Birch Court in Ossining, the former grounds of Briar Crest Nursing Home.
I am one of those brokers who vocally opposes the practice of using appraisers who do not possess local knowledge of the area they work. I have seen too many sales scuttled by robotic, ill-informed appraisals which lack the context that local, more accurate information brings. Out of area appraisers often are less engaged, and are there by economic necessity than local expertise. It is a problem.
So you can imagine my consternation this afternoon when I met an appraiser at one of my listings when he told me that he came from 90 minutes away in Kingston, New York. That is closer to Albany than it is to Ossining.
It was too late for sour grapes, however, so I instead engaged him on the property and what it had under the hood. I had to focus on that, because otherwise I met get emotional. Not because I need the sale. The subdivision was built in 2007 and stood on the former grounds of Briar Crest Nursing home. I worked there the summer of 1986 after freshman year of college, and my father died in hospice care at Briar Crest on July 8, 1993. I can’t drive by the street and not think of him.
But I had no time to get into any of that before Peter, the appraiser, told me “there was a nursing home here, you know.” I knew, I said. And I then learned that Peter’s father was at the very same nursing home before passing away himself in 1991. The conversation of course, took a different direction at that point, and we shook hands in solidarity at losing those who mattered most to us literally yards away from where we now stood. Peter had never appraised a home in this development, but he always watched it. He knew it inside and out because of the obvious significance of where it was and what it meant.
Suffice to say, I have zero doubts about this appraiser’s knowledge of the locale. And I seriously doubt he’ll be robotic on this one. Sometimes these deals occur close to the heart, and you never know when the world will suddenly shrink to the seize of a few village lots.
One of the Facebook discussion groups on real estate I frequent is the aptly titled “Raise the Bar” forum where we discuss best practices and making the industry better. Because real estate is local and customs and laws vary by region, opinions often vary. Many themes resurface from time to time, among them the the question of whether a listing agent being present for showings helps or hurts their clients’ chances for sale.
Rob Hahn, a very respected voice in our industry, asked the question of lock boxes specifically; if their eradication would not be a good thing. Rob made the case that, as a seller, having his advocate there for showings would be a help. The listing agent, after all, knows the house best, can tell the home’s story, and feature it’s many features and benefits. The buyer agent may have never seen the property before and would therefor be at a disadvantage.
The counter to the argument was twofold: having the listing agent present for all showings would be inefficient, and that buyers prefer to not have the seller or their agent present for what should be a private tour of the property.
My opinion, as I have stated before, is that it is better for the buyer agent to have privacy with their client free from the background noise (or more intrusive, in some cases) of the listing agent.
The logical outcome of eliminating lockboxes would be one of two things: Forcing agents to pick up keys elsewhere, or forcing listing agents to accompany all showings. In both cases, it would be a logistical nightmare, with the latter having showing agents answer lots of questions with “I don’t know but will find out”.
There might be some anecdotal instances of the listing agent “selling” the place, but in general people don’t buy if it doesn’t feel like home, and nothing an agent says will create that feeling. Ask anyone why they bought their home, and the least-heard reason will start out with “the agent said…” Buying a home is a personal experience. Intensely so. I have often drawn the comparison of being in a clothier’s dressing room. It is you and the mirror. People want to be alone with their thoughts and their peeps, not have an outside voice telling them things that may or may not even be important.
Sales is identifying a need and filling it. Knowing the house is half the equation. Knowing the buyer is more crucial. Just because a listing agent knows the house doesn’t mean they can strike the necessary (and often intrusive) connection to the buyer to adapt the home to the buyer. The buyer agent knows the client better and what their needs are. They should be the ones conducting the showing, and if there is a story or unseen benefit of the home, it should be neatly typed on a piece of paper for them to use at the showing, alone with their clients.
There are no lock boxes used in Manhattan, just a half hour south of me, so I am keenly aware of how hyper-local the practices and protocols can be. And I fully recognize that in the cases of multi million dollar properties in Westchester, the listing agent will often accompany -although thatdoesn’t always work out too well.
I believe that lock boxes, especially the Sentrilock system we use which is all digital and far more secure than old-style combination lock boxes, work best for my clientele. For those that feel otherwise, they are free to conduct their practice as they best see fit. It is not a one size fits all industry.
