the auspices of showing the social media sphere how one runs their business and even inflammatory and highly offensive personal political views are attacking many of the New Yorkers whom we serve.

We were drowning in a perfect storm of self-produced “reality” TV shows, easy access to broadcast ourselves to the masses and an epidemic of unbridled narcissism. We utterly and completely missed the point of why we do what we do – we find homes for the men, women, friends, families and children who make up the greatest city in the world.

Have we forgotten that the customer is ultimately whom we serve? In these posts, I see no mention of them, no appearance and rarely a word about them, unless it’s in effusive praise of the agent. Many may think this is funny coming from the guy who introduced the guided video tour to the Manhattan market in 2006. Yes, there were times when I was shooting where I lost sight of the fact that the video was about the property and ultimately doing my job for the customer. Fortunately, I had videographers who always brought me back to reality (real reality) to maintain focus on the task at hand: doing right by my homeowner.

I’m back on social media now. As much as some of the content remains an irritant, I see many ways in which video, Facebook Live, Snapchat, Instagram and the like can play a positive role in servicing the client and raising the bar in the real estate industry. Some are doing it right but most aren’t, in my opinion. There is a better way and I have to believe that those of us who are committed to doing right by our clients will find it.

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Outdated Sales Tactics Remain the Norm

I wrote this piece nearly 8 years ago for my blog and unfortunately, not much has changed:

PRICED TO SELL…MOTIVATED SELLER…NOW THE PRICE IS RIGHT…OWNER SAYS SELL

You can probably guess where I’m going with this before you even finish reading this sentence but here are my thoughts on these ridiculous mantras that are spewed all over my inbox on a daily basis:

  • PRICED TO SELL-isn’t this the point always?  To sell I mean?  How else would you price something?  How about this one…PRICED TO SIT ON THE MARKET FOREVER
  • MOTIVATED SELLER-one would hope that a seller is at least somewhat motivated when they decide to sell their home but just how motivated is relative.  The irony here for me has always been that when you make an offer to one of these ‘motivated-type” sellers, you find out immediately that they aren’t quite as motivated as you had imagined.  I like this one…UNREALISTIC SELLER HOPES TO FIND STUPID BUYER
  • NOW THE PRICE IS RIGHT-This one actually came in today and was the impetus for this post.  It made me laugh out loud.  The price is right when you have offers and a place sells not just because you say so.  Trust me, I always think the asking price I set is right and that is definitely NOT the case all of the time.  In fact, I have a 4800sf townhouse in Washington Heightsthat is asking the absolute “RIGHT” price of $1,500,000 (it started out at the absolute “RIGHT” price of $2.495M with another broker 2 years ago) and although we are close to a bid, it still seems that we have missed the “RIGHT” price. (2017 UPDATE: That house sold for $1.2M! I know, I know. Why didn’t I buy it myself!?)
  • OWNER SAYS SELL-this is often paired with BRING ALL OFFERS.   Now I don’t know about anyone else but ALL of my owners have said “sell.”  ALL of them!  Not one has said to me, “hey Doug, please market our home for sale but whatever you do, DON’T sell it!”

I know that you get my point here so why then are so many still (EVEN STILL in 2017) using these antiquated sales slogans to try to pique interest?  (In 2017, I believe that  most of these emails end up in spam/junk folders anyway) I have my theories of which the primary is that most people will beat a dead horse until way after they realize there’s no pulse.  Innovation and change are rarely embraced and my 18 years (NOW 25) of experience in the Manhattan real estate market has served as evidence of that.  Still no official MLS in Manhattan; no standard measure of square footage; listings data still perceived as proprietary (we have made a little progress here since I wrote this); and the industry remains one that puts its own interests before the consumer more frequently than not (this too is changing for the better but we have a long way to go still).

On a positive note, I have seen some incredibly creative marketing strategies implemented over the last several years. That said, there is no single factor that will bring about a sale more effective that proper pricing. So the next time you consider sending out an email with one of the subject lines above, first re-evaluate the asking price based on a solid analysis of current comps. You may just find that a simple “price reduction” announcement will garner more positive attention.

 

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When Should I Engage a Real Estate Agent: Buyer’s Edition

If I told you how many times I have been walking down the streets of Manhattan, sitting in a restaurant or riding the subway and overheard a conversation about someone buying, selling, renting, moving, renovating, or relocating, you probably would think I was embellishing. If you know me well, you would be absolutely positive that I was embellishing. Haha. Seriously though, I don’t think a day has passed in which I haven’t heard the “apartment” discussion or watched someone browse properties on their phone or tablet. Often times, I insert myself and strike up a conversation about their situation and am frequently surprised that the person has not engaged a real estate agent.

