The recent Amy Tennery article in The Real Deal, Should brokerages take a ‘VOW’ of privacy has people talking a great deal about the arrival of VOW’s (Virtual office Websites) to the Manhattan real estate marketplace and whether or not the consumer’s privacy is being violated.
Real estate pros say that VOWs, also known as "Virtual Office Web sites," can give agents a backstage pass to their clients’ predilections. VOWs allow buyers to view an agent’s listings — and those belonging to other brokerages — all on the same Web page.
But VOWs present serious invasion of privacy issues and as a result can be a real turn-off to homebuyers, critics say.
VOWs can track your buying behaviors. For example, if a buyer tells a broker that she has a budget of $1.2 million, but the broker sees the buyer checking out $1.5 million listings on the company’s VOW, the broker could potentially push the buyer to make a larger purchase than she had talked about.
As most of you know, I’m a huge fan of technology, transparency and anything that makes the real estate industry more efficient and consumer friendly. This is precisely why I embraced things like blogging and video before the masses. It is also why I immediately embraced Matt Daimler’s Buyfolio (to which we at HPG and most of our buyer’s give a major thumbs up so far). And of course it is precisely why I got so excited about our VOW.
It sounds like a great idea on the surface and indeed in my opinion it is…MOSTLY. My buyers are now capable of searching all NYC listings data directly from The Heddings Property Group website. But, when I announced the unveiling of our AllAccessNYC service on March 12, I was unaware of just how much data was going to be farmed from my client’s searches. It is for that reason that:
I am announcing today that we have officially disabled access to ALL analytics features from our VOW. So while our buyers maintain all the functionality of the search site, NO ONE at the Heddings property Group will be permitted to track searches in any way whatsoever.
In an industry so laden with mistrust, I feel that it is absolutely imperative that our buyer’s privacy be protected. With our AllAccessNYC site, we are indeed "VOWing" to respect and honor that privacy.
After all, If the lines of communication are so poor between our clients and us that we need to "spy" on them, then we should consider how we are operating our businesses and whether or not we are keeping the consumer’s best interest the priority.
Well it’s that time again. I wanted to really familiarize myself with everything that the big brokerages were reporting before making any effort whatsoever to make sense of it all. In an effort to interpret the data from the reports, I’m going to "borrow" this nifty chart from my friend Noah over at Urban Digs. And please check out his post on what these numbers mean as well:
Once again, I’m puzzled that the same data sets yield different numbers but we can definitely garner the following conclusions based on these reports and experience from the front lines:
- There is no doubt that sales volume has increased greatly over the past 2 quarters. No surprise here as prices had come down to levels where buyers have begun to perceive value. (15-40% from peak depending on location, size, amenities, etc.)
- Prices seem to have stabilized for the time being with no one certain of whether they will remain flat, increase, or decline further. (I’m guessing flat to further declines particularly if mortgage rates increase next Fall)
So what? What is happening now? After all, that is what matters most for buyers and sellers trying to navigate this bizarre real estate market. Here’s what I and many of my colleagues are still seeing:
- Asking prices still all over the map with overpriced property languishing on the market.
- Buyers are infinitely more patient and their qualifications have vastly improved.
- Sellers are reading somewhere that the real estate market is poised for a rebound and they should "wait it out." Could be a very long wait indeed.
- Inventory has shrunk considerably again from last quarter of 2009 but the Spring market should open that up (incidentally, I think the Spring market this year is from April 6 to roughly May 15)
- Bank policies like sending appraisers in just 2 weeks prior to closing are slowing down the transaction process.
The market has definitely improved from same time last year but let’s not pretend that we are in any sort of recovery yet. We definitely have a more active market where qualified buyers are purchasing properties for prices that appear much more reasonable than just 2 short years ago.
That said, I can’t imagine that anyone in the real estate industry wouldn’t welcome the heated activity of…let’s say…2006.
Yes it is finally possible to search all Manhattan residential real estate listings in one place and we are one of the early adopters of what the industry is referring to as VOW.
Check it out on The Heddings Property Group site.
By simply registering on our AllAccessNYC site, you will gain just that: ALL ACCESS to ALL NYC residential properties for efficient and easy one stop shopping without the hassle of searching multiple property sites.
We’re very excited to deliver this service to our buyers and the savvy Manhattan buying community who has been fed up for so very long with the inefficiencies of our residential marketplace.
Enjoy the site and happy shopping.