Late last month, theNew York Department of State issued an interesting opinionthat effectivelyended the practice of brokerages giving corporate titlessuch as “Executive Vice President” and “Managing Director” to their licensees. It was a practice mainly done in Manhattan (and we did name a VP once in full disclosure), and became so prevalent that it almost lost its meaning; you’d walk into an office of 100 agents, and 50 would be vice presidents. From the letter:
If an agent advertises falsely that he or she holds a corporate title, it would be considered “dishonest” and “misleading” because doing so would lead the public to believe that the brokerage entity has appointed or elected the agent as an officer or to a comparable management position.
I can see how a consumer might be mislead by thinking that if they were working with a Vice President that they were working with an actual executive of the firm on a salary when in fact they were just a licensed salesperson with a 1099 independent contractor agreement.
Kind of.
I think most people know that a lady blowing up a balloon for an open house and or a guy crouching down to show a sink’s drain trap is not an actual member of the company’s managing board or possessed voting stock. It just became over done- it seemed like every 3rd licensee I ever dealt with in Manhattan was some sort of Vice President.
In my experience in sales in two industries, “Vice President” has always been more of a rank of management. And I have walked into many bank branches and dealt with a head teller on a paltry salary with “Vice President” on their card. I never believed for a second that guy in the bank sat on the actual board of the bank. If they didn’t, what were they doing counting my jar of quarters for? But my opinion doesn’t matter. We have to abide by what the DOS (Department of State) thinks, and the titles are all gone.
So what now? Does an industry that specializes in marketing and self promotion just embrace boring? Or will we see more creativity in titles, just of a non-corporate nature? I don’t doubt for a second that creative titles will embellish Licensed Salesperson and Associate Broker on business cards very soon. Ironically, as founder and owner of my firm I never used the title “President,” although I could. I could start to, just to press my new advantage, but I know my colleagues will get competitive in the title department somehow in the very near future.
A few suggestions:
Overlord
Potentate
Viceroy
Despot
Czar (or Tsar)
Nabob
Kaiser
Jedi
I even created a proposed card with a another idea or two. Think I should order 500?
Three times in the past two weeks, we have had listings go in bidding wars. Three times in the past two weeks, we have had buyer agents tell me that their buyer client did not believe me that they had competing bids. In each case, those buyers all lost the house. In my own company, we have also had buyer express doubt that there were other offers on a home they wanted to make an offer on, and in those cases too, they didn’t get the home.
Bidding War: Briarcliff Manor Bidding War: Yorktown Heights Bidding War: Ossining Multiple offers: Yonkers, Garrison, Carmel, Hopewell Junction, and probably a few others.
The assumption that a listing agent is lying or fibbing is rooted in the old stereotype that real estate agents are deceitful and will say or do anything to make a sale. The joke about being like used car salespeople often has the punchline of “hey, don’t insult used car salespeople.” The problem with that is that it is untrue. For every deceitful real estate agent you can show me, I’ll point you in the direction of 99 decent, honest and upstanding licensees. Liars don’t last, especially in the market we have seen the past 5 years.
Just think about it pragmatically. An agent lies that there are other offers. You call his bluff and don’t proceed. If he or she is lying, the home remains active and available. Who wants that kind of egg on their face? And what about the liability that might result? No thanks. Instead, what is happening lately is that the home goes to contract quickly, and the cynical buyer is back out there trying to find a home because they didn’t believe what they were told.
From my own point of view, lying would be suicide, if only for practical reasons. I have over 30 agents, the firm has over 60 listings, more than 20 transactions in process, and the permutations of interactions, messages and conversations with other agents, lenders, lawyers, appraisers and the like would mean that my frazzled, overworked and sleep deprived self would have to remember two versions of every conversation in order to protect a fib. I’m 45. I have a wife and 4 kids at home. Life is easier when you have one version of anything to recall. Inadvertently being caught in a lie would be a huge danger with all those moving parts. I don’t even know how I’d keep it all straight.
