June Fletcher of RealEstateJournal.com answers a reader’s question of whether they should use the same agent for sale and purchase in different states? Her reader, Maria Costa is selling land in Central Florida and moving to Lexington, KY. Ms. Fletcher points out that the old adage, "location, location, location" is never more important than when you are relocating as market familiarity is key to a successful transaction in both locales.
The keyword here is "local." Despite the fact that most buyers begin looking for property on the Internet, and just about every broker and agent has a Web presence these days, much of the work agents do is based on hometown knowledge, like knowing which local media pull the best responses or which appraisers are the most professional and reliable. Plus, whatever agent you choose must be close enough to your place to show it to buyers on short notice.
What else does Ms. Fletcher suggest should you consider when buying and selling in different states?
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Licensing-it’s highly unlikely that an agent would be licensed in both your current state and that to which you are moving…possible…but not likely.
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Disregard Affiliations-I think the agent whom you hire is much more important than the company for which they work.
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Seek Specialization-Even if you’re moving within the same city, it’s often a good bet to use an agent to sell your home who specializes in your immediate area. Similarly, you should buy with an agent who has expertise in the neighborhood to which you are moving.
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Consider Renting-I also agree that renting in the "new" city is a wise move particularly if you are unfamiliar with the area.
I agree with this advice but would add that if you have an agent in your current market with whom you are very satisfied, consider asking them for assistance in the form of an "active" referral to your new market. What do I mean by an "active" referral? All too often, I see colleagues refer their clients to markets across the country and around the world, only to make an initial phone call and "drop the ball" after handing their client off to an agent in the destination city hoping that their referral will pay dividends despite their lack of involvement. An "active" referral in my opinion is one from an agent whom you trust in your current marketplace who plays an active role in assisting you with the selection of an agent in your destination city who will treat you as you’re used to being treated by the referring agent. Your referring agent should act as a liaison to make sure that you are getting the attention and treatment that would be expected of a professional in your destination city.
So my advice to those relocating from state to state (or maybe even those moving within the same city but changing neighborhoods) is to find the "Right" agent. Take the time to interview multiple agents in your current location to find someone you can trust and who you believe has your best interest in mind. Also be sure to ask them if they can help you find someone like themselves in your new city. As Ms. Fletcher points out:
…plenty of other factors matter, too: intangible ones like honesty and integrity and practical ones like experience and a good network of local industry professionals such as buyer agents, lenders, inspectors and remodelers.
Once you have found an agent who exhibits these qualities in your current market place, consider allowing them to actively participate in your relocation to your destination city. If they truly have your best interest in mind, they won’t mind working with you to insure a smooth transition with your relocation. Nothing wrong with an agent actually "earning" a referral fee for a relocating client. After all, a typical referral fee is 25% of the the destination city agent’s commission. Precisely why your referring agent should add some value to your transition!
I hope everyone is looking forward to this long Memorial Day weekend as much as I am. I’m heading out to Bridgehampton with the family to spend the weekend with my in-laws (that’s a good thing…I actually really like them).
- And as much as I DETEST spin classes, I have agreed to join my brother-in law for a class at Zone Hampton on Saturday. Hey Neal, why aren’t we stayin’ in the hood and checking out Soul Cycle which I just found out about via Gotham Gal’s Joanne Wilson?
Now back to real estate:
That’s all I’ve got for today. Taking off on Monday so have a wonderful weekend and see you all on Tuesday.
For all of those real estate haters out there who think that I and my colleagues are effortlessly collecting fees for selling property, here are a couple of anecdotes that you’re sure to enjoy. After all, readers of blogs like Patrick.net seem to "get off" on anything related to real estate agent angst. Well here goes because I’m deep in it right now.
Twice in the past 4 months, I have represented buyers of very large residential purchases who had the transaction implode in the eleventh hour. The buyers 4 months ago had signed the contract and provided the 10% deposit check only to call their attorney on the day the contracts were to be delivered and "kill the deal." It took a while but I got over that one…it happens. When people are spending in excess of $10,000,000 on a home, you have to appreciate "cold feet." They ultimately decided that such a purchasing in this particular project just "didn’t feel right." Just can’t argue with that. If your spending that kind of money it better darn sure "feel right."
