Tag Archives: Real estate agents

You can never be too obvious

Because there are people out there who refuse, absolutely refuse, to accept reality. I recently advised a friend on a price opinion he was preparing and between the two of us, came up with a brutal, but honest price that would get the job done.

I asked my friend how it had gone, already knowing the answer and sure enough, the happy homeowner had made his decision on “two things: price and marketing”. By price, of course, he meant, whoever promised him the highest price and by marketing he meant a promised schedule of newspaper ads. Ha ha ha.

Buyers have moved to the Internet. Not a single buyer in New jersey is going to see your wonderful quarter page ad in Greenwich Time and, sadly, most Greenwich residents are locked into their existing homes and couldn’t  buy your place even if they wanted to. Besides, they’ve moved to the Internet too.

And price? Going with the agent who offers the highest listing price is so breathtakingly stupid that I assured my friend that he was far better off without adding this moron to his client roll. Suppose you had some GE stock to unload. If one broker told you that he could move it at its current price of $12.50 and another told you that he, like you and unlike the rest of his competitors, could see the “real” value hidden in your particular shares and would advise offering them for sale at $75, which broker would you choose? (No peeking, Mad Monkey).  Broker number two has just told you that he’s a liar who will tell you anything you want to hear if it will get him your listing. And if you’re dumb enough to reward him for that, then you deserve to sit in your unsold house for a long, long time. Which you will.

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A good start

No, not 100 lawyers at the bottom of the East River, but rather the 80 Greenwich real estate agents who decided not to pay their semi-annual dues of $500 due last December and who were dropped from our ranks this month. Some of these people may raid their kids’ piggy banks and come up with the cash needed for reinstatement but I’d guess that most are gone until the good times return. That’s a wise move and only leaves 920 agents (roughly) to squabble over the 509 houses currently for sale. Have any of my remaining colleagues considered a career in financial services? Might be a good move.

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Public Information

In an otherwise-sympathetic posting, a commentator suggests that this blog isn’t helping the market because I report actual information, rather than permitting buyers to dream. The reader is out of touch with the realities of today’s marketplace.

There was a time when realtors held the key to all information concerning listings and selling prices and I’m sure they loved that monopoly because if a buyer wanted to know about a house, he was forced to come to an agent. By the time I entered this business 6-7 years ago, the Internet was shoving that business aside and that transformation is now complete (in a plug for my current employer, the main reason I switched to his firm is that he saw this, and began building up a fantastic website years ago – it improves all the time). Today, buyers prowl the internet when they begin their search and by the time they contact an agent they already know what’s for sale (except for Sotheby’s listings – Soetheby’s for competitive reasons, refuses to release its listings to the Internet – if I were a Sotheby’s customer who wanted my house exposed to as broad a pool of potential buyers as possible, I’d fire them, but that’s just me). They know what’s for sale, what’s sold, what the average price per square foot is in any particular neighborhood (and in no neighborhood does it even approach $1,000 – sorry, Monkey) etc. So what can an agent offer today to justify his pay? More information. At the very least, he or she should know at least as much as his customer – many don’t – and ideally, much more, by virtue of staying ontop of the market hourly or daily.

It’s obvious, judging from some comments, that some of what I reveal here is news to sellers – I assure you, buyers aren’t surprised. Here’s the Monkey again, answering his own question, funny enough, in another post explaining his view of the world:

I had my property on the market for 180 days and buyers repeatedly low balled my asking price by $3mm-$5mm! Do I look stupid?!?!?

Imagine, in this market, having a house that actually attracts multiple bids over time  your house must be remarkable indeed. But if every single buyer tells you that your house is worth $3-$5 million less than you think it is, you have a choice: you can accept what the market is saying and adjust your price accordingly or you can stubbornly inisist that the market is wrong and that you’re right. Guess which path will result in a sale?

I’ve been advising readers for months that this is not the time to sell their house if they don’t have to or don’t want to. Certainly, the price of anything you might want to buy as a replacement will also be down, but if you’re trading down, rather than up, you’re going to feel pain. What I will never advise is that you list your house at a dreamed-for number and then complain when buyers don’t share your dream. As Monkey admits, that’s just stupid.

So I plead not guilty to causing any part of the drop in prices. The Buyers decide, I report. Period. If your own agent isn’t giving you the same information, perhaps you should ask her to.

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I hate to sound negative but …

It’s Pollyannish headlines like this one, generated by my industry, that drive me to it. I don’t want to join the mainstream media’s hysteria but now that The One will be running things they’ll go positive and I can throw cold water on their silliest claims, without shame. I look forward to it.

Greenwich commercial real estate just swell.

Despite economy, town commercial properties should hold their own

By Keysha Whitaker

 

STAMFORD – While the country may be heading into the worst segment of the recession, Greenwich commercial real estate probably won’t be as hard hit.

“Greenwich, historically, has always done well,” said Thomas O’Leary, senior director at Cushman & Wakefield of Connecticut Inc. “There are still people that want to be in Greenwich, especially as prices come down.”

On Tuesday, Cushman & Wakefield, a private commercial real estate services firm, released its year-end report for the Fairfield County commercial real estate market.

New office leasing activity for Class-A space in the region totaled approximately 1.8 million square feet (msf) in 2008, down from the nearly 3 msf leased in 2007, the lowest level since 2001, according to the report. Available direct Class-A space in Fairfield County jumped to 3.7 msf in the fourth quarter, up from 2.9 msf at the close of 2007.

So “holding their own” means new space leasing is off 40% and vacancies are up 27%. I’d hate to see what a bad market looks like.

