Heddings defends his blog post criticizing Hamptons market

Tuesday, October 04, 2011 | Source: The Real Deal

It has only been 6 months since our office started operations in the Hamptons and I can tell you that this market is in desperate need of an overhaul  and a shift in perspective from both consumers and real estate agents.

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21 Responses to Heddings defends his blog post criticizing Hamptons market

  1. avatar Miriam says:

    this is all about the double dip and not sharing commissions – it is the worst real estate estate behavior their can be.

  2. avatar Donna Dazzo says:

    Maura, I also think that it is not in their sellers’ best interest to NEVER suggest staging a vacant property or having a professional come in and do a home staging consultation on an owner-occupied property.

    I market my staging services in both Manhattan and the Hamptons where I have a 2nd home, and in 3 years I have had maybe ONE staging consultation. I rarely even get calls for proposals on staging a vacant property. And it’s not like the home staging business is going to other stagers – it’s not.

    It is mind boggling to me that Hamptons real estate agents think they can sell properties as is, and not do everything they can for their clients to make the homes they are selling look better and more appealing to the potential buyer.

  3. Doug, the old school mentality and anti-MLS, pocket listing sentiment that even clients buy into is incredible to me. The idea that keeping a listing “exclusive,” in-house, and not cooperating with other brokers to get it sold as being in the client’s best interest is the worst case I have seen of 2+2=5.

  4. Amen Phil. And the negative reactionary comments on the Curbed post of this are quite telling!

    http://hamptons.curbed.com/archives/2011/09/27/is_the_hamptons_market_philosophy_bass_ackwards.php

    I know for a fact that the consumer is so fed up with the ways of business out there that things are changing already.

  5. Wow… I’ve heard that the Hamptons are “unto themselves” but this is above and beyond my wildest expectations. Now, there seem to be elements of this in all high-end markets – though the lack of MLS – which levels the playing field by providing a central database – exacerbates the issue a great deal. Nevertheless, I see plenty of agents in my area listing homes as buyers bait or to add to their listing “collection” – as if the house involved is just a tchotchke.

  6. I looked at several houses in the $2,000,000 range this week in Southampton. There were no show-stoppers and, as a matter of fact, every property I viewed would most likely appraise in the $500,000 (or way less!) range in a less hyped locale. A multi million dollar shack is the price to pay for the luxury of non-stop traffic jams, hours long waits for mediocre food at “chic” restaurants, and the off chance of running into a “B” level reality star at the local ice cream haunt.
    Local agents say the market is booming- then why does it seem that every other house in town is for sale? Also, when will local brokerages realize that floor plans are a must for any savvy NYC buyer? Go the extra mile and maybe even sell a house!

  7. avatar Francesca Grasse says:

    Ha! I love your attitude and you are right on the money! I live and work in a unique MS coastal area and we usually list and sell upscale properties and it never ceases to amaze me how completely “head in the sand” local agents are! I recently attended an open for a 2.495 here in town and 10 mind you 10 agent/brokers showed up….oophs guess they don’t believe in the “next call”! Best to you and your group in the Hamptons! Keep the faith SERVICE is the only way to ensure success! Truth and intergity-the only way to go. The immediate commission is a stepping stone not the end all be all.

  8. avatar Alex Cortez says:

    Absolutely shocking. I never would have realized that such a high-end market would be cannibalized to that extend by such a greedy group of real estate ‘professionals’. We also have a big problem with ‘collecting listings’ in my market, but it seems as though the Hamptons air of anti-cooperation is #1 in the country.

  9. avatar Phil says:

    Douglas’ post is accurate in both content and context; however, there are some additional elements worth noting:

    The majority of Sellers have no clue about the chicanery and sinister behavior the cartel brokerages on the East End engage in. And judging from the ineptitude of responses from similar articles in both The Real Deal and 27 East, as well personal conversations with many, it’s self-evident many brainwashed agents don’t either. They get away with unscrupulous behavior because they know that all Sellers want to do is sell their home, and are deferential to local firms, especially the big ones. Most homeowners aren’t aware and could care less about fiduciary, NY State or Federal Trade law. So as long as Corcoran, BHS, PDE, T&C, Sothebys and the rest of the OREX gang operate with impunity, and keep customers in the dark, nothing will change. Capable agents shut out of the market by sanctioned turf wars need to join forces and get getting changes made at LIBOR, Albany, and even the DOJ.

    Likewise, Buyers just want access to the available listings. They really don’t care whether they purchase through this oligarchy, who — unbeknownst to them, operate predominantly as Agents or Sub-Agents of the Seller, whose fiduciary obligation (eyebrows raised) is to the homeowner and NOT them. And even if Buyers knew what a Buyer’s Representative can do for them, would they have a choice? How many Listing Agreements pay out a Buyer’s Broker commission? Would they pay the Buyer’s Agent commission? How many Hamptons agents even know what Buyer’s Brokerage is? In depth. I’ll fund the survey if someone will help administer. We can publish for the world to see.

    There’s been a perfect storm for Hamptons brokers since the gold rush; a combination of public ignorance, reluctant acquiescence on the part of smaller local agencies, shoulder shrugging by those part of Long Island MLS, and a closed listing system which leaves Buyers and Sellers with no compelling alternatives. But when the whirlwind of activity dissipates in a declining market, agent weaknesses, personally and professionally are exposed. Hence the desperate measures alluded to and the frequent dishonest tactics employed when easy money doesn’t walk into the office anymore, bolstering once promising careers of overpaid order takers.

