Buying March 10, 2013

Grand Salami

AsbestosHome inspections are so important that, unlike most markets, local attorneys will not draw up contracts until they are settled. They are never a contingency of the contract in Westchester. Today we  had a home inspection on a property our clients had a recent offer accepted on, and it did not go well at all. Surprisingly, in spite of the many updates and renovations made by the current owner in the 8 or so years they have owned the place, such as a new kitchen, baths and furnace, problems found were so bad that our clients elected to not proceed with the transaction.

There was not one, not two, not even three, but four major issues discovered by the end of the inspection. First, we found termite damage in the garage, then the basement. Then, mold in the basement. After that, evidence of a fire in the home (!). To wrap it up, material that could contain asbestos was identified.

Termites, mold, fire, asbestos. A grand slam. Just one of these situations can hamper or kill a deal. Two of them typically kill a deal. Four? Forget it.

I work for the buyer; my first job is to be their advocate. Could we get the seller to address all the issues to their satisfaction? Perhaps, but am I supposed to twist their arm if they’ve lost that loving feeling? If they truly loved the house they could deal with curing the troubles and staying in the deal. They still may. But it would have to be their choice, not because I convinced them. There are still too many choices out there to do so, and as their agent I have to work for them, not my immediate commission. There is a 1% chance they could wake up in the morning and be willing to listen to the seller’s proposal to fix the issues. But the overwhelming odds are that we will find a home with fewer issues.

As cute as this place was, I have never sold a home that had that many major issues that wasn’t sold as a rehab project or fixer upper at a steep discount. This was a first. But that’s baseball, and clients spend far too much money to compromise on these things. The buyer is out several hundred dollars, but that is the cost of doing business to avoid more expensive issues down the road.

Sellers: Before you list your home, get it inspected. Then this will never happen.

 

CommentaryFor Agents March 9, 2013

“Yours is the Hardest Business I Have Ever Seen.”

Weekends are busy in real estate, so you can imagine the feeling when my head sank into the couch pillow at 6:20pm when I remembered that I had to drive to New Rochelle meet with a client I promised to see. My client is a retiree, and straight shooter as well, and our conversations are always unpredictable. Tonight, she did not disappoint.

“Yours is the hardest business I have ever seen. I can’t believe it. I was in business for many years. I have never seen anything like it. It never ends. I used to think it was glamorous, to see homes and how other people furnished and such, but that is not so. You are so patient. It is good that you are good at what you do, because it is so hard.”

Thank you gift from a recent clientI was glad she noticed. Forget the hours, vagaries of commission based compensation, rejection and everything else that goes with being self employed. Advocacy is no walk in the park. You have to do the worrying for people. You have to think 5 steps down the road and plan for contingencies if your counterparts zig, zag, or something else. You have to think about clients while you shave. You never leave work at work. Driving home, as I recalled the conversation with my wife, she reminded me that it is like being a surgeon as well- we are always on call.

That is just on the part of the work that centers on client needs. The other aspects of running a brokerage, such as the marketing, administration, sales, management of people, risk, liability and time, can all be taxing. But for those of us in this industry, it is a vocation, a lifestyle, and almost an obsession. We live, eat breathe and sleep real estate. How do I relax? I end my day by reading and writing about the industry on my own platform and in social media. It is the height of irony to unwind from a long day in real estate by immersing myself in…more real estate. But I am not alone.

There is another part to running a brokerage that isn’t part of marketing, management or servicing clients. It is keeping up with the changes in the industry. The new shiny toy in 1996 was a cell phone. In 2001, it was a real estate website. Three years ago, licensees were encouraged to get involved in social media, and boy did we ever. In those and many “THE” things to do, we do it and often not well. My social media news stream is flooded with the insufferable amount of agents who use Facebook as a self promotion machine with waves of posts about their new listings, open houses, and humble-brags about what they did that day.

And when the shiny object stops being effective, they’ll say it is passe. Lately, some agents have questioned whether websites, blogs, or home searches on their sites are worth having anymore because of diminished returns. This make me laugh. In 1996 my cell phone was a game changer. But why should it be a game changer now, when everyone has one?