It is all out there in the media. The bust is gone. Loss of value is gone. Prices have stabilized and risen in some cases. If a listing agent claims to have other offers and you don’t believe them, I suppose you could verify with something in writing from their client or broker, but I would err on the side of trust. Things move quickly in a busy spring market, and the balance of leverage has shifted in many cases to the advantage of the sellers.
Inman News, the nominal online trade publication for the real estate industry, ran a contest last week for innovative marketing ideas on Twitter under the hashtag #MadRESkillz. It sounded like a bit of fun, and at the encouragement of Inman reporter Teke Wiggin, I offered a few of my own suggestions; I wrote about using a QR code to have consumers see a video of a listing on their cell phone right in their car without having to call or text anyone, and several others.
One idea, the concept of pricing property with a crooked number at the end instead of -900 and -000 was selected as a finalist.
The other finalist was a brokerage in New York City that stated that 36 of their agents had the firm’s logo tattooed on their body.
The body art won.
This week, I was encouraged to participate again, and I did, but was not selected as a finalist. The selections were a flirty yard sign and a photo of a presumably dead bare foot sticking out of a doorway. The screenshot is below.
“Tattoos are nice and fun on their own but within the real estate industry I’m not sure that send the right message or image out to potential clients — kinda like seeing your attorney with a tattoo of his/her firm on their arm,”wrote Ann Lee Faranda, co-owner of J. Philip Real Estate.
But Faranda is not exactly an unbiased source. Her husband Phil Faranda, the other co-owner of J. Philip Real Estate, was Rapid Realty’s opponent for this week’s #madREskillz. He submitted the marketing idea of pricing listings according to their area codes.
I seriously doubt that if I were a consumer that I would care about my agent having a tattoo of their brokerage on their body, and I’m pretty sure that I wouldn’t want a photo on my listing suggesting that someone is sleeping in the buff or demised in my bedroom. But I do appreciate that some brokers have some creative ideas for making their listings stand out, and it is clearer still that things have improved in the market enough for some of us to have some fun again. It has been a rough 5 years, and morale is up. And if the licensees are happy, I am sure their clientele is doing better as well.
Among the pitfalls of running a business with your spouse is the perception that the less gabby prominent or public half of the team is any less important or vital to the success of the organization. I am sure that this is the case in some businesses where the missus or hubby help on weekends and stuff some envelopes or file widget invoices. It is not the case in mine our firm. The Broker’s Wife in our company is one of the key reasons for our success, and her business chops are stellar.
The Broker’s Wife in our little enterprise has an undergraduate degree from Columbia University. She has an MBA. She has worked for huge multinational corporations. She has collaborated on the non profit side with Nobel Prize winning projects.
The first time The Broker’s Wife hosted an open house, she sold it to the eventual buyer. When she suspected that the buyer was trying to work around their buyer agent, she virtually did forensics to confirm her suspicion. Then, instead of trying to earn both ends of the commission on the back of an unfortunate colleague at another firm, she made sure that the other agent got their well-earned credit and broker fee. Our reputation, she stated, is more important than any monetary gain.
The Broker’s Wife seethed when snooty receptionists at other firms (it is ironic to be snooty when you are working banquet waiter hours on a weekend morning, by the way) acted dismissive, disrespectful, territorial or hostile when they hadn’t heard of her husband’s firm or treated us like interlopers. She seethed, but held her tongue (mostly) and worked on making sure they knew us the next time we crossed paths.
While she still has the odd male flirt with her in grocery lines, this isn’t the Broker’s Wife’s first trip to the rodeo. As a teen, she stood between an armed robber and a shopkeeper in New York City, winning a war of nerves until the coward gave up and left. Her organizational skills notwithstanding, her backbone is awe-inspiring.
The Broker’s Wife does the books and taxes for tens of millions of dollars in transactions brokered. She is the administrative genius that sees to it that the maelstrom of 60+ listings, 30+ agents, dozens of pending transactions, and thousands of details are attended to in an efficient, businesslike and professional manner. Her ability to do the details allows me, the broker, to focus on the big picture. She does see the big picture too. She made sure that the first dishonest agent we ever had was promptly terminated, stating clearly that this time they cheated us, but what if they cheated a client?
