In light of the fact that I just spouted about the importance of live classes over online courses, here is a great live event that is open to all local professionals: 

Westchester Real Estate Professionals puts on a monthly event at the Rye Grill that I have gotten great value from, and the coming event on April 29 will be no exception. Allan Dalton, RISMedia Chief Marketing Officer, will be speaking on Social Media for Real Estate Professionals with his “Dalton Don’ts and Do’s.” Mr Dalton has quite a resume and should hold up the organization’s reputation for giving fantastic value in their workshops. Among the feathers in his cap:

• Former President and CEO of Realtor.com
• Former co-owner, Coldwell Banker of New England with 32 offices
• Co-creator, Century 21’s Customized Marketing System

Not long ago, the licensing requirements for real estate salespeople in New York became more rigorous, with the 40-hour course expanded to 75 hours. It was a good move. I still recall my class in 1996, given by the real estate school at the Greater Rochester Association of REALTORS. My instructors were knowledgeable and engaging, the classes were lively and punctuated by debate and discussion, and I befriended a number of classmates at breaks, lunch and after class study sessions. Some of the throw away comments the instructors made even stick with me today. I was enriched if I never sold a house. 

New York has a 22.5 continuing education requirement for every 2 year license renewal, and we discovered a few years ago that I could take courses online for a fraction of the cost of live classes at my computer. Very convenient for busy people. So I took them. And learned nothing. And met no one. I witnessed no discussion, debate, or human interaction. It didn’t take 22.5 hours. It was mind-numbing. I passed online courses, but my education was not continued, I assure you. 

Now licensing courses are offered online, and I assert that whatever good the expansion of the course to 75 hours did, it is nullified by being taken online. You cannot convince me that the course which allows people to broker the largest transactions of most peoples’ lives is done justice by a mind-numbing reading and multiple choice process. This is especially the case in discussions of fair housing, agency law, and other matters of real estate that ought to be accompanied by discussion and direction by a competent instructor. Fair housing cannot be reduced to multiple choice questions. Fiduciary responsibility cannot be done justice by true and false choices. Ethics are far too important to be addressed with no discussion. 

I freely admit I am an education guy. I don’t have alphabet soup after my name, but I have a college degree and know know what role the campus, professors, and lectures played in my B.A. The only argument for online courses is convenience, but I would argue that ineptitude and lack of insight are far more inconvenient when introduced to a half a million dollar transaction. If you have to wait 6 weeks for a course to start you wait. Learning to plan is part of the business process. 

It is called education for a reason. It is not test-passing. We are about to introduce a generation of less qualified agents with this move. Convenience and microeconomics are bad reasons for weakening our collective minds. We need insight, linear thinking and empathy in licensees. The bar for entry needs to be raised, not lowered. Online licensing classes will end up being bad for the industry. 

Here in New York we have attorneys heavily involved in real estate transactions. Their function technically is to handle contracts, act as escrowees in the holding of good faith deposits, and examine title. They are another advocate for our clients. By and large, most attorneys play it straight and do not mother hen, interfere, or sabotage. But some do. I could write posts on attorneys who take a week to send contracts out, debate language with the other side’s lawyer until the buyer walks, who won’t return phone calls, or who 2nd-guess brokers until our credibility with the client is undermined. The subtext is typically an unspoken but all too evident attitude that they are higher on the food chain than brokers. 

The latest shenanigan I am seeing is the practice of talking buyer clients out of buying a short sale. 

Let’s back up: In Westchester and the surrounding areas, it can take 2-3 weeks for contracts to be fully executed from the day an offer is accepted. Once you have a meeting of the minds, inspections have to be done (the inspection contingency is not something lawyers around here want to deal with). Once inspections are done, memos go out if they haven’t already. The buyer’s attorney then sets up an appointment to meet with the buyer and go over the contracts. Often, the contract is sent back with changes that the seller’s attorney has to review and, of course, go over with the seller. Once all that is settled, the buyers sign. If anything comes up at that point, their attorney can “hold” the contract and/or their deposit until the issue is settled, the signed contract and deposit are sent to the seller’s attorney. Most of our jobs in the first month of a transaction is, frankly, to nag the crap out of the paralegals to ask where the contracts are and what can be done to get to the next step. 

