We’re opening an office in Southampton (via Curbed) October 1 and very excited about the prospect of working with all of our clients who have homes in both Manhattan and the Hamptons. We are also not naive and realize that we are entering a very different market where cooperation among firms and sharing of listings data is actually being investigated by the Department of justice.
That said, as is our consumer-centric philosophy always, we will share our listings information with EVERYONE who has a real estate license. We will also disseminate all of our information on all listing platforms available to us as well as sharing the property information via listings syndication on over 50 websites in over 30 languages on an international level. Just as we do in Manhattan, we will put our clients first and ensure that our entire team’s interests are aligned with those of our sellers and buyers.
This is an incredibly exciting week for Manhattan real estate buyers, sellers and agents as Noah Rosenblatt of UrbanDigs. Nooah is launching his brand new and incredibly sophisticated site this week that will allow all of us to track Manhattan real estate market data real time for a variety of parameters including but not limited to apartment size and location. Alas we don’t have to rely on heresay and anecdotal information to get a pulse of the market. Thanks Noah!!!
Jhoanna Robledo of New York Magazine discusses the new UrbanDigs in today’s piece Be a Quant – A new website lets you mine real-estate data in real time. We ran its first test drive.
Noah Rosenblatt—the broker behind the popular UrbanDigs blog—is looking to change that. At its relaunch, scheduled for this week, UrbanDigs.com will be devoted to data analysis, allowing users, for $20 per month, to track market shifts by neighborhood and price in real time, create trend charts, and chat about what they’re seeing. You can (to give a simple example) keep a daily watch on the inventory of listings in your area, and compare the trend with previous years or other parts of the city. If you spot a sharp change, you can adjust your price or schedule an open house immediately. You can break down data in dozens of other ways, too. Instead of waiting for quarterly reports from the brokerages, you can generate up-to-the-minute ones.
I LOVE THIS!!!!
The impetus for this re-post today is the fact that in the months of July and August, our team has received multiple bids on several properties with some of those properties going to contract and selling above the asking price. So what you say? This just proves once again that no matter the market conditions, proper pricing does indeed overcome all objections!
Take a look at these 2 past posts from TrueGotham from February and March 2007 both of which also feature comments from real estate expert Jonathan Miller on the importance of pricing properly:
So no matter the market conditions, strategically pricing a property in a way that provides the perception of value is still and will always be the way to go.
if there is one thing I know for sure after all of the barbecues, cocktail parties, and various summer get-togethers, it’s that everyone has an opinion about the real estate market (I repeat, there is not ONE national real estate market). So what do all of these (mine included) anecdotal opinions mean? They simply prove that the perception of what is currently happening in anyone’s specific hyper-local real estate market is greatly influenced by the media, in the trenches personal experiences, and general real estate industry chatter.
Let’s break down the legitimacy of all three:
1. The Media: I LOVE the media!!! I think it is incredibly powerful and in the hands of responsible reporters can serve the consumer very well. But often times reporters of "man bites dog" scenarios are much more effective at negatively skewing perceptions about housing and the economy. In my almost 20 years of selling Manhattan real estate, never has the media been so powerful in swaying public perception about housing on a daily basis. The number of emails and phone calls is directly proportional to positive or negative news stories about housing, the stock market, mortgage rates or the global economy. That said, some excellent reporters are out there doing their very best to stay ahead of the curve and report current trends which leads to a more informed consumer. Even bloggers like Noah Rosenblatt at UrbanDigs are among those leading the way towards transparency and accurate reporting of current market conditions.
2. From the Trenches: Anecdotal at best, this information is only as dependable as the person sharing it. For instance, a savvy and knowledgeable real estate professional, appraiser and market expert like Jonathan Miller provides useful data and anecdotes that give incredible insight into current market conditions as well as forecasts for what’s to come. A sophisticated broker or real estate agent with real time experience in a specific market can also provide useful information. But a broker or agent who is in "desperation" mode trying to keep their business afloat is not typically a good source for market conditions.
3. Industry Chatter: This in my opinion is often the least reliable as egos almost always get in the way of reality. No broker/agent wants to discuss when their business is suffering and my experience has almost always been that when i share with someone that volume has slowed, they get most uncomfortable and either change the subject or throw me some open ended statement about how busy they have been.
So I think what I’m trying to say here is that we truly always must consider the source of the information we are getting on current market conditions. From anecdotes about multiple bids to properties languishing on the market for months and months, we can’t decipher a clear picture of what is happening in our local real estate market.
The many micro markets that span the island of Manhattan are NOT a specific news story, a specific real estate agent anecdote, or even the combined "theories" of real estate professionals across the city. The best and clearest snapshot of what is happening in ones local housing market comes from interpreting a plethora of data and information that comes from sources deemed to be reliable. An excellent real estate professional can help navigate this information but don’t put too much weight in our opinions.