The Broker’s Wife is the Chief Operating Officer of the company. She is the reason the company has grown, she is the secret weapon, and nothing that the broker gets all the credit for could be done without her extraordinary abilities. We won’t get into the 18 hours days, the 5 languages she speaks, her piano playing, the four children, including one with autism she cares for like a champion, and the exponential factor of foibles that she puts up with in her husband and business partner. That’s not the focus here.
It has been weeks since I last updated this blog, and it isn’t writers block, indifference, or slow news days. I am busy.
I don’t mean active, or experiencing the typical cyclical upswing of the spring season.
I am busy. Really busy.
I started the firm in late 2005, and it took me 9 months to prime the pump with any significant number of clients. By mid 2006, I had clientele for sure, but the market was then going through what was then referred to as a “soft landing.” A year later, the sub prime crisis hit. The year after that, Wall Street’s sinkhole almost brought on a barter economy. I have never really participated in any exuberance, rational or otherwise, as a broker.
Until now.
I am in the midst of multiple bids on three listings as I type, several quick accepted offers on others, and inventory has shrunk to a level so low it is almost absurd. Consumer confidence has come roaring back, and I am seeing buyers drop inspection contingencies, mortgage contingencies, and doing as much as they can to get their offer accepted ahead of the competition.
There was a time when I would go over market activity with sellers to price out their home and the MLS would have a very long list of active, unsold properties and an all to short list of sold properties. That ratio has now flipped: there are as many sales as there are available properties, and in some case fewer available homes than the closed properties. Buyers have fewer options, and it is making them act. The leverage that buyers could exert just a short year ago has all but evaporated, and sellers have regained leverage with a vengeance.
I recall 2007 when banks severely curtailed their underwriting guidelines to minimize risk and remarking how quickly the pendulum had swung to the disadvantage of home sellers back then.
How quickly the pendulum has swung back.
This is not to say that overpriced homes will sell or that happy days are here again for good. Overpriced homes still get stale. But homes priced right, instead of inexplicably sitting lonely and unsold in the lean years of 2008-2011, are now selling briskly to eager buyers with some robust competition. Buyers no longer possess the leverage to hold the seller over a barrel anymore. Balance is back. Values have stabilized and in some cases, gained strength.
I have not had the time to post market stats locally, but I will soon. My observations are that of a guy out in the field, watching this all firsthand. It is a sight to behold. It isn’t “easier” for a variety of reasons, not the least of which is the return of neophyte agents who don’t know their job too well and the accompanying headaches, the consumption of time to handle multiple agents regarding the same property, and the endless work of quality control on higher volume. But consumer demand is back, sellers can sleep better at night now, and we no longer risk giving away the farm- literally- to consummate a sale. I am almost ready to say the R(ecovery)-word.
As I stated to a seller client who wondered aloud if we had under priced their home after a huge bidding war on their property, we are witnessing the transition to a new market where, finally, the wind is at our backs.
We had our monthly company meeting today and discussed, among other things, how best to best help buyers in the purchase of their home. In the group discourse on what is important to a real estate consumer in 2013, the matter of consumer research was looked at critically. There are some basic truths:
Brokers are no longer the gate keepers of information.
Brokers are no longer the gatekeepers of what home are available for sale.
Brokers are no longer the gatekeepers of aggregate data.
Brokers are still needed because our value proposition is not information, but of advocacy and guidance.
In my recent experience atHear it Direct, a solid 18 out of 18 consumers said their broker was worth their service fee (commission). Most, if not all, would use the same broker again, or at least use a broker in their next transaction.
So here is what is so funny that I pointed out to in our meeting. Consumers, who agree that brokers are necessary to their home purchase, research everything about their prospective home, such as schools, neighborhoods, crime, demographics, market stats, municipalities, local laws, and almost anything else you can think of.
EXCEPT their broker.
I can’t tell you how many times I have spoken with people who knew incredibly granular data about their community of choice, but then either dealt directly with a listing agent with no advocate of their own, acquiesced to dual agency, or just used some guy they met at an open house. Time and time again, especially in stories of less than positive experiences with agents, when I get to how the consumer chose their representative, they reveal that they didn’t really research or vet the person who would broker the largest financial event of their life.
That blows me away.