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Attention real estate agents

Wall Street needs stock brokers – no kidding! With the large corporations financially strapped and a teensy bit wary of advice from their investment bankers, Wall Street is rediscovering that source of wealth that originally funded its growth: the chumps!

I’d think that my colleagues and I would be perfect for this – we sold you overpriced properties, promised you that you’d get rich by doing nothing and when the world collapsed skated away to write blogs and sneer at you suckers who believed us. Maiden Lane, here we come!

That’s a bit tongue in cheek, I hope, but I do find it interesting to see that the financial industry is pinning its hopes for a recovery on unsophisticated investors. My father used to tell the tale, culled from the days when stock brokers were called “customers’ men”, as follows:

Two former college classmates run into each other in the street, years after graduation and one asks the other what he’s doing these days.

“Oh, I’m a customer’s man,” says his friend, “but please don’t tell my poor sweet Mama – she still thinks I’m a piano player in a whore house”.

Hee hee hee.

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A good time to trade up?

That’s the pitch we realtors are using. This guy thinks not and points out (a)  the “savings” on a more expensive house aren’t real – last year’s price is not today’s; (b) a house isn’t an investment necessarily, but  it’s always an expense. If you need a bigger house and can afford it, go for it – prices are good. If you don’t, or can’t, stay put.

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Former NAR Economist says, “they made me to do it!”

And boy is he sorry now. Freed from the inhumane pressure of accepting a huge salary and First Class trips around the country provided by his employer, NAR economist David Lereah now admits that he was just a paid flunky who said whatever his bosses demanded, including predicting a “soft landing” for real estate in 2006 when he knew better.  But no more -now he’s an independant, free-thinking type, ready to provide objective advice. Trouble is, no one’s listening – his $495 newsletter has less than 50 subscribers, which won’t even pay for the fuel for his Mercedes.

Mr. Lereah now works in a small upstairs office that doubles as an exercise room. He has started his own company, Reecon Advisors, that puts out a weekly newsletter on the housing market and provides consulting services. “I feel I have such a refreshing view now because I’m not representing any interests,” says Mr. Lereah.

He charges $495 annually for the newsletter, and currently has fewer than 50 paying subscribers — a number Mr. Lereah aims to increase to 1,500 by the end of this year.

“He’s starting to make some money off it now, not much,” says Mrs. Lereah. “We have an expensive lifestyle: a big house, a housekeeper once a week, college tuitions, the country club.”

Every morning, Mr. Lereah drives to a Dunkin’ Donuts or McDonald’s and eats in the car, just as he would have on his commute to NAR.

Mr. Lereah’s real-estate portfolio has taken a hit. He says his 3,068-square-foot five-bedroom, 5½-bathroom brick house has lost about 20% of its value in the past two years. (It is worth $780,000 now, according to Zillow.com.) His condos are down, too. He now says housing prices won’t recover for some time.

That’s a bummer, of course, but don’t worry – there’s a new source of optimism at my organization:

His successor at NAR, Lawrence Yun, however, says things might be looking up. In his latest news release, Mr. Yun says that although the pending home-sales index based on contracts signed in November fell 5.3 from a year earlier, with a “proper real-estate focused stimulus measure,” home sales could rise more than expected, by more than 10%, to 5.5 million, in 2009.

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Crain’s NY: The Perils of Real Estate Hype

Nice comeuppance to all of us in the industry, I suppose. To be fair, I don’t believe any of us not on Wall Street (and a fair number of those who were) had any idea what the wizards were doing with leverage and the scope of the risks they were creating and thriving on. But live and learn. Here’s a good point:

One would hope there is a sense of embarrassment for residential brokers. At the least, they should vow to discuss the market only in terms of the more reliable median price—the midpoint, or price at which there are an equal number of sales above and below—rather than the usually inflated average price.

But if they don’t, here’s what New Yorkers should remember for the next cycle. The city’s housing prices rose because of a strong economy, fueled by low interest rates and extraordinarily easy credit, just like everywhere else. They will decline sharply here for the same reasons they are falling elsewhere. To the extent New York did better than other geographical markets, it is because Wall Street was the nation’s most profitable sector in the last boom. And a rebound in New York housing prices will depend primarily on a Wall Street revival.

Greenwich median prices were great – it’s the dependence on Wall Street and its hyper-inflated salaries that proved the joker in the pack. Will there be a Wall Street revival? I hope so. If not, ouch.

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Maybe we need that TARP money after all

Former real estate agent caught living in foreclosed home.

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A National MLS?

Might make sense – this guy thinks so, but I imagine we Greenwich agents would fight it tooth and claw. It’s good to be King, if you hadn’t noticed.

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Greenwich Realtors display their professionalism

 

Go back to selling houses!

Go back to selling houses!

Last week the Greenwich Board of Realtors felt it necessary to once again remind its members that broker and public open houses were to be held for the sole purpose of showing the client’s house and not used as an opportunity to engage in retail sales. Certain agents have a hard time remembering this and, despite previous warnings and a few nasty comments in my old column, continue to offer for sale bad art and counterfeit goods. There’s no law against dealing in bad art, obviously, or New York City’s art world would have shut down decades ago but it is illegal to peddle counterfeit shoes, purses and whatever else strikes an old agent’s fancy, no matter if the proceeds are donated to charity or stuffed into her (knock-off) bra. If I had entrusted my house to an agent I would expect her to devote her time to answering fellow agents’ questions and pointing out the listing’s selling points, not extolling the virtues of an “almost-indistinguishable” Rolex from Shanghai. That’s not just my opinion, the Board thinks so too. I continue to be astonished at the behavior of some of my fellow “professionals”.

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