When is the right time to engage a real estate agent? It depends on the agent, but if it is someone who has made it their business to know absolutely everything about the geographical area in which they sell, then it is never too early. If you are at the very early stages of even considering a move, involving a savvy and sophisticated agent can help a buyer:

  • Decide if you are financially qualified to make a move (down payment, financing, etc.)
  • Decide the best neighborhoods to consider for you and your desired lifestyle.
  • Decide what type of ownership best suits you (co-operative, condo, cond-op, or townhouse)
  • Decide how much of a home you can afford in your desired location (1BR, 2BR, etc.)
  • Manage expectations of market dynamics (negotiability, bidding wars, building requirements, timeline)

All too often, a real estate agent is engaged when the buyer begins to look at properties and sometimes even deeper into the search. If you desire a more efficient process, consider enlisting the help of a real estate agent the moment you begin to dream of that new home.

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Seller Beware–Your Exclusive Agreement May Not Be Expiring When You Think

With nearly 30,000 licensed real estate agents in New York City and only about 12,000 transaction per year, it is no surprise that some less than savory agents turn to desperate measures to ensure that they make a few dollars. One such agent’s antics were presented to me this week in the form of the most ludicrous and unethical termination clause that I have seen in my entire 25-year real estate career. Let me first explain the “termination clause” to which I’m referring.

Most real estate brokerages in New York City have very similar exclusive agreements, which they ask sellers to sign granting them the exclusive right to sell a property. Firms that are members of REBNY (The Real Estate Board of New York) have more stringent guidelines and suggested language that ensure that we all play nicely in the sandbox and that, ultimately, the consumer isn’t duped by a member firm. The language that is suggested for the termination of an exclusive listing reads:

Within three (3) business days after the expiration of the Exclusive Listing, the Exclusive Broker shall deliver to the Owner a list of no more than six (6) names of persons who visited the Exclusive Property during the term of the Exclusive Listing. If within ninety (90) days after the expiration of the Exclusive Listing a sales contract or lease for the Exclusive Property is executed with one of the six persons on the list, the Exclusive Broker shall be entitled to their portion of the commission set forth in the Exclusive Listing. Owner represents and warrants that if a new exclusive listing agreement is executed with another Exclusive Broker (the “New Exclusive Broker”), Owner will notify the New Exclusive Broker of this provision and that the Exclusive Broker may negotiate directly with the Owner with respect to the Customers on the list during the ninety (90) day protected period.
Basically this entitles the exclusive agent to a commission if any of the 6 people whom they introduced come forward to purchase the property within 90 days. I think it is reasonable as do most of my colleagues and our customers. It works well in maintaining peace and fairness throughout the industry when properly inserted into an exclusive agreement. But alas, sometimes sellers sign agreements with no such language and even worse, they occasionally sign agreements with much more ambiguous or vague language keeping them on the hook contractually for extended periods beyond the end of the original agreement.
Just this week, one of my agents sent me one such agreement. She is preparing to bring a multi-family property to market and was shocked when she received the previous agent’s listing agreement and the “protected list” from her sellers. I think it is imperative to also mention that the sellers are elderly in their late 80’s and their son is retired NYPD. These are normal everyday people. Here is how the termination language reads in the previous agent’s agreement:
In the event that: (i) at any time during the term of this Agreement a sale of the property, upon terms acceptable to us, is made with any prospective purchaser to whom the property is submitted by (a) previous broker name, (b) us, or (c) any other party; or (ii) at any time up to six (6) months after the expiration or termination of this Agreement a contract of sale is entered into, or sale of the Property occurs, with any prospective purchaser to whom the Property is submitted during the term of this Agreement, then we agree to pay Previous Broker Name its full commission at the closing sale of the Property (the “Closing”). Previous Broker Name shall submit to us no later than fourteen (14) days after the expiration or termination of this Agreement a list of these prospective purchasers (the “Protected List”). Notwithstanding the foregoing, the failure of Previous Broker Name to provide the Protected List shall not relieve us our obligation to pay the Commission (hereinafter defined).
Some may think the differences between the two termination clauses are subtle but they are indeed vastly different. What does “submitted” even mean? Well in this case it actually means submitted! Go figure. The previous broker showed the property only two times yet the “protected list” that the previous agent provided to the sellers not only names several specific individuals but also names complete firms. In fact, the agent listed every single firm to which she “submitted” the listing during the term of the exclusive. This means that for the next six months, if any agent from any of those firms (nearly every firm in New York City) brings a purchaser to this property, the Previous Broker Firm will come after these elderly sellers for a commission. Unethical? Disgusting? Desperate? All of the above.
The moral of the story: pay close attention to the language in your exclusive agreement that may bind you to your agent and their firm beyond the regular term of the agreement.
And as for the agent and the Previous Firm, Henry David Thoreau comes to mind:
“The mass of men lead lives of quiet desperation, and go to the grave with the song still in them.”
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Not All Brokerages Nor Agents Are Created Equal