Nagging paralegals. I did not go to college to nag paralegals. But it is the only thing I can do. 

All the while, we are bound by the rules to disclose that there is an accepted offer on the house, scaring away many prospective buyers. If the deal doesn’t go together, we could lose a month of precious time on the market.

And twice in the past week, I have seen deals die when the buyer’s attorney advises the client that they should not buy a short sale. They like the house. They can afford the house. The attorney is probably too lazy to know that I have closed 18 out of the last 20 short sales I have had go under contract. They just don’t feel like holding the buyer’s hand that long. So they scare them and they walk. They piss on the herculean efforts of the agents and squash the prospects of the sellers to sell with dignity, because we not only lost a buyer, we lost time to find another buyer. I was never given any good reason, just that they know better than I do. Sure they do. They know next to nothing of the particulars of the transaction or who is working on it, and do not bother to find out. They just kill it because that’s what they do. 

And people wonder why I rant about attorneys! 

April is Fair Housing Month in observance of the 1968 landmark legislation that ended housing discrimination by law. It seems hard to believe that a generation and a half ago that the things we take for granted were the subject of debate. Fair housing and equal access are so ingrained in our collective minds and profession that it seems inconceivable that we would ever discriminate based on race, religion or anything else for that matter.

I recall hearing Cornell West giving a history of fair housing and telling how race was even written into FHA underwriting guidelines, how licensees would block-bust and steer, and even how in California, Proposition 14 was passed with a 65% vote in favor to overturn the Rumsford Fair Housing law in 1964. Sadly, some advocates of Prop 14 were licensees invoking private property rights. The Supreme Court overturned Prop 14 in 1966. It would be another 2 years before the Fair Housing Act would become the law of the land.  

I am white. My wife is of Korean descent, so our children are bi-racial. My older brother’s children are ethnically Dominican and Guyanese. I can’t imagine anyone looking at use sideways in this day and age, yet there was a time when we could have been discriminated against, simply because of family members who looked different. 

Willie Mays, one of the greatest baseball players ever, had a rough time buying his home when the New York Giants moved to San Francisco in 1958. 

Yankee great Mariano Rivera walked out of a real estate office in the 1990’s when a really stupid agent who didn’t know who he was judged him by his appearance. Anyone who heard this story is amazed.

We should take this time to re-dedicate ourselves to equality in housing, fairness in our industry, and the incredibly important role we as licensees play in the observance of what is actually, in context, a new idea.  

Certain details are simplified for expediency. 

Recently, we had a short sale fall apart because the buyer’s circumstances supposedly changed and they could no longer qualify. It stunk a little, and the attorney, who had done yeoman work to get the short sale approved, indicated she felt that the deposit should not be returned. We had been told that the buyers mortgage commitment had been issued a month prior; we were never furnished with a copy, and therefore we were never privy to the conditions. 

In the end, because we were left in the dark and the threat of a lawsuit and subsequent lis pendens would imperil the seller client to sell to another buyer, the deposit was released. 

Just yesterday, on another transaction we are working on (not a short sale), the buyer’s mortgage company informed the borrower that they would not close until certain repairs were made to the house. The buyer, concerned that the repairs would derail the transaction, threatened to walk. When they were told they risked their deposit if they broke the contract, they claimed that the conditions of their mortgage gave them an “out.” 

Guess what? We had not yet received her mortgage commitment, 3 weeks after being told it was issued. 

Why would the seller embark on repairs if there is no commitment in his hand? 