Colleague, friend and champion of transparency and digital media in the real estate world has passed today. God bless you and your family Joe Ferrara. You will be missed!
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College professors strongly recommended, on a daily basis, going directly to graduate school due to the daunting economic environment. That made it so much more difficult to proudly admit that I was looking forward to a real estate job immediately upon graduating. The frustrations throughout this past year have made me question, more than once, the decision I made. Working to my fullest potential, marketing myself as best I can, and completing tasks with the same passion needed to succeed in this business hasn’t awarded me with the monetary fulfillment I had anticipated. I am in no way suggesting that I expected to make 6 figures my first year in the industry – especially not in the type of market I came into. However, as I can only compare my paychecks to those of my friends who are also starting out in the workplace, the differences between a commission based vs. salary based job seem to be endless.
Though my frustration seems at times overwhelming, it has only driven me to work harder. I have the privilege of working with an incredible team, and have gained immeasurable knowledge and experience in the short time I have worked here. It often makes me feel like I have been in the industry longer than I actually have and is therefore frustrating when I do not have a bank statement that accurately reflects those feelings and the hard work. I am so grateful for and cannot think of any better partnership than the one I have with Douglas Heddings, President and founder of The Heddings Property Group. Being taught by and working alongside a top-ranking, well-known, respected broker who has been in the industry nearly 20 years selling real estate has provided me with experiences incomparable to the aforementioned friends of mine working in larger-scale, more corporate firms. The Heddings Property Group is a cohesive unit, one with a collaborative and supportive environment, where integrity, expertise, character, and creativity are all valued and rewarded. So, in effect, I not only have Doug’s 20 years in the business supporting me, I have an entire team, adding up to about 50 years in the business, ‘behind me’.
I love what I do. Real estate is my passion. I will continue to push myself through the frustrating times because I know that through my hard work, dedication, and perseverance, I will become a better real estate salesperson. Serving my clients as thoroughly and as best as possible is my number one priority, so as long as I continue to believe in myself, I know they will too.
Key Mortgage/Real Estate Related Provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”)
1. Consumer Financial Protection Board: Creates a council of regulators to oversee the financial system and look for major risks. It will be under the control of the Federal Reserve and have broad oversight of financial products and far-reaching powers to ban abusive products or practices. The agency will oversee banks, mortgage lenders and credit card companies. The major mortgage related laws they will regulate will include RESPA and TILA (now administered by HUD) and HOEPA HMDA and probably ECOA as well. Authority from other entities that supervise this industry such as the Federal Reserve, FDIC, Federal Trade Commission, Office of Thrift Supervision, HUD,
etc. will be transferred to the CFPB within 12 months of enactment of the Act.
2. Appraisals: Provides for the expiration of the Home Valuation Code of Conduct (“HVCC”) within 90 days of enactment of the Act. The HVCC prohibited mortgage brokers from ordering appraisals to avoid undue influence on the process. The CFPB will establish standards for the appraisals and appraisal management companies. Hopefully, it will permit appraisals to be portable for a consumer so that a consumer could switch lenders and use the same appraisal. Presently, each lender uses its own appraisal management company or companies so a new appraisal is needed if loan is declined or if lender is changed for any reason.
3. Eliminates Stated Income Loans (i.e. where borrowers offered no proof of their ability to make mortgage payments): Lenders will be required to obtain proof from borrowers that they can pay for their mortgages. Borrowers will have to provide evidence of income, though tax returns, payroll receipts or bank documents. It creates a “reasonable ability to pay test” that all borrowers must be able to meet to get a loan. There will be a presumption that this test is met for loans made by Fannie Mae or Freddie Mac know as “conforming loans” (“Conforming Loans”) and FHA loans. However, this presumption will be rebuttable. There is an exclusion as to required proof for reverse
mortgages and bridge loans.
4. Prepayment Penalties: Eliminates prepayment penalties for early repayment of the principal amount on a loan for adjustable rate loans and other more “exotic” products like interest-only loans. On Conforming Loans, they will be restricted to no more than 3 years and 3% of the principal balance. As Fannie Mae and Freddie Mac do not charge these fees any way on the Conforming Loans, there will be little effect on most fixed rate loans in amounts below $729,000.