Yes, research. Learn about the community, the walk score, the schools, crime, and neighborhood amenities. But for God’s sake don’t trash all that hard work by using a sub par agent to represent you.
Roughly two thirds of our company listing inventory are homes that were listed with another brokerage that expired unsold before hiring us. Typically, their last agent was a family referral, social friend or neighbor, or casual acquaintance. Many of our buyer clients worked with other agents before engaging us as well. They didn’t interview multiple agents. They just figured that the Multiple List was the Multiple List, or that all buyer agents unlock doors the same way, and that their agent would do. And they lived to regret it.
I don’t blame these folks for researching everything carefully but their agent. I blame our collective industry for failing to educate the public. HOW you research an agent will be for another post, but suffice to say that a little thing known as Google, track records, personal references, and transparency go a long way. THAT you research an agent before hiring them, however, should be an absolute given necessity for any consumer. We are not all the same, and I’ll take it a step further and say that an agent who doesn’t sell a lot may be a better match for some than someone who closes lots of deals. The important thing is to find the right match, and when consumers know to do that the rising tide will carry all boats.
This past Wednesday I had the privilege of being one of the industry panelists at a unique real estate conference at the Papermill Playhouse in Millburn, New Jersey calledHear it Direct. The format had group discussions with six home buyers, six home sellers, and six Generation Y buyers & sellers to discuss their experience and insights in the marketplace dealing with agents. Tough questions were asked, and in many cases tough answers were given which, for many in our industry, were uncomfortable to hear. It was an unfiltered view of the consumer experience from their own mouths, the good, the bad, and the ugly. After each consumer panel the moderator would then discuss the session with a panel of industry professionals, and I was on the panel discussing the home sellers.
What got me interested in participating was a video I saw a few weeks ago from the west coast event, where the Gen-Y panel wasdownright harsh in their assessment of how their agents handled their cases. Just watching it made me cringe. We’ve all heard the stories, and in many cases, we have been on the other side of transactions where we had to deal with “that agent.”
Since the advent of the Internet in real estate, there has always been a sentiment among many that brokers would go the way of travel agents because of the consumer access to data. That has not been the case because youdon’t buy a house the same way you book a flightor buy a book online. However, the industry is changing, and professionals have been inundated with new shiny objects as well as tens of millions of consumers who have come of age since the downturn for whom technology is an afterthought. To them, having an email address or website doesn’t make an agent special or forward thinking.
Agents have responded by often becoming even more automated and technologically sophisticated. Technology on the wobbly shoulders of 90’s “look at me” image marketing (on the wobbly shoulder of decades of being the gatekeepers of information, which we aren’t) has created a disconnect with the consumer, even among the most well meaning licensees. We literally have to unlearn much of the way we were taught to transact business in order to reconnect with our clientele in a meaningful way.
That isn’t easy because there is no blueprint.
We can’t Google a simple solution the the challenges facing the industry.
So I expected a rough atmosphere at our event. It had its moments, but the takeaways, insights, AHA moments and reaffirmations of things I knew were incalculably valuable. The discussion of what consumers want from their agent in today’s world, what they hate in their agent, what they’ll do differently next time, and dozens of other things will impact how I model the architecture of my company going forward. I will write about my insights in future posts, becauseonearticle tonight will not do it justice. Suffice to say, what will make brokers survive and thrive in the 21st century will not be shiny objects or techy webby gizmos. It will be the same qualities that have have been archetypes of great organizations and societies since we started writing stuff down. How utterly simple, yet utterly counter intuitive.
Communication. Responsiveness. Caring.
Yeah. That stuff.
As I told the Hear it Direct co-founder, my friend Sue Adler,this experiencewill make me a better broker. The cynic will say we should already know this. Well, duh. We know it. It isn’t about understanding the idea. It is about implementing it the way we need to in order to get the right outcome. You can’t take it for granted. And you don’t know what you look like from the outside. We strive to do this stuff every day. Now we have game films. The good news, from the mouths of consumers themselves, is that when we deliver on what they truly need, we are worth every penny we are paid.
I am ALWAYS interested in being a better broker and building a superior, cutting edge brokerage. This may be a small distinction, but it is powerful: up until this week, I always built my firm to be a tech-forward firm that cares. Going forward, we will be the caring firm that is tech forward. It is a subtle shift, but powerful. Identify the real need, not what we think they need, then deliver. Simple. When was the last time our industry empirically identified the need?