So here was my last update on Facebook, directed toward my colleagues who blame their websites for no longer being effective:

Friendly reminder: Real estate is a tough, competitive business. Therefore, the things you were encouraged to do back in 2005 and 2008, like get a website and blog, are no longer cutting edge. There is always a better mousetrap. The same goes for the Twitter/Facebook thing.
The new shiny objects are video and mobile. Mobile, by the way, is why ZTR and some smart brokers are getting your market share.

Caveat: In 2015, when a Youtube channel and mobile optimized search are no longer the flavor of the month, don’t say they don’t work. They do work. You just have to compliment them with the right new stuff. And you have to use them right, like not using Facebook to post about your open houses (see Todd Carpenter).

Anyone who has ever said or thought “There. I now have a <shiny object>. I am going to make money,” needs to understand that such sentiments are the preamble to an epitaph. Blogpost coming soon…

Our latest efforts are making sure that all of our online content and property searches are fully optimized for mobile. Who knows what it will be next week. But that is the job, and knowing what is next, just like taking nice photos or writing nice copy, is my business. Hard to do? Yes. But do I love it?

Again, yes.

BuyingCommentary March 7, 2013

On Hovercrafts

HovercraftI was fortunate enough to be quoted in Business week in an article entitled Why Redfin, Zillow, and Trulia Haven’t Killed Off Real Estate Brokers.  I spoke with the reporter for what seemed like a good healthy duration on where technology is taking our industry, the significance of its impact on the consumer experience and how licensees ply their trade, and the canard that access to information will somehow render real estate licensees redundant or irrelevant. After all that, here is the one quote that made the piece:

“We will never be a point-and-click industry…You will always need a trusted adviser to ensure that you get the best terms possible. The stakes are so high. If you want to do a do-it-yourself project, build a hovercraft.”

Now, I have said that 1000 times, but the other 999 times I have said or written it, I said “if you want a do-it-yourself project, build a go-cart.” The one time I say it with hovercraft, it makes the media. 

And my friends all picked up on the hovercraft thing. 

Hovercraft do exist. Not just the science fiction kind, but the ones you build at home from a kit. I used to see the ads for them in the back of Boys Life and comic books, and I think they require parts from a vacuum cleaner. I don’t know. I was more of a sea monkey kind of guy. 

But I have seldom felt so strongly about something as to the importance of having a trusted adviser in what is typically the largest transaction of one’s life. The median price for a home in Westchester is about $600,000. Assuming a 20% downpayment and a $480,000 mortgage at 4% interest, the total payments over the life of the loan are just over $825,000. But it doesn’t stop there. The taxes, conservatively in today’s dollars at $15,000 annually, would total another $450,000. The home insurance at $1200 annually would be another $36,000. Add in maintenance, improvements, a new roof and furnace along the way, updates, and you could spend another 6 figures easily over the life of the loan. Staggering. And I didn’t even add inflation or rising taxes. 

One might think I am a lousy broker for scaring off potential buyers with those numbers, but the truth is that you have to live somewhere, and that somewhere is never free. The numbers are uglier for renters, because you spend almost the same money over time, with no tax benefit (Call a CPA. I am not giving tax advice. This is a muse. Hovercraft, dammit), and at the end of the term you have no asset and  no equity. Living is expensive. But it beats the alternative. 

Regardless, you never undertake that kind of a project alone without some experienced advocacy to help guide you. Not all agents are created equal, and I have always stressed to consumers that they should choose their representation wisely. 

But do have representation. Jokes, hovercraft and sea monkeys aside, real estate should never be a do it yourself project. 

