I will be holding 109 Elk in New Rochelle open today from 1-3 pm. It is a 3500 square foot English Tudor with 6 bedrooms, 3.2 baths, and a carriage house garage. List price is $975,000 and annual taxes are $22,429. The lot is very large for the area-.39 acres. 

Here is the write up from the MLS, which is a good summary:

Magnificent English Tudor in prestigious Forest Heights, on the corner of a spacious .39 acre yard. Formal entrance & foyer, balcony off master suite, 6 bedrooms plus 3.2 baths. All electric is updated, sunroom has heated flooring. Two-story 3-car carriage house. Oak floors throughout, beamed ceilings, stained/leaded glass windows and wonderfully preserved original details throughout. Two gorgeous woodburning fireplaces, greenhouse, large eat in kitchen, and much more.

Come meet me if you don’t carry anything written by JD Salinger. 

The latter half of April has been maniacally busy for me because of the stimulus deadline of April 30. I have been working nonstop for the past week, save for collapsing at home at days end. It takes every waking minute just to handle what is coming across my desk. Offers, inspections, contracts, and showings showings showings. 

I miss my kids. At least, I miss my awake kids. 

We are heading into the last realistic weekend for any area buyer to get into contract by the deadline, since we take some time to get contracts out (thank you lawyers). Consequently, I am at it each day until I drop. 

What will happen May 1st? Will the market go dead again? Will sellers lose what little leverage they had and get more desperate? Will casual buyers disappear from the market now that the $8,000 incentive is gone? Or will the Spring cycle continue through July 4 because of the pent up demand from the slowness of the prior crummy years? Questions loom. 

I know what I am doing May 1st. I am getting up in the morning and going to work. I’ll return calls, follow up on leads, and blog. 4 kids know no off season. 

Make hay while the sun shines!

I did the training back in 1989 so forgive me if my nomenclature isn’t 2010.

I recall being in a seminar in the 90’s and being told that being in the present could best be illustrated by a dog falling from the top of the skyscraper…the thought was that rather than being fearful, the pooch would instead be amazed at how cool the wind felt in his fur, just like a better version of riding in the car with the window opened. 

No one has tested the theory. I hope. 

I blogged about an Aha Moment my wife had with our dog last week. There was a transformation from Detente to affection, and he hasn’t been the same dog since, and that is in a good way. Dog are very present. They only know the here and now. Wherever they go, this is it.

At least, until this morning.

After the 3 older ones were on the bus, Ann decided to putter around the yard with Mark, our 3-year-old.  The back yard is fenced, but the front isn’t as safe for a dog, so Max had to remain inside with me. And that wasn’t it. “It” was outside with Mommy and Mark. The poor dog wanted to go outside in the worst way, and wasn’t at all into being with me anymore. Max wanted to trade up. This wasn’t it. That was it. 

Dogs remain the noblest creatures in God’s menagerie, but Max became a bit more human today. 

I came up with this as I was speaking to a referred listing prospect. It might be hot air, but I think it makes sense.

• Reputation. This is where it starts. Reputation is the cornerstone for an agent or company. The good will of the public and our peers is a prerequisite to succeeding in our industry. If your name isn’t trusted, you have no chance of making inroads in a competitive market. Unknown is OK, distrusted is fatal. Known and trusted is the best. The goal of anyone in our industry is to get their good name out there. 
• Referrals. Referrals are the barometer of a known and trusted name. It isn’t just marketing; anyone can “buy in” with advertising and mail, but long term success is ensured by the number of people who were given your name by others.
• Revenue. Paydirt. Touchdown. A good reputation yields referrals, and referrals create income. Since I started the company in 2005, I have monitored the number of referrals I have gotten over time. It is gratifying to observe that we have had more referrals thus far in 2010 than 2005 and 2006 combined, because we have been at it longer and are passing the test of time. 

There might be other “R’s” but that is what came to mind. These are the three holy grails I think any serious professional aspires to. Feel free to add yours.

I am not a big staging guy. I simply don’t have the eye for it, and it is best left to professional stagers. I know a few tricks- tidy up, clear off the table and counter tops, put the toilet lid down, that sort of thing. I don’t care if people have their kids pictures on the fridge, or family photos on the stairway wall. That makes the place a home. Some disagree. That’s just my feeling. 