The second incident happened today to clients I have worked on and off with since 1997 also in the $10M+ price range. Today, they were the very unfortunate receivers of a good, solid gazumping. After a 10 day negotiation, a contract was drafted on Tuesday and sent to my client’s attorney. Yesterday, I was consumed with this transaction as the seller’s agent insisted that a contract needed to be signed by the end of the business day Wednesday. After multiple phone calls and conference calls, more than 100 emails to various parties, and my office hand delivering original contracts for buyer signature and back to buyer’s attorney, I still couldn’t rest. Then I received confirmation that the contracts had been hand delivered to the seller’s attorney. I later received email confirmation from both the seller’s attorney (via the buyer’s attorney) and the sales agent that the seller was "committed" to signing the contracts at 10AM today. At 9:30AM I received a call from the seller’s agent that they received an offer this morning that was $1,300,000 over my client’s negotiated contract that they "committed" to sign. OUCH!!! The seller had refused offers as much as $1,000,000 more over the past week because she was "committed" to my clients. But that extra $300,000 was the straw that broke the "committed" camel’s back. My clients have since rescinded their offer, requested the contract and deposit be returned and the seller is proceeding with a new buyer.
Now I would be lying if I said this doesn’t sting…heck it aches. After all, we’re talking big numbers here. Having said that, what is bothering me more as the day passes is that even this moral and ethical seller had her "price" supporting the old adage that "everyone has their price." I’m sure many out there are going to say, stop with the self-righteous BS, but isn’t that part of the problem with our society. A person’s word is only worth what the next person is willing to pay for it. And to prove that I walk the talk, my wife and I accepted 5% less than a higher bidder on our last sale because we had "committed" to the original buyer. And I have many clients who have done the same but all too often money does indeed talk.
Of course I wish both of my clients had proceeded with their respective purchases but it just wasn’t "right" in both instances. I will likely sell both of them something else so it’s not about me losing a deal as much as it is about how people do business. In Manhattan, we have no binders. A deal is not a deal until the seller counter-signs the contract and deposits the 10% contract deposit. The time that lapses before that actually happens creates the "perfect storm" for gazumping.
What has happened to a person’s word or a hand shake? Sadly, it all too often doesn’t mean anything in today’s society. It’s all about "show me the money" and that is unfortunate.
Jason Kottke of Kottke.org shares these 2 possibilities for forward thinking architectural structures that may soon grace the skylines of cities across the world with dynamic architecture (click on the Dubai project link for some cool animation of the totally "Green" structure that will provide a way for automobiles to drive to the top of the building) soon to become a reality in Dubai. And check out this concept for a Helix office tower with only one floor. Yes that’s right, you would walk up a "corkscrew" ramp placed around the perimeter of the structure. Some fun concepts to ponder as most of us can’t even imagine how the face of architecture will change in the years ahead.
Only someone who has driven in or owns a car in New York City can appreciate to complicated and often frustrating process that is parking.
I just received this email from Deb Stewart in my office:
This is one of the greatest websites ever!
It was created a few years ago by a high school sophomore to compare monthly garage rates. (Also great because you can find all the garages near any address you input) Enjoy!!
Check it out at http://www.nycgarages.com/
Thanks Deb!
The following is a list of questions to ask and some advice to consider when interviewing prospective movers. It comes from the man who handles most of my client’s moves and whom I trust to handle them as I would (he has also moved my family twice): James Benati of Steinway Moving and Storage. James has served as a board member for over 8 years and then as the president of the New York State Mover and Warehouseman’s Association and has assisted help many confused and abused relocating family’s. Here’s some solid advice from James:
- The most important thing in planning a move is basic research. Ask friends or neighbors for recommendations good or bad. This will help you create a short list of bidders. Any firm that mails, calls or telemarkets you is desperate for work and may not be the best choice.
- Remember many people involved in your move may be getting paid to give out or sell your information and phone number. So be careful with vendors and service providers from your doorman to the mortgage broker or real estate agent. If there getting a payment its coming from someplace, most likely you !
- Check out each company with the NY State Department of Transportation at 718-482-4810. Ask the D.O.T if the company is licensed for local moving. Some companies only have a license to do long distance moving and not local moving. Remember if their not licensed by NY State they are harder to find or go after if they technically "don’t exist."
- Also check with the D.O.T. the history of complaints, and that there is proof of workers compensation insurance. Companies operating illegally and with out worker compensation insurance can create big problems for a home owner if one of their men get hurt on your property.
- You can also check out the New York State Movers and Warehousemen’s Association web site for recommended movers who must meet a criteria to be a member.
- Insist on an on site estimate and a list of references. Fancy brochures don’t always mean a good mover just a good printer.
- Be sure the company has "Brick and Mortar" locally, An office you can visit, a place to go if there is a problem. There is less likelihood of a problem when a company is based in your back yard and not someplace in cyber space.