I have written before about the importance of company culture as it relates to the success of a real estate agent and ultimately a positive experience for the consumer. If that fit is not mutual for both the company and the agent, it is akin to trying to fit a square peg in a round hole; it will ultimately have a negative impact on all parties. Not every agent fits with every company nor do all companies make sense for all agents. Some agents thrive in a large corporate environment with little support. Others prefer a mom and pop shop of just a few agents, where they know their colleagues intimately and receive personal attention from the broker/owner. Still, others find the medium or boutique brokerage most appealing. I’ve said it before and I will say it again, you often don’t know that you are in the wrong culture until you actually discover the right one.

As the Director of Sales at CORE, I am tasked with recruiting the “right” agents who will ideally thrive in our very supportive and collaborative culture. For every 20 people I meet, I may offer two the opportunity to join us. And maybe one actually does as most do–fear change even when it is the very best thing for them. In determining if an agent is a fit for CORE, and vice versa, the intangibles often come into play. Energy and spirit are huge factors in determining if someone will fit our culture; more often than not I get a gauge of that within minutes of meeting someone. Sometimes it is as soon as the handshake and the smile.

Last week, I had the sincere pleasure of meeting one such individual who has been in the industry around 25 years, just as I have. As is often the case, she was introduced to me by one of my favorite and top-producing agents who believed with every ounce of his being that this person was a “fit” for CORE. Two minutes into our meeting, I made her an offer. Our meeting continued for nearly 90 minutes in which time she solidified my early opinion of her. There is no doubt in my mind that she would thrive in our collaborative and supportive environment, and it would be a sincere pleasure to take an active role in helping her further develop and grow her business. She and CORE are a culture fit! That can only mean good things if we get the opportunity to work together.

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Traditional vs. Tech Brokerage: A Hybrid is the Answer in Today’s Real Estate Marketplace

Yesterday I was privy to an interesting war of words regarding a LinkedIn post. The two sides ultimately battled over whether a traditional brokerage model or a tech-centric model would fare better in today’s real estate environment. The comments were incredibly revealing with one member of a deeply entrenched, once traditional brokerage clearly pointing out that adaptation is necessary to provide the best service to the consumer and ultimately cement the survival of any company in today’s real estate industry. I couldn’t agree more that a hybrid of tradition and technology best serves the consumer.  The traditional broker who turns a blind eye to technology better rethink the ways in which they do business or suffer extinction.  Similarly, the tech-centric brokerage that spends all of their dollars generating leads for agents with little concern for the quality of customer service they are providing is also doomed. Both models will fail independently without the other. Let’s take a look at the pitfalls of each:

Traditional brokerage:

  • A real estate company that focuses on its brand more than the consumer.
  • A real estate company that is highly leveraged with office space and expensive leases.
  • The real estate company that continues to make promises to its agents that it can’t deliver due to corporate bureaucracy.
  • The real estate company that decreases dollars spent on the consumer in an effort to maintain profit due to high overhead.
  • The real estate company who is “trapped in the box” with no ability to truly see “outside of it.”
  • The real estate company that claims to embrace change all the while avoiding it like the plague.
  • The real estate company that talks the talk but resists walking the walk.

Tech-centric Brokerage:

  • The real estate company that puts all focus on its agents with no regard for the consumer.
  • The real estate company that spends a majority of their dollars on lead generation for agents and not marketing property for their customers.
  • A real estate company that hires agents blindly creating an opaque environment that often negatively impacts the consumer.
  • A real estate company that claims that their technology is consumer-centric with only an eye on the company’s bottom line.
  • The real estate company that talks the talk but resists walking the walk.

If there is one thing that seems to get lost in the battle of the brokerages to stay relevant and profitable, it is the consumer. There is no substitute for high touch customer service when assisting someone with the purchase or sale of one of, if not the largest asset in their portfolio. Sophisticated consumer friendly technology should be a welcome addition to the customer experience. But high touch and high tech do not have to be mutually exclusive which is why CORE will be launching a new and exciting listings platform that will allow consumers to collaborate with their agents while simultaneously receiving the outstanding high touch customer service for which CORE and its agents are renowned.