Uncategorized March 7, 2013

Latest Stats Out of Philly Main Line

As the data below indicate, all is well in Villanova, Pa. I don’t hold a real estate license there, but a chunk of my heart remains. Go Wildcats.
—————–
 
GEORGETOWN
 
VILLANOVA
 
Points 57 67
FG Made-Attempted 23-50 (.460) 16-34 (.471)
3P Made-Attempted 7-18 (.389) 5-10 (.500)
FT Made-Attempted 4-8 (.500) 30-42 (.714)
Fouls (Tech/Flagrant) 27 (0/0) 12 (0/0)
Largest Lead 7 12

Game Leaders

 
 

GTWN

 

VILL

Points O. Porter Jr. 17 J. Pinkston 20
Rebounds N. Lubick 9 M. Yarou 12
Assists N. Lubick 5 R. Arcidiacono 6
Steals N. Lubick 2 J. Pinkston 5
Team Stats: Georgetown | Villanova

(5) Georgetown 57

(23-5, 13-4 Big East)

Villanova 67

(19-12, 10-8 Big East)

 

1 2 T
#5 GTWN 29 28 57
VILL 33 34 67

Top Performers

Georgetown: O. Porter Jr. 17 Pts, 4 Reb, 5 Ast, 1 Stl, 1 Blk

Villanova: J. Pinkston 20 Pts, 4 Reb, 5 Stl

Market Statistics February 28, 2013

January 2013 Westchester Real Estate Market Shows Health

Forget the fact that I’m busy. Forget the fact that we are seeing multiple offers far more frequently. Never mind that we have more buyers looking, more sales pending, and more offers being made. Ignore the 5 new construction listings the company now carries, which is an all-time high. Those are all anecdotal examples of the market stabilizing. The real good news lies in the statistical data: more homes are selling for more money than they were a year ago, and not by a little. According to the Hudson Gateway Multiple Listing Service data for single family homes, January 2013 was far healthier than January 2012.

How much better? I’m glad you asked.

For the first month of 2013, 256 single family homes closed, up from 219 a year ago. That is an improvement of  17%.
Median price for those homes sold in 2013 was $522,500, up from $485,000 in January 2012. That is a 7.7% rise in median price.

There are still too many distressed homes, upside down mortgages, short sales and shadow inventory to be dancing in the streets.

But there is no longer any blood in the streets.

Amen.

#Precovery

Company NewsIndustry News January 30, 2013

Jenn Maher Joins J. Philip Real Estate

Jenn MaherIt is with great joy that we announce the addition of Jennifer Maher to the J. Philip Real Estate family. Jenn is among the most respected and admired names in the Westchester and Putnam real estate community. She is a current Vice president of the Hudson Gateway Association of REALTORS,  Chairperson of the Putnam Chamber of Commerce, has run her own firm, and, by the way, sells a ton of property. Perhaps most impressive to me is the loyalty of her clientele; it seems that many of the deals she works on involve someone she has served in the past. That speaks volumes.

I met Jenn six years ago when we collaborated on a deal that actually never closed- the challenges on both sides of the transaction were considerable, but I had my first experience with the aplomb with which she handled obstacles. We have remained friends ever since. It is easy to do that when the other person is so engaged with association involvement, gets the power of social media the way Jenn does, and always participates (and sometimes organizes) in educational events to help stay ahead of the curve. Her energy, involvement and hyperactivity have always struck a chord with me.

Outside of the industry, Jenn is as much a Renaissance Woman as she is in uniform. A native New Yorker, she’s a supermom, dog lover, hugely active in philanthropy and community, and terrific writer. While I kid her for never taking a bad picture, Jenn is incredibly cerebral and profound; the lens she sees the world through has always spoken to her great intelligence and grasp of the Big Picture.

Jenn’s role will be that of Associate Broker and Director of Development. She will run the commercial division, fortify our presence in Putnam County, and spearhead the growing of the team. Her joining us signifies to me that this is a special place; we are not another independent or boutique. We are building something special here, and will not just be a place where people hang their license. This enterprise should be an example of where real estate should be for consumer experience and as a place to practice the profession at it’s highest level.  This firm will be built with powerful women. That is my intention, and why I am incredibly honored that she chose this firm as her home.

 

Jennifer MaherRarely do great beauty and great virtue dwell together.
Petrarch, De Remedies

 

 

Commentary January 12, 2013

I Am No Middle Man

 

A recent client's very apros pos token of gratitude.