There is one thing I saw today, however, that I am pretty sure is a no-no. 

I think that taping your bankruptcy papers to the wall next to your desk might be a bad move. Just a hunch. Especially if you are having the house held open from 1-5pm that day. 

Hopefully, the agent hosting the open walked through the house and caught this. We arrived early and did not walk through with her. But I’m pretty sure this might be a bad idea. 

So I propose adding a new rule to the lexicon of home selling. Choose a good agent. Price it right. Be accessible for showings. 

And hide the bankruptcy papers. 

I’ve noticed something lately. Even though sellers are getting less for their homes than years past, commissions are not down. I see more bonuses offered. I see strong cooperative commission offered in the MLS. Brokerage as an industry has not been decimated by the market downturn or the advance of technology the way other industries have. In spite of the naysayers and blabbermouths at the keyboard, the market is efficient, and it is proving the worth of brokerage.

Every company that was going to “change the industry” hasn’t. 

Every trend predicted to supplant brokers with technology has not manifested itself. And it won’t. 

The reasons is simple: Real estate doesn’t sell itself. It takes people to sell it, and it is a rare skill to make huge amounts of money change hands. Moreover, those that possess the skill to make vast money change hands deserve to be well compensated. Don’t bore me with the anecdote of the inept slob who stepped into a million dollar listing and made tens of thousands he didn’t earn. He can’t do it long term. As a matter of fact, the agents who work that niche successfully are, by and large, warriors. They have a skill the critics do not possess.

Full disclosure: Ann and I ran a side business for years where we assisted for sale by owners (FSBO) to sell themselves. Most were train wrecks. Even the sharpest civilians do better with a broker because they eventually have a weakness brokerage doesn’t possess. Even if getting lots of showings were easy (and it isn’t), FSBO sellers have one or more of the following weak links in their chain:

1. Overpriced Ogre. The picture of bias, this is the sort of seller who believes that it is still 2005, and that a new roof raises value by $10,000. They base price on selective perception, and they have the best house in the zip code-just ask them. 
2. Showing saboteur. This is why we even advise listed sellers to not be present. Most people either can’t sell their way out of a paper bag, trip themselves up, badger or pelt with information overload, or ask a dumb question. I can name a half dozen times when I have seen a seller ask a buyer of a different nationality where they were from in an effort to show off where the Visigoths and Plutonians lived in the neighborhood. Bad move to offend your potential buyer, there, pal. 
3. Negotiation knucklehead. I have seen owners lucky enough to get an offer fall on their spear plenty of times as well. Negotiation is not something most people do daily; it is best left to the professionals. Most people don’t know what questions to ask, how to ask them, or when. They get emotional. They let their ego affect their judgement. And they fail. 
4. Attorney Assisted Asshat. “I don’t need an agent- an attorney will represent me.” These people never heard of billable hours, and I never saw an attorney present at a home inspection. This mentality kills deals over a dishwasher. 
5. Agent Alienator. “No brokers!” In our area, most FSBOs are smart enough to know that cooperation with agents is wise; 85% of the buyers are working with one, and they are often the best qualified. They are just trying to save on half the commission. But others are hardcore, and to their detriment. 

For Sale by Owners have not gained market share. Alternative models have not gained market share. The same 10-20% of the market has been beating itself up for decades. And it will continue. You can’t beat a good broker. And you wouldn’t want to, unless you are the type that thinks that a guy who removes his own appendix should be congratulated for saving money.

The best in the business are paid the most because they are worth the most. Any business. That is why good brokers will never go the way of travel agents. 

If you have a short sale that is 6 months or more into the process, you’ll appreciate this: We got an approval yesterday on a home I listed in 2007. 

2007. 

It has been an odyssey to say the least: mystery liens, family tragedy, crazy buyers, deals dying, and 3 years of hard work. I listed this home in May of 2007 for $1.25 million. We had an all-cash offer that fell through, and mostly because the buyer was a lunatic who had a screw loose. The MLS eventually sent out a warning to all participants about an all-cash buyer that made people jump through hoops and then would have a “family emergency” on the day she was to sign contracts. The damage was done- the house was packed at the lunatic’s behest and the high school senior missed the football season. Long story. 