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Avoiding Drama in Today’s Complex Real Estate Market

If there is one word that I would use to describe the current climate of the New York City real estate market, it would be complex. It seems that most every deal is posing different challenges.  From buyer, seller and even agent and attorney posturing, to financial curve balls from banks, and co-op board and managing agent interventions, all too frequently an unnecessary wrench is being thrown into the transaction process. It has been my experience over the years that there are several best practices that anyone involved in a transaction may implement to maintain peace and harmony through the closing:

  1. Manage expectations: communication is key here and it is imperative that all parties are informed of possible hurdles before having to leap them. When all else fails, think Amazon and under promise and over deliver.
  2. Remove ALL emotion: Emotion creates drama and drama has no place in a real estate transaction. Check yourself regularly to make sure that you are not being driven by your feelings.
  3. Let go: No one person in a transaction controls all facets. Don’t attempt to control the deal nor the people involved in the deal.
  4. Be professional: Be mindful of being of service to your customer and others involved in the transaction which leads to the final point…
  5. ADD Value: Ask yourself throughout the transaction if you are an asset or a liability and make every effort to add value to the transaction by practicing the 4 points above.

It is possible to have a smooth real estate transaction, but in order to do so, all parties involved must let go of any potential drama and remember that the ultimate goal is to peacefully trade real estate. Not always possible but definitely more so than many believe.

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History Repeats in Manhattan Real Estate

Once upon a time, I suggested that a client strongly consider a purchase at 15 Central Park West. That client barked at me that she “would NEVER pay $2,000/sf for an apartment in Manhattan! That is just absurd!” Since then, that unit has traded multiple times for as much as $8,000/sf.

In 2003, when my wife and I purchased our current home, the New York Post ran a two page spread complete with a full page photo of me in a “Superman” stance titled, “Buyer Shootout.” The piece covered the bidding war climate by which we were directly impacted and the buyer’s remorse that hit even people like me in the real estate industry. Our home has appreciated by nearly 300%.

There is no denying that the appreciation seen over the 25 years that I have been selling real estate is more than remarkable. Of course I could share anecdotes of those who were forced to sell in a down market for a loss, but there have been some prevailing themes in the past quarter century:

1. Location, location, location with the greatest opportunity in areas that are explored by pioneers like artists and other creative types (Soho, West Village, the Lower East Side.)

2. Don’t dismiss a big name architect or developer. (Robert A.M. Stern has the golden touch. Pair his masterful design with a location like 15 Central Park West or 70 Vestry and you can’t go wrong).

3. Look at opportunities for infrastructure growth. (Riverside Boulevard on the Upper West Side will see more shopping, movie theaters and even schools in the coming months.)

This brings me to my recent visit to Hudson Yards. WOW! Mark my words that this new enclave is going to be a destination community sought by people both in and out of Manhattan. Many of the residences will be enjoyed by the likes of employees at KKR, Blackstone and Millbank Tweed. Others will be occupied part-time by both international and domestic owners who simply want a Manhattan escape that will provide some of the best restaurants, shopping and culture in the world. The most impressive new development project in the United States, Related’s Hudson Yards will feature indoor and outdoor performances and concerts in the Shed, beautiful parks and open spaces, navigable artwork in the form of Thomas Heatherwick’s Vessel, and a seamless connection to the Highline which carries you past Zaha Hadid’s New York signature masterpiece and through West Chelsea to the Meatpacking District.

This may seem like a bold statement and only time will tell, but the residences at Hudson Yards are going to see long time appreciation in line with the 300-500% increases that I have witnessed in my 25 years in this business. Mark my words – many will look back and wish that they had the vision and courage to take the leap now. Closings are only 18 months away.

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Why I Live in New York City

My wife makes me! That is all. No, seriously, my wife was born and raised on the Upper West Side of Manhattan and made it clear to me that she wouldn’t likely ever have the desire to leave Manhattan. I migrated to the Big Apple in 1989 from the suburbs of Baltimore. Prior to my move, I had never even visited “the city” as the natives refer to her and I met my wife
in 1992 so the rest is history. Many of my friends and family are baffled by our residence in New York and frequently ask questions like, “how is it raising children in the city?,” “isn’t it noisy/dirty/scary?,” “how do you afford it?”