Since I have recorded my commentary in this blog, I have had exactlytwoexperiencesthat I expressed certainty would elevate my game. I now have a third. As I said to Sue after the conference, Hear it Direct could well eclipse her amazing production accomplishments as her legacy to the industry. It is certainly going to help us. Consumers should know we are listening, and we will not accept status quo.
The National Association of REALTORS is the largest trade association in the country. Most member Realtors join their association because it means MLS access, and don’t quite get the benefits of membership. This isn’t to say that everything local, state and the National associations do is right; I have been a vocal critic of NAR at times, but this is not one of those times.
Recently, a Florida Realtor,Jeff Launiere, wassuedfor a fair housing infraction because someone found a home while searching on his website that contained verbiage that violated fair housing laws. The only problem was that this was not Jeff’s listing, he didn’t write the remark, and no human being can screen the thousands of listings on their Multiple Listing Service feed for that kind of nonsense.
The short version of the story is that he went to his brokerage for help, and corporate counsel apparently decided that settling was cheaper than fighting, He was asked to sign something that would not clear his name and “settle” despite an obviously case of mistaken identity, because, as I said, it wasn’t his listing or his fault. For several days, the Realtor community was abuzz about this madness and the unfortunate fate of our colleague who did nothing wrong.
Today, thanks in large part to intercession from NAR, the lawsuit was dismissed. As Jeff stated on his blog:
I just received word from Laurie Janik, Chief Legal Counsel at the National Association of Realtors that the Lawsuit has been dismissed.
In NAR’s Facebook group, Ms Janik cited the Communications Decency Act of 1996 as a law that protects publishers from liability for content provided by others. Bottom line: Mr Launiere was asked to sign a statement that would not clear his name in the interest of settling for legal expedience, and he pushed back. NAR helped to an unknown degree (and they told Jeff he the suit was dismissed), but it is clear that they interceded.
Madness did not prevail, and a good man got to clear his good name.
I could write more on dozens of other matters, but this is Jeff Launiere’s day. Add that to the list of things your association does for you.
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The Blind Spot in Consumer Research
In my recent experience at Hear it Direct, a solid 18 out of 18 consumers said their broker was worth their service fee (commission). Most, if not all, would use the same broker again, or at least use a broker in their next transaction.
So here is what is so funny that I pointed out to in our meeting. Consumers, who agree that brokers are necessary to their home purchase, research everything about their prospective home, such as schools, neighborhoods, crime, demographics, market stats, municipalities, local laws, and almost anything else you can think of.
EXCEPT their broker.
I can’t tell you how many times I have spoken with people who knew incredibly granular data about their community of choice, but then either dealt directly with a listing agent with no advocate of their own, acquiesced to dual agency, or just used some guy they met at an open house. Time and time again, especially in stories of less than positive experiences with agents, when I get to how the consumer chose their representative, they reveal that they didn’t really research or vet the person who would broker the largest financial event of their life.
That blows me away.
Yes, research. Learn about the community, the walk score, the schools, crime, and neighborhood amenities. But for God’s sake don’t trash all that hard work by using a sub par agent to represent you.
Roughly two thirds of our company listing inventory are homes that were listed with another brokerage that expired unsold before hiring us. Typically, their last agent was a family referral, social friend or neighbor, or casual acquaintance. Many of our buyer clients worked with other agents before engaging us as well. They didn’t interview multiple agents. They just figured that the Multiple List was the Multiple List, or that all buyer agents unlock doors the same way, and that their agent would do. And they lived to regret it.
I don’t blame these folks for researching everything carefully but their agent. I blame our collective industry for failing to educate the public. HOW you research an agent will be for another post, but suffice to say that a little thing known as Google, track records, personal references, and transparency go a long way. THAT you research an agent before hiring them, however, should be an absolute given necessity for any consumer. We are not all the same, and I’ll take it a step further and say that an agent who doesn’t sell a lot may be a better match for some than someone who closes lots of deals. The important thing is to find the right match, and when consumers know to do that the rising tide will carry all boats.