Worse, how could it be good faith to purposely withhold the commitment just in case you wanted to not complete the transaction? The answer, of course, is that it is NOT good faith to withhold the commitment if it has been issued. It isn’t a clever faith deposit, it is a good faith deposit. 

The conditions of a mortgage commitment, as well as its very existence, are the seller’s business if he is in contract with a buyer. The seller nullifies all other possibilities of selling, taking advantage of the tax credit, the Spring market, and other options when he goes into contract with a buyer. The seller depends on the buyer to be transparent and have integrity. It may be clever for the buyer’s attorney to “hold” the commitment to “protect” the client, but it is also bad faith. It is not advocacy to operate in bad faith. It is just bad faith. 

I should point out that on the latest example we received the commitment today. Work begins tomorrow. 

Arrowcrest is small, exclusive neighborhood in Croton on Hudson that has a beautiful view of the Hudson River and abuts Hudson National Golf Club. The striking thing about the development is the great job they did to blend Arrowcrest homes in with the wooded nature of the area. The builder did not “scorch the Earth” and clear cut every inch the way I have lamented in the past. This is not only prettier, it yields more privacy for the homes. Although the oldest home here is only about 12, the maturity of the Arrowcrest neighborhood makes it feel far more established. 

The subdivision was built mostly from 1998-2000. The average Arrowcrest home is about 4000 square feet with a 1-plus-acre lot. The last three sales in the development, all within the last 6 months, ranged from $875,000 to $910,000. There is a homeowner’s association. Despite the atmosphere that suggests the contrary, the neighborhood enjoys municipal services for water and sewer- no wells or septic tanks here. Homes feature 2 car garages, full basements, central air conditioning, hydro air heat, and kitchens and master suites to die for. 

The school district serving Arrowcrest homeowners is Croton-Harmon, which encompasses Tompkins Elementary, Van Cortlandt Middle School, and Croton-Harmon Senior High School. In addition to the golf course next door, there is Croton Point Park, Teatown Nature Reservation, and shopping in Mt Kisco or Peekskill is also close by. The Village of Croton is 5 minutes away down Riverside Avenue. To get anywhere from Arrowcrest you drive down the main road with a spectacular view of the Hudson River. 

There is to be sure plenty of upscale housing in north Westchester; however, to get newer vintage homes in a wooded setting with a view of the Hudson is rare, and that scarcity makes Arrowcrest special indeed.

I just received a “rebuttal” to feedback I left on a home I showed earlier this week. 

The issue was that this 3 bedroom home wasn’t really a 3 bedroom home unless you like walking through one bedroom to get to another. The only solution would be to cannibalize the middle room with a wall to create a hallway, rendering the room absurdly tiny. There is no good answer. The “hall” solution created a new problem. There may be people who didn’t mind the tandem arrangement. One thing is for sure- nobody likes closet-sized bedrooms. 

My point, of course is not about floorplans; it is the misguided notion that a smart answer can make a house you don’t want to buy suddenly feel like home. More and more lately, I have found myself avoiding debates with listing agents as if their ability to rebut an objection will change my clients’ mind. It probably won’t, but it will waste time. People choose a house because it feels like home. I never saw anyone buy a home because of a clever answer from the listing agent. Did you ever have a buyer tell you they bought the house because of the listing agent? Mine say it felt like home. 

There are some rare exceptions where the listing agent has to find an answer, but that is uncommon to say the least, and is usually solicited by the buyer in some way, such as figuring out how to make a back yard more private (hedge) or troubleshooting a dilemma the buyer has with logistics. However, that seldom occurs, and is not the sole creation of the listing agent. 

Outside of these chicken’s tooth instances, I find myself subject to surveys, questionnaires, and phone interviews eliciting insightful answers when the fact of the matter is that the people just didn’t like it enough to make an offer. If I am stupid enough to say that it was nice, or priced right, I then get chased to make an offer. People are now obligated to make an offer on a home they feel is nice but not for them? If that were so I’d have married my junior prom date. The feedback train has become derailed.