5. Mortgage Broker Fees: Known as “anti-steering” provision. Mortgage brokers are prohibited from putting borrowers into higher interest loans and products than they qualified for so as to earn additional fees. Under the Act, fees cannot be paid to mortgage brokers based on either the interest rate or the loan terms.
a. Amount of commission will be limited to a commission based on loan size with bonuses on the volume of loans that are originated.
b. Example: Bank A will pay all brokers 1% commission on any loan that is originated. Any broker originating more than 5 loans per month will receive an extra .25%.
c. Mortgage brokers cannot receive some of their fee from the borrowerin the form of points and other portion from the lender as yield spread premium (“YSP”). If they receive any YSP from the lender they are prohibited from charging points to the borrower.
6. 3% Limit on lender/broker points and fees: A borrower will not be allowed to pay more than 3% of the loan amount in points and fees on the loan with certain exclusions:
a. Up to 2% may be paid as discount points if the interest rate is reduced; and
b. Private mortgage insurance (or PMI) premiums are not included in limit.
7. Licensing: All mortgage loan originators must be licensed and must put their license information on all documentation. This is known as “duty of care.”
8. Retention of 5% of loans made by banks and mortgage banks: Banks and mortgage banks will be required to maintain at least a 5% economic interest in the mortgages that they originate. There will be an exemption from this 5% retention for “qualified residential mortgages.” The exemption is going to encompass those loans that have traditionally had a lower risk of default. This is likely to include Conforming Loans and FHA loans. However, the exact definition of “qualified residential mortgage” will be determined later in the rules and regulations to the Act.
9. Treble damages for violations of Act: Mortgage brokers and other loan originators will be liable for up to 3 times the amount of compensation they received for violating the provisions of this Act plus costs and reasonable attorneys’ fees. This specifically relates to the anti-steering provisions and “duty of care.”
10. Adjustable Rate Loan Disclosures (i.e. ARMs): Lenders will have to disclose both at closing and 6 months prior to first adjustment the maximum amount that borrowers could pay on adjustable-rate mortgages as well as index, adjustment and new monthly payment.
11. Post Closing/Servicing Issues:
a. Escrows: Mandatory now on some loan products
b. Pay-Off Letters: Must be provided timely but no more than 7 business daysafter request for one.
c. Payment crediting: Payments made by borrower must be credited by the lender as of date of receipt (with certain exclusions)
d. ARMs-Monthly statement is required to be sent to borrower on these loans
e. Foreclosure defense: Borrower can assert as a defense in a foreclosure proceeding that either the anti-steering provisions or ability to repay provisions were violated.
Daniel M. Shlufman, Esq., President and General Counsel, FCMC Mortgage Corp.,
[email protected] (973) 574-0900
I’m blogging because I can!
Not because I don’t have plenty of other things to do today relating to Heddings Property Group expansion, but the peace and quiet being felt in the office right now is reminiscent of the Manhattan real estate market of the mid 90’s and that is granting me the few moments necessary to share some market commentary.
It is often easy to forget that the calm that exists in the summer months is perfectly normal, or at least it used to be. See, for those of us who have been in the industry since well before the last 10 year housing boom, we remember the lazy summer days where we stood chatting around the water cooler just waiting for the phone to ring (not recommended in 2010). Those days vanished as the market picked up steam and brought us 12 solid months of steady activity for nearly a decade. During that boom period, we were traveling at 80+ mph and now that we’re back at the 55mph speed limit, it hardly feels like we’re moving. By the way, we hit about 70mph just this past Spring.
The market is what it is and today it is a market with still historically low interest rates, recession adjusted prices that seem to have stabilized, patient buyers with very little sense of urgency but many of whom very much want to move, and sellers who have adjusted their perception of market conditions to those much more in line with reality.
My advice:
Sellers:
- Pay very close attention to recent sales and signed contracts
- Don’t drink the kool-aid that the market has already recovered. We are definitely stable right now and that is in large part to insanely low interest rates. Only time will tell if we are in the midst of an early recovery.
- Don’t necessarily buy the "Fall market is better to sell" line. Although there are typically fewer buyers searching in the summer, there is also less inventory in summer. The Fall market usually experiences a significant bump in inventory only to be forced to patiently wait for buyers to return from what has become a much longer summer season than in the past.
- That said, if you want to sell, take all offers seriously and don’t take low offers personally. Try to find out the perspective of the bidder making the low offer.
- Try to keep negotiations moving forward and dialog open.
Buyers:
- You can actually relax a bit taking some time to consider what is best for you. Only 2 months ago, many buyers were once again caught in bidding wars. This is not the case this summer.
- Get your finances in order so that you can proceed when ready.
- Although inventory is typically lower in the lazy summer, consider a purchase while there is less competition for property.
So enjoy your summer and if you’re buying or selling property right now, relax and enjoy the pace of a more traditional and "normal" real estate market.
I’m going on a much needed family vacation (is that an oxymoron?) and will be back Monday July 12th.
Happy 4th everybody!!! And I promise this is the last of the "Independence" messages!
