Fair Housing Advertising Word and Phrase List

This partial Fair Housing Advertising Word and Phrase List was recently disseminated to real estate agents throughout the country and suggests that you "Describe the Property – Not the People."

The Fair Housing Act prohibits certain categories of discrimination in housing. This federal law prohibits publishing advertisements indicating “any preference, limitation or discrimination based on” the protected categories “with respect to the sale or rental of a dwelling.” Id. 42 U.S.C. § 3604(c); 24 C.F.R. §100.75(a). Oklahoma has adopted a similar law that covers the same categories. See 25 O.S. § 1452 (A)(3). The categories are: 1. race; 2. color; 3. religion; 4. sex; 5. handicap; 6. familial status, or 7. national origin.

I found this incredibly interesting as we have been receiving mixed messages from colleagues, management, and attorneys on what exactly is appropriate or not.  For example, many have suggested that "family" can’t be used in advertising yet this list says it can.  Whatever you do, don’t ever suggest that you require someone who is "responsible" or "employed."  No worries there, in Manhattan, the co-ops will handle that one for you. 

I still find this all terribly confusing and nit-picky but it is what it is and we all have to abide by these guidelines.

Homeowner Relief Act Makes Refi’s Possible

For those who had wanted to refinance, but due to falling home prices, did not have the equity in the home to do so, now they can. Due to the Homeowner Relief Act, refinances are now available to homeowners with loan balances up to 105% of the value of their homes. As of today, this program is being offered to help people lower their housing expenses. Note, these loans are being made available at current interest rates with little documentation. Some of the highlights are set forth below:

· Loan amount cannot exceed $417,000 (rules out much of Manhattan but not all)

· Up to 105% loan-to-value on the first mortgage (and no limit on the balance of a second mortgage or HELOC)

· Loans owned by Freddie Mac do not require income to be verified

· Loans owned by Fannie Mae require only 1 paystub or 1 year tax return

· No debt ratios are calculated*

· No minimum FICO score required*

· No reserves (i.e. assets) are required*

· 1-4 family, condos and co-ops properties allowed

· Investment property permitted

· Appraisals not always required

*Some restrictions apply

Contact Dan Shlufman at FCMC Mortgage Corp at 973-574-0900 or [email protected] for more info.

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Manhattan Market Reports: Link-O-Rama

Well better late than never.  Here is a list of links to all of the Q1 2009 Manhattan Residential real estate reports and absolutely no surprises.  Volume has dropped by more than half and median prices of resales are down 20% or more   But don’t take my word for it, read for yourself:

• Prudential Douglas Elliman Report
• The Corcoran Report
• The Halstead Report
• The Brown Harris Stevens Report

I have also included some links to commentary on these reports of which the very best in my opinion comes from my colleague and friend Noah Rosenblatt at UrbanDigs.  Check out the way the press just eats this stuff up:

• Apartments Sell for Less if They Are Sold at All (New York Times)
• Manhattan Real-Estate Market Skids as Sales Slump (Wall Street Journal)

And there is plenty more if you check out:

• Curbed Roundtable: April State O’ the Market Report (Curbed)

And lastly, check out Noah’s commentary on how the media’s portrayal of the "market falling off a cliff" couldn’t be more inaccurate as the decline started as early as late 2007:

• Media Begins Manhattan ‘Plunge’ Effect (UrbanDigs)

Noah and I have been discussing with each other and in the open forum of one another’s blogs that it would likely be 1Q 2009 before we would see hard number evidence of what many of us knew was happening since at least summer 2008.