    Ask yourself if 10 other brokerages had unencumbered access to this market, as they do anywhere else in the country, without paying the rapacious setup and yearly fees to OREX, how quickly 6 percent goes to 4, and pricing (and market share) heads toward equilibrium.

    Sadly, i believe most agents within this system live in a bubble, believing they are privileged individuals who have been granted immunity to market forces. But fish rots from the head first. It’s the culture trickling down from upper management. I recall two years ago, the MB of a Sag office tell her listing agent that they couldn’t co-broke with another Sag agent, a local of 28 years, whose license happened to be with RE/MAX in Nassau at the time. And they had a ready willing and able Buyer. Shame on her!

    Un-CORC the Market!

    I know of another elite Hamptons agent who could be in JAIL right now, at the very least had her license revoked by the State, if their former client pressed charges on them, and would have … placed one of the largest firms in deep excrement. But people simply don’t want the aggravation… nor have time or patience to fight these unprincipled, deep-pocketed, blue brokerage houses on the corner.

    On another occasion, I was introduced to a lemon lime kool-aid drinking agent from the invisible Trust, who called other agents “up the Island” a nuisance. Yet she was born and raised in Western Suffolk!! The megalomania is contagious. The hypocrisy endless.

    “We get 6% honey. We don’t work like everywhere else”

    Burn the canal….after I cross it.

    Stories abound.

    If they had to compete in a market that wasn’t so insulated, I would wager over 50% would fail to stay in the business. And that’s with negligible yearly carrying costs. I’ve personally worked with over 275 agents in the Tri-State area in the last 5 years, and many of my clients eclipse Hamptons agents in both their wisdom, integrity, and work ethic.

    Just like the central reason this country is a superpower….geography matters.

    In closing, I speak this message from personal experience. As a resident of Sag Harbor for over two decades, and a real estate marketing professional for another, a large class of (should i say that word in the same sentence with) Hamptons brokers are not only misinformed of their legal obligations to Buyers and Sellers, but flagrantly flout the law. To be sure, there are honest brokers who uphold their license with integrity. And on the flip side, there are brokers in other markets that surely engage in shifty business practice. But out East, unlike virtually every other place in the country, it’s sanctioned and goes unpunished.

    No regulation.

    It’s time that everyone who has a stake in this fight to simply stop allowing these corrupt practices and demand an open market. Let’s pierce the myth that “The Hamptons” (so 90s) is some mysterious marketplace where only local agents know how to navigate its ebb and flow.

    It’s a demonstrable falsehood, one easily refuted, and something that is worthy of our collective efforts.

    Anyone in?

    facebook.com/philip.mario

  10. avatar e says:

    Bravo! This is a great post and thread… Phil you said it very eloquently. It is truly a disservice. This should be required reading for anyone looking to buy or sell in the hamptons.

    Also, what ever happened to the lawsuit filed by George Simpson? And how does Nick Khuri have such power? His system is awful.

  11. Don’t know status of Simpson’s suit but i will tell you that I have had a very positive experience with Nicholas Khuri at RealNet and he is the only game in town.

    • avatar e says:

      The only game in town… That’s the problem. In a market where the MLSLI should be used and enforced it is not. Nick’s system holds the participating brokerages hostage and only exasperates the problem of pocket listings and lack of information. I am glad to hear his personal skills are getting better though:-) Good luck Doug, the Hamptons’ needs your voice and commitment to excellence.

  12. avatar Get a Real MLS System says:

    Nick Khuri produces a website that’s perfectly fine as a public portal. It does not include things that a professional Realtor needs in order to conduct business with professionalism with buyers and sellers, such as days on market, access to public records, closings in the last 24 hours, price reductions, etc. Nor does it provide an offer of compensation for Realtors who find the same benefit of presentation on equal sites, such as Streeteasy, Zillow, Trulia, etc. There is no site to go to, for Realtors who couldn’t care less about a local website like HREO or Orex, to go to, to figure out if the listing broker is paying a co broke to, for example, a buyers agent- so, no assurance of payment.
    The brokerages have made a choice- and are not hostages- to avoid a real MLS, whether it be MLSLI or HANFRA, because MLS data provided appears to be far too transparent for their liking- which is a detriment to buyers, sellers and Realtors.
    Heaven forbid the real days on market be accessible to those outside of the Corcoran internal listing system (they actually report closings culled from public record closing providers *up to 3 months old* rather than maintain current *24 hours old* closings from all companies as a real MLS does). HREO and orex are perfectly fine local sites- but I’m guessing that Zillow costs a whole lot less.

  13. avatar Bill Carroll says:

    WOW! well knock me down and call me shorty. I have great admiration for tree shakers. Especially when their right. Mr. Heddings, welcome to the Hamptons may you live long and prosper. I have danced at this hoe down for the last ten years, much of it as a typical listing and sellers’ agent. Three years ago, I had had enough and started to walk away from the madness.But indignation got the best of me and I made a u turn, back into the frey. This time as the Principal Broker of the only Exlusive Buyer Brokerage on the East End – totally dedicated to representing buyers. To Phil’s point, many agents are either too arrogant to take the 19th amendment seriously, or too ignorant through lack of education to even understand buyer brokerage. And it starts at the top.As far as getting into to show houses, it is against the law to prohibit me while representing clients, and as far as getting paid, once the owner knows I have a ready willing and able buyer, they are happy to direct their listing broker to split comision with me, usually while directing a look of puzzlement towards their agent. Ahh, I can feel the change coming.
    Bill Carroll
    Hampton One Real Estate Group

  14. avatar Drew Meyers says:

    Sounds like the Hamptons market is just perfect as it is. Not 🙂

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