A recent client’s very apros pos token of gratitude.

AGBeat has an interesting article on how technology has eliminated many “middle men” from their respective industries, but that real estate brokerage has not been among the victims. It is a well done piece, and I agree that technology will never replace agents for many reasons. However, I do take issue with one thing: The term “middle man” does not apply to me. I am no middle man.

“Middle man” implies an intermediary that stands between the consumer and the good or service who adds their fee without bringing lots of value. That isn’t me, and it isn’t any one of my agents. And that goes for the vast majority of my industry.

Real estate is not a point and click transaction. The proliferation of data and access on the Internet may have destroyed travel and brick and mortar book sellers among others, but those exchanges last a few minutes and end with entering a credit card number. However, real estate transactions begin weeks and months before the deposit. They also do not conclude until 60 to 180 days later (as in the case of short sales) at the closing. There is no similarity to any other piece of commerce.

Often, I will not conclude a transaction with a client until 6 months or a year after my first contact with them.

In the case of a seller, I have given them exhaustive research for pricing, the key to my Rolodex for resources in lawyers, title, contractors, stagers, inspectors, and other trades, and many man hours of time and advice. I have been the general contractor overseeing renovations on property to complete repairs, bring homes into compliance, and getting the home ready and presentable for sale before it saw 1 day on the market. I did it all for free, because I don’t get paid unless and until that home closes. And yes, there have been rare cases where I did all that, the people didn’t take my pricing advice, expired unsold, didn’t renew with me, and then listed with another broker at the price I recommended, selling in short order.  Even if I sell a home in a week, I can guarantee that the work started long before that, in some cases years. Middle men don’t do that.

I have communicated with buyers for months before they were ready to actually look for homes. I have helped them repair their credit. I almost always help them with mortgage resources who have gotten them the very best home loan terms available on the market because, after 16 years in this business, my contacts would make the King of Siam envious. I have put walk through videos on Dropbox for out of state prospects so they’ll know if they should fly in or not. And yes, there have been buyers who have ridden in my car for months, seen dozens of homes with me, and not closed either because they had a change in life circumstance or bought through another broker in different conditions. My pay in those cases was always the same: Zero. That  isn’t a complaint. It is also something middle men don’t do.

And when the right place for my clients is found, the work really starts. I have advocated, sleuthed, investigated,  negotiated, and worked on behalf of my clients for months from accepted offer to close to ensure that the mine field of home inspection, title, contact, mortgage, appraisal and hundreds of other things concluded to their best interests. Middle men don’t do that.

With over 340 sets of clients in transactions valued at over  $140 million, I have remained available for free, as a resource, trouble shooter, and friend. Middle men don’t do that.

Oh. And I have a skill set that only comes with that experience. I look millionaires in the eye the same way I do with regular Joes. I have exercised the patience of Job with other agents in many circumstances, many of whom tough counterparts for a variety of reasons. I have gone toe to toe with lenders loss mitigation departments at huge banks in short sales. I have matched wits with attorneys who think that their JD, and not the facts, put them higher on the food chain than I am. 

All too often the outside eyes looking in judge a broker by the amount of labor they do to the naked eye. There are few metrics for knowledge, communication and a thousand other skills that are not rooted in “doing” but “being.” That goes for many things, including calls, emails and texts late at night.

I am a trusted adviser in what is typically the largest transaction of one’s life as an advocate, fiduciary, sounding board and friend. I am no middle man.

Market Statistics January 7, 2013

2012 Westchester Real Estate Market Wrap Up: Strong Finish.

New Construction for $674,914. New Starts are another positive sign.

More homes sold because prices same down.

That would be one clear message in looking at the December sales figures for single family homes on the Hudson Gateway Multiple Listing Service in Westchester County. Transaction totals were their highest in six years with no special stimulus and buyer appear to be returning to the market in stronger numbers. Overall, 2012 was considerably busier than the prior year, and again posted the highest closing tally since 2007. There is reason for optimism looking forward to 2013.