Now for a bit of my own commentary:

• First of all, although the press would have you believe that the market has come to a complete stand still, it has not. 
• Volume pales in comparison to year’s past but buying and selling of Manhattan real estate continues.  (We have 6 props in contract and are off to a better start than 2008). 
• To sell a home in this market, you must price well to grant buyer’s perceived value. 
• Agents who have no experience with soft markets are pulling their hair out in frustration over the inability to get a deal done.
• More agents will leave the industry over the coming months and years as the "easy money" of the past decade is no more. 
• Prices will likely soften some more before they stabilize which is why sellers need to be ahead of the curve.  Most whom I speak with understand this and are pricing accordingly.  That said, no deal is easy these days as buyers continue to be anxious and patient.

And finally to steal a line from Noah’s post:

Savvy buyers will be called ‘vultures’ and ‘bottom fishers’ for expecting a deal, and many will fail to see that this is simply a market where buyer and seller are simply not on the same page. Its tough on everyone involved in the transaction – the buyer that wants the deal, the seller that wants their price, and the broker that wants their commission.

I would only add that "vulture" and "bottom fisher" no longer have a negative connotation but may instead indicate what the "market value" is for a specific home. 

When Broker is Seller: Double Standard?

Last Spring, I attempted to convince my wife that we should sell our 3BR condo on the Upper West Side, bank a nice profit, and move to a rental.  She couldn’t be persuaded and pointed out that we didn’t need to sell and that moving with our then 7 and 4 year old would be more hassle than it was worth.  You see, we love our neighborhood and our building.  Our kids are phenomenal swimmers because of the pool in the building and the children’s playroom, basketball court, and yoga studio are better than having a suburban basement.  So we ultrimately decided that we would stay until the kids go to college in about 10 years. 

In September, the week before the Lehman Brothers collapse, I convinced my wife that cashing out might be a good idea regardless of the inconvenience of moving.  She "bought" my logic and agreed to list our home.  Since we weren’t very motivated (she not at all), we listed the apartment at an aggressively high price thinking that maybe someone would want to live in the building so much that they would "overpay."  I even told my neighbor who was interested that she and her husband would be overpaying but we would be willing to sell if they were OK with that.  They are still in their 2BR on our floor but decided against the purchase of our place…no surprise.

Well Lehman went under, the Manhattan real estate market came to a stand still in the 4th quarter of 2008 and we again decided that we would stay in our very comfortable home for another 10 years or so.  Which brings me to the present.  Just yesterday a colleague reached out to me to ask if I would consider selling to his clients who are determined to live in my building.  I told him that for the asking price from last Fall, we would sell.  His clients declined our generous offer for them to overpay for our home…go figure. 

Today, I struggle with putting our apartment back on the market with the thought that someone may indeed come along and pay our asking price just to be in the building.  I’m delusional I know but I’m wondering what the harm is in marketing the apartment at a non-negotiable price and only showing to those who understand that.

The harm comes in that I would NEVER advise a client/seller of mine to do this in today’s market as it is a pure waste of time.  Testing the waters today is silly as buyers are anxious and more savvy now than any time in the past.   So why the double-standard?  Why do I feel like it is OK to market my place at a ridiculous asking price when I would never accept the same from one of my sellers?  I don’t!  There is no double-standard and we’re not selling our apartment.

That said, if you or a friend/client wants a 3BR/2BTH condo in the Bromley on 83rd and Broadway and has money to burn, drop me a line 🙂

Confusion Abounds in Manhattan Real Estate Market

The current Manhattan residential real estate market couldn’t possibly be more confusing.  I’m not just talking about buyers either.  All the players in the game are trying to make some sense of the market as a whole.  Here’s what I’m seeing that is making the heads spin of buyers, sellers, bankers, appraisers, real estate agents, and attorneys:

• No rhyme or reason to pricing:  It has become increasingly more difficult to compare properties in today’s market place as sellers and their agents all have different perspectives of where the market is and where it is going.  Prices are all over the map with some properties priced higher than they would have been last summer and others priced as much as 40% below last summer’s values.
• Perception of "value" varies:  Each buyer is coming to the table with their own perception of what value would be in today’s market. Some appreciate a well priced home and others continue to shake their heads with confusion not being able to make sense of  or compare the 10 or so properties that they have viewed.
• Uncertainty over market direction:  No one can deny that the market has declined significantly and it remains challenging at best to determine if and how much further prices will drop before we see a stabilization. 
• Confused agents unintentionally hindering the transaction process:  There is no doubt that real estate agents want to sell the property that they represent.  That said, in trying to make sense of current market conditions, the advice to be patient can often bite us in the behind later in the process.  It is a fact that more often than not, the best offers come early in the marketing process so when an agent advises a seller to not counter an offer in an effort to keep dialogue going, they could very well be doing that seller a major disservice. If an asking price is off the charts, an offer of 20-30% below should be countered IMHO.
• Seller motivation varies:  We still have sellers out there who insist they "don’t have to move" and are willing to be patient in waiting for "their price."  The problem is that the buyers are also waiting for "their price" which is causing a bit of a stalemate in many cases.  No seller wants to be perceived as desperate and no buyer wants to feel that they have over-paid in a soft market.

These are just some of the factors that are contributing to the confusion that is today’s Manhattan real estate market.  Making sense of it is no easy task and requires a greater commitment to diligence and research than I have seen in my 17 years selling Manhattan real estate.

Always Busy Before Vacation?

There is a very strange phenomenon that I have noticed since the day I started selling real estate almost 17 years ago.  Every single time that I am leaving for vacation, the activity level of my business picks up.  Last year, I negotiated 3 deals from Mexico and if my memory serves me correctly, 2 of them were for properties that had been on the market for almost 6 months.  One could say that it is just the result of the Spring market except that it happens to me over Christmas vacation and summer vacation as well.  I don’t understand it at all but that is indeed what is happening yet again as my family and I are departing for St. Thomas bright and early tomorrow morning. 

I’m currently in the midst of negotiating 2 deals and expecting offers on at least another 2 in the next 24-72 hours.  I hope that I’m not giving the impression that I’m complaining about this but more the impression of wondering what this all means.  If I traveled more, would I be busier?  Is my persona or mood more positive prior to vacation and therefore directly impacting my business?  Can I harness the pre-vacation energy and utilize it ALL THE TIME to have a positive effect on my business?

Again, I don’t understand why this occurs but it definitely happens more often than not and this year I’m looking forward to negotiating these deals from the sunny beaches of the US Virgin Islands.

Back to blogging on the the 30th and Happy Spring everyone!

Mortgage Process Delays in Today’s Market

Unlike the Manhattan real estate market of the past decade, many of today’s transactions include mortgage contingencies for buyers.  And until last week, it had been quite a long time indeed since I had a buyer request an extension to obtain a mortgage commitment from a bank.  The typical 30 day period granted in most contracts to get a mortgage wasn’t enough for 2 separate buyers last week as one buyer’s agent called our office pleading for an extra day (received that commitment yesterday) and the other asked for another 2 weeks (still waiting on their bank).  Obviously this makes sellers uneasy in such a shaky market but it seems to be a result of multiple factors:

• Banks are "allegedly" inundated with refinance applications with interest rates at historical lows (for loan amounts below FHA guidelines).
• Banks have also seen an increase in new purchase applications as a result of the same low interest rates as well as the fact that buyers are often encouraged by "price-chopped" deals they see in the market place.
• Underwriting guidelines are much more strict than in the past with an increase in liquidity and income requirements as well as credit scores.
• Banks are also checking and re-checking buyer information throughout the lending process all the way up to the closing day (ex. employment verifications being done 24-48 hours prior to closing).
• Mortgages are not only more difficult to obtain, but there are also fewer banks providing them.

It has always been important, but never as much as it is in today’s market to determine a buyer’s qualifications prior to accepting a bid and going into contract.  But don’t sweat the delays as they are par for the course in this bizarre lending world.

Manhattan Oasis: 3BR Penthouse w/ Terrace and Views

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