Our very own Dan Shlufman has some excellent ideas for attorneys regarding the latest RESPA changes to help facilitate smoother transactions. Not a bad read for the consumer either:
As most of us are aware, as of January 1, 2010, the new Real Estate Settlement and Procedures Act (“New RESPA”) went into effect. As it only affects loans that are originated after said date, and closings normally take 6-8 weeks in New York (and often 12 or more for coops and condos in Manhattan), few if any transactions have closed under the New RESPA.
This is fortunate since the major changes detailed below will have the affect of changing the timing and, in many cases, the occurrence of closings. As a result, to mitigate this on residential real estate transactions, I strongly recommend that we make some changes to our practices on these transactions and specifically modify our closing procedures with respect to the HUD-1 Settlement Statement (“HUD-1”).
The intent of the New RESPA was to improve consumer protection. To effectuate this, lenders and mortgage brokers are required to provide more accurate Good Faith Estimates (“GFEs”) to buyers. The effect on closings is that the charges listed on the HUD-1 will now be required to track those disclosed on the GFE..
Certain charges will not be permitted to change at all on the HUD-1 from those disclosed on the GFE. These are broker and lender charges such as origination fees, application/processing fees and underwriting fees. In addition, inexplicably (as many of these have nothing to do with a loan and, even those that do are set by state and local statute), government transfer fees are included as well. In New York, the mortgage tax is included as it should be. However, so I believe, are the Mansion Tax and the Peconic Bay Tax. Both of these are sizable amounts and might not be known to an out-of-state broker or lender causing a closing issue if they are not disclosed on the GFE!
The second class of charges is those that may vary in the aggregate by no more than 10% over the amounts disclosed on the GFE. These charges are lender required settlement services such as bank attorney fees, title insurance and government recording charges. This limit does not apply if the borrower or, presumably, borrower’s attorney selects its own provider for any of these services.
The final class of charges is those that may vary (without limit or tolerance levels) from the GFE and are for escrow reserves (i.e. homeowner’s insurance and real estate taxes); daily interest charges and homeowners insurance itself. In addition, if the interest rate is not locked at the time of application, the origination fees can vary until such time as the rate is locked when a new GFE will need to be delivered.
To make sure that we are best serving our clients and also to provide for quick and smooth closings, I suggest that all we do the following on all new transactions:
1. Review the GFE: Have the client send this to you and check to make sure that all usual loan charges are listed (and that unusual ones are not). Confirm that the mortgage tax and appropriate transfer taxes are listed properly. If not, let the client and mortgage broker/lender know this as soon as possible so this can be corrected.
2. Title Charges: Once a contract is signed and prior to ordering a title insurance report (unless your practice is to order it at that time as opposed to when the mortgage commitment is issued as many attorneys do), request a written, binding list of all title charges (including recording fees). The title companies are all aware of New RESPA and most of them are willing to do this. Once you receive these charges, forward them to the client’s mortgage broker or lender to include in the GFE.
3. HUD-1: The most important change is with respect to the HUD-1 which has been traditionally an after-thought and completed at the closing. This can no longer be the case since a lender will refuse to fund a loan if these charges don’t match those on the GFE. At a minimum this will cause a delay in the closing if the lender’s in-house closer (i.e not bank attorney) is unfamiliar with NY practices. In the extreme, it can cause an adjournment of the closing if the issues cannot be satisfactorily reconciled quickly.
To avoid this, the HUD-1 needs to be completed, reviewed and finalized by all parties 1-2 days prior to the closing. To accomplish this, attorneys will need to provide the bank attorney with all charges including managing agent fees, real estate agent commissions, title costs (which they should have from the beginning of the transaction), adjustments, etc. once the closing is scheduled. They must also insist that a final HUD-1 be provided to them at least 1 day prior to the closing for review. My recent experience has been that bank attorneys understand this and are willing to comply.
If this occurs, the bank attorney will be able to obtain approval on the HUD-1 prior to the closing. This will not only avoid delays, but speed up the timing of closings. In the case of a problem, it will get resolved prior to the closing. If it does not, then the closing will get adjourned prior to its occurrence saving all parties time and aggravation.
I believe if we adopt these few, relatively minor changes, we will be able to easily adapt to the New RESPA and continue to protect our clients’ best interests.
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 Heights that 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.
- 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 using these antiquated sales slogans to try to pique interest? 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 of experience in the Manhattan real estate market have served as evidence of that. Still no official MLS in Manhattan; no standard measure of square footage; listings data still perceived as proprietary; and the industry remains one that puts it’s own interests before the consumer more frequently than not.
But change is coming and it’s coming fast! The DOJ continues to investigate the real estate industry, more players are entering the listings business and trying to streamline the process for consumers and just recently I met with someone who is so incredibly well funded and who hopes to change the entire way that the industry operates. And let us not forget about Google who in my humble opinion is going to redefine our industry and how we do business in about 3-5 years.