The tone of feedback request calls has become almost comical, as if I forgot my homework. I don’t owe you a B.P.O. I don’t owe you a 5 minute discussion on why my buyers don’t want to deal with paneling or wish to live 90 feet from a high tension wire. Chances are you already know why people haven’t bought your listing. So why harangue me? Tell your sellers I showed 20 houses this week and only 1 got an offer. The rest didn’t. 

Here’s your feedback in advance: 

• It’s overpriced.
• It was a mess.
• It didn’t fit my client’s needs. And no, I don’t owe you an in depth discussion of what my clients’ needs are so you can steer me to your other listings. 

Nothing you can say, rebut, answer or solve will change our minds. It just didn’t feel like home. 

I have blogged before that the stimulus package, set to expire April 30, has fulfilled it’s purpose. Sales in Westchester for the first quarter of 2010 have dwarfed those of the 2009 first quarter. This may seem hard to believe, but that $8000 tax credit is now over a year old. The Westchester County housing market, good or bad, has been reflective of this law for quite a while. With no substantive efforts I know of to extend the credit, after May 1 Westchester will have a more organic market with which to either put up or shut up. 

So what will happen May 1st? Will buyers give up, now that the tax credit will be gone? Will Westchester sellers get more motivated now that a small piece of leverage they enjoyed will be gone? 

Yes and yes. It will remain a buyer’s market. Here is what I think will happen after April 30, 2010. 

• Every house will lose $8,000 worth of value. Poof. Buyers will try to compensate for the loss of the credit by negotiating lower prices. Sellers will have little choice but acquiesce if they want to move. 
• Sellers will get more motivated, and in many cases, desperate. Because of the perception that buyers have less reason to act, sellers will try and create their own incentives by lowering prices, being more negotiable, and doing more to make the deal work. 
• Smart buyers will exploit a more pensive seller population to their advantage. Think of it this way: after “cash for clunkers” disappeared, crickets began to chirp again in the auto industry. Buyers who bought afterward had a captive audience at the dealership. The same will happen in housing. 

For better or worse, the buyer herd will thin on May 1st. Fewer buyers will yield fewer showings, fewer offers, and fewer deals. New listings to the market will be priced more aggressively. People who have to sell will cut as low as they can go and then some. The buyers who remain in the market will likely strengthen the upper hand they have already possessed for the past few years. it will mean more than the seller throwing in the garden set or snow blower.  The market will try to compensate for what the government takes away and smart buyers will take advantage. I welcome crystal balls and differing opinions.  

I don’t know whether to tell you to buckle your seatbelt or tighten your belt. 

I started out as a sole operator in 2005. I hired my first licensee in 2006 and as of April 1 we have 20 members on our team with more coming aboard soon after. Some are former clients; some are agents we did deals with before and liked me (no accounting for taste). Whatever the reason, the team is growing because our company is a good place to build a real estate career. 

Ann and I are a team, with her as the administrative goddess and myself in the Hot Air department. It works. Our agents have great backup on both fronts. What’s more, which I think is important, is that we appreciate our team members. We know that earning a living is no laughing matter, and whether the issue is training, marketing, getting a tough prospect signed on, troubleshooting a problem transaction, or dealing with a challenging client, I am right there are the table with my team, and we have a great record of getting to the goal.

Yes, we have a good commission split, and yes, we think our signs are pretty. It is more than that. I have a relationship with each and every associate with the company, and the priority is their growth and development in this industry.

If you are in New York or Connecticut and in the Metropolitan area, we are hiring. Westchester, the Hudson valley, Connecticut, Long Island, and the New York City Boros. Here are a few of the areas we could use good agents in particular:

• Westchester County
• Upper Manhattan and Riverdale
• Queens
• Fairfield, CT
• Rockland and Putnam Counties

In many cases we need agents because I can’t follow up on leads personally. What I can offer personally is support, training, mentoring and a system that works.