The parents of the girls on my daughter’s soccer team will tell you that I frequently dream of living in a big house in Montclair, New Jersey with some grass and maybe even a pool. But the reality is that every time I begin to get swept away in the day dream, I realize how incredible the last 28 years have been for me as a resident of “the city.”

• The food and restaurant scenes are unparalleled and on a practical level, there just aren’t too many places where the daughter can have Chinese, the wife sushi, the son Mexican and I Indian all at the same dinner table. And given that my wife cooks about 4 days a week, she is able to shop on her way home from work for the freshest ingredients straight from some of the best markets in the world.  Most of those markets deliver too!

• According to a
quick Google search, there are upwards of 100 museums in New York City. My daughter and her grandfather are in the process of visiting them one at a time whenever he’s in town from Santa Cruz.

• Broadway and Off-Broadway shows are just a short 30-40 blocks from our home. My wife and daughter have seen Wicked twice and we were even blessed this year to score 2 face value tickets to Hamilton so that our son and daughter could attend together. Kate and I also scored 2 face value tickets separately and wow, what a show!

• My almost 16-year-old son has been traveling by subway to and from school since he was 9 (full disclosure, we followed him for the first couple of weeks until he proved he was ready.)

• Our kids have MANY friends from diverse socioeconomic backgrounds and cultures and they don’t feel the need to discuss those backgrounds. They are just simply friends.

• My 13-year-old daughter does not go to the same school as her older brother because they are very different people. Both schools are well suited for each of them. That choice is invaluable!

• The city truly NEVER sleeps!
If you want a hamburger at 5AM, the diner or corner deli will happily oblige.

• The infrastructure is incredible. This city is never paralyzed by weather and rarely are people rushing out to buy bread and milk before a blizzard. You can likely have it delivered in the middle of a blizzard.

• Yes, it is expensive but you can also earn a very handsome living here.

Basically, the availability and convenience of just about everything makes me appreciate the life that I have here with my family and serves to wake me from the day dreams of suburban bliss that so often permeate my mind. The grass is not always greener.

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Buying or Selling a Manhattan Co-op

A simple question posed on social media last night made clear that many still long for an explanation of the co-op buying process in NYC. So I am re-sharing this TrueGotham post from November 2009:

Here is a step by step guide of what to expect from the point a contract is sent to a buyer’s attorney until that glorious day at the closing table. And don’t forget to review your closing costs early on in the process so you have no surprises.

1. A contract is sent to the buyer’s attorney from the seller’s attorney from a boiler plate form with attached suggested riders

2. The buyer’s attorney does their due diligence for their client which consists of but is not limited to reading of the Co-op Board minutes, reviewing the building financial statements, offering plan, proprietary lease, and house rules.

3. The buyer’s attorney then marks up the contract with suggested changes and it goes back and forth until both attorneys agree on language.

4. Once the contract is finalized, the buyer will sign and provide a 10% deposit check to be delivered to and deposited in your attorney’s escrow account until closing.

5. The seller will then sign the contract.

6. Once the contract is fully executed (signed by all parties), it is delivered to the buyer and they have typically 30 days to submit their application to the Board with their mortgage commitment letter.

7. The seller’s real estate agent reviews the board application and almost always has to request additional documentation or changes which takes approximately 1-5 business days.

8. Multiple copies of the application are made by the real estate agent and delivered to the managing agent.

9. The managing agent then takes 1-2 weeks to “process” the application running credit reports, etc and then they disseminate to Board members.

10. Board members then review the purchase application and all supporting documentation to determine if they will interview. Members may choose to review and give their opinions via email, they may require a discussion to take place at a set monthly meeting time, or they may decide to review packages together on an as needed basis.

11. Assuming they find the application acceptable, a notice of interview date can come anywhere from 1 week to month after Board receives package from management (this is where a seller can reach out to board to kindly request them to expedite the process).

12. Board interviews buyers

13. Typically approved within 1-3 business days but some buildings take longer.

14. Closing is then scheduled to take place approximately 10-14 days after approval or as stated in the contract (most Manhattan deals NEVER close on the date specified in the contract).

Lastly, it is imperative to mention that banks are also slowing the process considerably these days with tighter lending standards.

So realistically, one should expect a closing of a Manhattan co-op to take approximately 2-4 months from the time a contract is sent out. Having said that, things like holidays, vacations of Board members and other pressing business that a Board may have to address are all factors that can lead to further delays.

Hopefully this will help to manage the expectations of all who are venturing into the sale or purchase of a Manhattan co-op.

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