Embrace the change my friends…it’s coming!
No surprise that reading the "Big 3" Manhattan real estate market reports for Q4 2009 is giving many, including me, a headache.
Check them out for yourself:
- Elliman
- Corcoran
- Halstead
All 3 of these firms have done an excellent job of comprising and interpreting data but which data set is accurate? And why are the data sets so different in a market that has made information much more transparent? And lastly, but perhaps most importantly, what does this mean for you the buyer or seller?
I’m not even going to attempt to answer the first 2 questions because I have been asking them for years. But question number 3 is near and dear to my heart as many know that I am NOT a fan of averages or generalizations particularly when it comes to hyper local housing market(s).
The best advice that I can give to all of those out there trying to make sense of these numbers is to be very careful not to strictly apply increases or decreases in median or average prices to any specific home that you are selling or buying. Use these numbers as VERY loose guidelines that basically indicate a few things:
- Inventory is down
- Prices are down
- Sales activity is up
That’s about all you can take away here. And Happy New Year everyone!!!
I realize that you wouldn’t know from the lack of postings here, but TrueGotham is not dead! As most of you know, I left my former firm and brought the Heddings Property Group to Charles Rutenberg Realty back in June. It’s no surprise that the move has added a plethora of new responsibilities to my job description and since my clients always come first, the blog has had to take a back seat for a short time.
Our team continues to grow and we have been incredibly busy with a Manhattan real estate market that remains challenging but not impossible to navigate. After a slow start to 2009, the summer and fall months have kept us all on our toes. With 7 quality professionals (and growing) currently on our team and a commitment to a level of service unparalleled in the industry, we are enjoying the process of helping buyers and sellers navigate a terribly confusing real estate landscape more than ever before. Incidentally, I interviewed or spoke with 75 people in an effort to fill the final 2 desks in our Westside office and further expansion is in the works.
Next month we will be opening a Hampton’s branch of The Heddings Property Group at Charles Rutenberg Realty located in Southampton and by June we anticipate the opening of a downtown Manhattan office in the Union Square area.
The ranks of Rutenberg continue to grow as well with over 300 agents creating the 6th largest brokerage in Manhattan in only 3 short years (colleagues please feel free to call me to discuss the many reasons why you too should join the Rutenberg team).
As cutting edge technology makes its way through the big brand bureaucracy, we continue to syndicate and share listing information globally in over 30 languages. We are rolling out a buy side tool any day now that will streamline the search process and bring with it a transparency of which most are afraid. And we have created a real estate broker business model that truly focuses on the best interest of the client by aligning the interests of all team members with that of each and every buyer or seller.
So you see that we are very busy trying to make the real estate buying and selling process a smooth and more efficient experience for those who matter most: the buyers and sellers!
Chris Thorman at SoftwareAdvice.com sent me his latest post this AM: Own to Rent: Breaking Down Fannie Mae’s Deed for Lease Program. That’s correct, the title reads "Own to Rent," not at all the rent to own scenario of which so many are already familiar.
The Federal National Mortgage Association, more commonly known as Fannie Mae, recently announced a new program designed to keep mortgage-challenged borrowers in their homes. The Deed for Lease (D4L) program allows qualified borrowers to relinquish the deed to their property and rent their home at the market rate for 12 months.
Chris’s breakdown of exactly how this program works is excellent and thorough. Imagine paying rent to your bank with no possibility of upside in equity after you once "owned" your home. Ugh!
The impetus for this post is a question that was recently asked of me from one of my sellers. They are in the early stages of selling their Manhattan co-op and have simultaneously bid on a house outside of the city. The seller wanted to know precisely when we will have confirmation that her current apartment is sold to give her confidence in proceeding with their purchase.
The answer: You will know your apartment is sold when you have walked away from the closing table with certified checks and the buyer has left with the keys.
To further elucidate this point, 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.
- A contract is sent to the buyer’s attorney from the seller’s attorney from a boiler plate form with attached suggested riders
- 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.
- The buyer’s attorney then marks up the contract with suggested changes and it goes back and forth until both attorneys agree on language.
- Once the contract is finalized, the buyer will sign and provide a 10% deposit check to be delivered to and deposited in your atty’s escrow account until closing.
- The seller will then sign the contract.
- 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.
- 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.
- Multiple copies of the application are made by the real estate agent and delivered to the managing agent.
- The managing agent then takes 1-2 weeks to "process" the application running credit reports, etc and then they disseminate to Board members.
- 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.
- 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).
- Board interviews buyers
- Typically approved within 1-3 business days but some buildings take longer.
- 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.