- Choose with your head and the facts not by the numbers. Remember your trusting these people to put everything you own into a vehicle and drive it away. As James’ dad said ( A mover for over 50 years), "you get what you pay for and some times you deserve what you get."
- Make an intelligent decision based on common sense, facts and personal feelings when you meet the estimator or owner.
- Remember that there are a lot of good movers but unfortunately there are also a lot of bad ones.
I have to say that I don’t easily refer my clients to people outside of my industry. In order for me to do so, the company must treat their clientele as I would: with respect, integrity and open lines of communication at all times. Having said that, one such company that I feel 100% confident referring my clients to is Steinway Moving and Storage. I am often asked by my clients to recommend a moving company and I can refer to James Benati at Steinway without hesitation and with the confidence that my clients will be not just satisfied but truly pleased with the services they receive. I have countless accolades from such clients to attest to this. And again, I get nothing to say this…no kick back, no referral fee, nothing but happy clients.
As most of you know, True Gotham is a voice for residential real estate matters but I recently had the privilege of a presentation on Commercial Lease Review and Administration by Scott Bloom, President and Managing Member of Bloom Real Estate Group LLC. For all of you out there who have commercial leases, I asked him to explain in layman’s terms what a lease review is and why a lease needs administration:
Scott: When we perform a lease review, a client provides us with a copy of the current lease and all the invoices received from the landlord during the term. We go over the lease in detail and prepare a one- or two-page description of the basic rights and obligations as a tenant. Then we compare that list to the invoices and look for ways in which they may have been overcharged.
Q: What are you looking for? Once you sign the lease, hasn’t the chance to save money pretty much passed?
Scott: In some cases, that’s true. But we are looking at things like the rent concession. When the lease was negotiated, the landlord might have granted, say, three months free rent. If those three months are all at the beginning of the term, the tenant most likely knew when they were up and expected to start paying rent. Sometimes, though, a three-month rent concession is spaced out during the term of the lease: first month now, second month a number of months or years into the lease, and the third one even further on. If the landlord’s accountant neglects to allow for those free months later on and sends the invoices straight through, the tenant might forget about them and pay the rent automatically. That’s thousands of dollars going unnoticed.
Q: How does a tenant get that money back once it’s paid without doing battle with the landlord?
Scott: If we find that a tenant has been overcharged, we have a discussion first and make a game plan. Then we will contact the landlord as an agent, and work out a refund in terms of free rent or a refund check. This way, our client can maintain a friendly relationship with the landlord while we act as a professional buffer correcting the “mistakes”.
Q: Is rent concession the only way to be overcharged?
Scott: No, we also look for things like security deposit burn-downs and rent escalations. These things can come up years after the lease have been signed, when the tenant is deeply immersed in making the business grow.
Q: It seems like a good business person should do this themselves? Wouldn’t it be smarter to go over your own lease and pocket the whole refund instead of paying you for this service?
Scott: Sure, you could do it yourself. You could do your own accounting, too, and your own taxes, but you don’t. You hire someone who has the expertise and experience to be able to do a better job than you can, and be held responsible for the results. And why should you take time and attention away from managing your business? Besides, we don’t charge our clients for lease review and administration. It’s all part of making the deal. We don’t collect the commission and disappear. We are in it for the long run. We want you to let us handle your next move, or your expansion, or your additional offices. We want to act as your outsourced real estate department.
So it seems like a no brain-er to have a lease review to determine whether or not you are being over charged. If you’re interested, you can visit Bloom Real Estate Group’s website and learn more about this service. And by the way, Scott and his team saved my daughter’s nursery school $750,000 when negotiating a lease.
As I was reading the comments of some real estate haters this morning, I immediately thought of The Love-ahs played by Rachel Dratch and Will Ferrel on Saturday Night Live. Are you my love-ah?
Although I appreciate and respect that the real estate agent "used car salesman" stereotype doesn’t come from space, I’m still often amazed at the amount of disdain and distrust for the real estate profession. What is so incredibly amazing to me is that even the intelligent, well-intentioned agents who are actually providing a wealth of knowledge and service to their clientele are lambasted for being disingenuous. Case in point, Noah Rosenblatt of UrbanDigs.com had a recent post, Market Report: Active Transition, picked up by Curbed. As I have been swamped the past few days, I just stumbled upon the RSS feed of Curbed’s post this morning (this is where you can read all of the comments).