There were other offers and inspections, but no contracts. The house seemed to be the biggest magnet in the county for weirdos. People made offers and disappeared. Their agents disappeared. It was like the Twilight Zone and the Bermuda Triangle of real estate. Over the months and years my $1.25 million listing became a $699,000 short sale. 

Last year, we got another buyer. We have been working on the two lenders since last June to get the short sale approved. More Bermuda Triangle stuff: the BPO agent tripped and almost broke her neck right in front of me. 

Yesterday, we got the final approval from the 2nd bank, 1095 days after I first listed the house. When I called my client to tell her she cried and thanked me. I really hope this works. The house wasn’t snake bitten, it was bitten by a hundred of them. Keep your fingers crossed! 

I sold my first HUD home in the 90’s sometime. A HUD home, if you don’t already know, is a government-owned foreclosure that is administered by the department of Housing and Urban Development (HUD). There is a little bit of red tape involved in a HUD transaction, but they typically go well.  One rule HUD has on their homes is that they cannot be bid on by a non-owner occupant the first two weeks they are available. In other words, only owner occupants get the first shot at a HUD home for 2 weeks. If the owner occupants don’t bite, investors are allowed to bid. It works, and it fosters ownership among people that might not otherwise afford a home, or would get elbowed out by institutional professionals. 

Of course, the government can’t mandate what private enterprise can do. However, it would be good if the industry adopted this policy themselves. I have seen too many REOs slip through the fingers of qualified, perfectly good buyers and into the hands of cash investors to think otherwise. The investors then do a McRehab, resell the place at an inflated price, and the pattern continues, with affordable housing out of reach for qualified people.

As an aside, isn’t it ironic that a lender would prefer to sell to a cash buyer only? Isn’t that, from a “big picture” point of view, antithetical? If everyone paid cash, lenders would go out of business. I had Wells Fargo-approved buyers with a full price offer get rejected by a bank this week on a Well Fargo owned property because Wells wants CASH, not a 203k. Absurd and short sighted.

Banks should want owner occupants who qualify to buy their REOs for many reasons, but not the least of which is that these people will give those banks business. Moroever, it is good for neighborhoods to have owner occupants who can afford where they live. We should all want affordable home ownership supprted emphatically by lenders, not just where it is their last resort on their REOs. Too many qualified people have gotten rejected repeatedly and then discouraged from buying at a time in history when they are ready willing and able. Instead of them being comfortably in their own home with a $300,000 mortgage, some new slob is snookered into a $400,000 loan by the investor at resale and we now have another “at risk” property leveraged to the gills.

That is not a solution.

There is something wrong when the system favors cash investors to the exclusion of qualified owner occupants. It is like a Catholic telling me they don’t want to sell to another Catholic. Illogical, short-sighted, and yes, hypocritical. It will never happen and is not a “free market” solution, especially coming from a free-market oriented guy, but I can dream.

Dear Dr. Shlabotnik,

Thanks for your follow up email last night after our 8pm discussion. I appreciate your very specific instructions on how to handle the situation, especially our collaborative in-depth analysis of what the plan would be should the seller zig, and if the seller should zag. I can tell you really put a lot of thought into this, and I think your input has made me a better agent. I have closed over 350 transactions, but who says you can’t teach an old dog new tricks, right? And I am sure your anecdote about office politics at a research university has relevant real estate applications. I missed putting my children to bed, but that’s what wives are for, right? 

With respect to your email this morning, there are no updates since we hung up at 8:45 pm. I will be in showings today, and banks are closed until 9am Monday, so we won’t get any updates until midday Monday the earliest. If you need to call me, please do not leave me 6 stream of consciousness messages, as they tend to clog my inbox. 

Cheers

Phil

On Saturday, April 17, Dr Julius Shlabotnik wrote:

PHIL-

I WAS THINKING ABOUT THIS LAST EVENING AFTER WE HUNG UP AND I WANT TO EXAMINE WHETHER OR NOT …

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