First I have to say that I absolutely love Curbed mostly because of the uncensored hilarious comments that come from its readers. But the comments regarding Noah and his blog are laughable in an unnerving sort of way. Here is someone who is breaking the "old boys club" rules and reporting EVERYTHING he sees happening in the Manhattan real estate market on a day to day basis. He’s honest, has his readers and clients best interest in mind, and provides information that is useful to anyone thinking of buying or selling in today’s Manhattan real estate market. Of course, his information is anecdotal based on his own experiences in the trenches of the New York City market place, but isn’t that more useful to someone in today’s market than a plethora of economic numbers that are often outdated by the time they are released? I think so.
The number one question I and most of my colleagues (including Noah) are asked at a cocktail party is "how’s the market?" Those of us with blog platforms make an effort to answer that question for thousands of readers on a daily basis. With that comes a credibility that makes many of our readers feel comfortable approaching us and perhaps even working with us. Of course there will always be those who don’t agree with or even like what we are saying. That’s the beauty of a blog. It’s a dynamic platform for debate and hopefully change. The fact remains, we are telling it like we see it. Anecdotal or not, it’s reality. And reality right now is that the Manhattan real estate market continues to favor the seller with a modest slide in the direction of a buyer’s market. Precisely what Noah is saying. Summer should definitely bring some opportunities for patient buyers to finally procure Manhattan real estate. If you don’t want to buy, don’t. We’re not twisting anyone’s arms. We’re giving you solid info from the front lines of a market that even baffles us sometimes. Stop the hate and be a "love-ah."
I leave you with this quote from Herbert Spencer:
There is a principle which is a bar against all information, which is proof against all arguments and which cannot fail to keep a man in everlasting ignorance – that principle is contempt prior to investigation.
Today I’m on a field trip with my son to the NYC Transit Museum and then I will spend the rest of my day helping to collect money for an absolutely amazing organization here in New York: City Harvest. I was reluctant to blog about this because it has absolutely nothing to do with real estate but it has everything to do with giving back to the community which is in large part the mission of True Gotham. So here goes:
TODAY you can donate what you spend on lunch to Skip Lunch Fight Hunger and help
City Harvest feed hungry kids and their families in New York City.
1 in 5 New York City kids doesn’t always have enough to eat.
You can help.
• $5 can help feed two children for a week.
•$10 can help feed a child for a month.
•$25 can help feed a child for the summer.
If you would like to make a donation to Skip Lunch Fight Hunger, click here.
I have personally driven on the City Harvest trucks through Brooklyn delivering heads of cabbage, vegetables, juice, and a variety of other donated items and the gratitude from the recipients of this food is incredibly heart warming. It’s a great organization and a great concept that truly gives back to the community.
I just can’t resist back to back posts on a subject that has kicked up some feelings for all of those involved in the real estate industry. Sunday night’s 60 Minutes episode Hi Tech Real Estate Moves In has created quite the buzz across the Internet and among my colleagues (check out Peter Comitini’s take on the subject). And of course, the NAR is up in arms about the piece as seen in this letter to its members shared by Christine Forgione at NYHouses4Sale.com (I’m not a "Realtor" so I didn’t receive this letter…but Christine did and here it is):
Dear Fellow REALTOR:
I am disappointed and dismayed at the biased story that 60 Minutes aired on Sunday evening. I want to let you know that we’ve been working to stay on top of this story.
One of the most difficult challenges we face is educating the news media about today’s real estate industry. There’s no better example than this 60 Minutes show. For more than a year, NAR worked with the producers who put the segment together and offered several spokespersons to be interviewed for the show, including myself. Yet, NAR’s voice was strangely and noticeably absent from the segment though CBS gave time to two critics who disagree with our policies on the display of listings on the Internet.
At times, NAR and REALTORS® have often been the subject of less than accurate news coverage. Your association and its professional staff is making every effort to get the REALTOR® message out to the news media. The result is that only a fraction-less than five percent-of the vast news media we receive is negative.
We encourage all of you to contact CBS to voice your concerns — maybe have some of your satisfied customers do the same.
Thank you for your support.
Pat V. Combs
President
I just wish I could have heard good ole David Lereah’s reaction (aka "spin") to this 60 Minutes segment. Is the NAR surprised that this story is "bias?"
This debate over whether or not a discount real estate brokerage model can survive in the marketplace has been going on since before I started in this business 15 years ago. So I did a Google search this AM to see exactly what I could find by the way of discount firms. My search of Discount Real Estate Brokerage (no caps) turned up 1,210,000 search results with 7 of the first 10 being bonafide discount real estate agents. If you’re interested in this type of service, there are options out there for you (try the same Google search). There will always be consumers who prefer Charles Schwab over Sanford Bernstein. I’m counting on continuing to make my living servicing the latter.