The totals are as follows:

In December, 2012, 376 single family homes closed at a median price of $557,250.
In December, 2011, 278 single family homes closed at a median price of $542,900.

That is a gigantic 35% leap in transactions, and a modest 2.6% rise in median price for the month.

For the overall year of 2012, the totals were 4476 homes closed at a median price of $587,000.
For the year 2011, 3,842 single family homes closed at a median price of $600,000.

That is  a 16.5% increase in closed sales and a 2.2% drop in median price for the year.

Median price is still down six figures from the peaks we saw in 2005 and 2006, and it could be a decade or more before we return to those values. However, that, along with the low rates and pent up demand of a stagnant market for over 5 years, is probably the very reason why more buyers performed in 2012 than so many years prior. With values at this level tens of thousands of homes in the county probably remain underwater. We are, therefore, a long way away from anything resembling a robust seller’s market. The numbers do point to the infancy of a recovery, or a “precovery” as I have written before.

Looking forward in the first quarter of 2013, we seem to be hitting the ground running. Inventory numbers show 2,469 active listings for sale at a median list price of $639,000. Of greater import is that  785 homes are under contract for purchase at a median list price of $585,000. While there is no doubt that the consumers are trending toward lower cost homes when given the choice (and who can blame them for being more cautious?), that is a strong number of pending deals at this point in the year a week removed from the holiday season (or a day, if you count Epiphany).  What we are seeing is the market striking a balance between a decent number of choices for buyers but not enough to give them the leverage they possessed in weaker prior years.

If 2013 continues the pace I will talk of the R(ecovery) word. Until then, I’ll remain cautiously optimistic. The overall economic status is fragile, and as long as the government does not do anything stupid like repeal the mortgage interest deduction or end the debt relief act for short sales, we can go from crawling to walking again.

 

Company News December 31, 2012

State of J. Philip Real Estate 2012 Edition

With 2013 mere hours away I am pleased to close the books on another successful year that saw the company weather the challenges of the changing market and continue on the path of encouraging growth. We eclipsed some goals set in last year’s end of year report, fell short in others, and are set up for a strong new year. At the risk of sounding brazenly self aggrandizing, there is an awful lost of positive to note as we build the brand.

Out of about 900 member brokerage firms in the Hudson Gateway MLS, our company was ranked 53rd in closed transactions, putting us strongly in the top 6% of brokerages for that metric. Last year I was about  two thirds of the company production and my goal was to be less than half in 2012. I reached that goal. For the first time since founding the firm in 2005, I was not the majority of company dollar volume. I still closed well over 30 transactions, but the team’s continued growth and improvement eclipsed my own production for the first time. This was important to me. In building an enterprise, it is crucial that the company, and not just one person, has strong production. My goal in 2013 will be along the same lines: I am committed our rankings improving, and I want to be one third or less of the production personally.

Our team has indeed grown and reached some rewarding benchmarks. First, we have expanded to 34 agents and associate brokers. The growth of the team included the addition of our first ever Vice President, Angela Johnson, who joined us in July to assist in implementing systems to better run the organization and spearhead the hiring and development of new associates. I remain at my teams’ disposal 100% as well. I have the greatest respect for Angela and greatly value her contributions thus far.

2012 also saw the revamping of the company website and my personal blog. The new jphilip.com unveiled in March has averaged about 20,000 page views per month and made a huge impact on developing new clients and customers for the team. My own self hosted blog was also rebooted in March, and the feedback has been rewarding. It remains one of the firms’  best assets. Our web presence has always set us apart, and that will continue with the upgrades.

In July, the firm was awarded membership into Westchester Real Estate, Inc., the area’s most prestigious and highly regarded consortium of independently owned brokerages. This is an achievement that I am incredibly proud of.

I was also among 20 agents selected nationwide to be part of  Zillow’s  Agent Advisory Board. We had our first meeting in September, and I believe that the group is making a difference. It is an incredible team of industry leaders, and I am also impressed with Zillow managements’ desire to do right by their premier agents.

2013 will begin my 4th term as Vice President of the Hudson Gateway Multiple Listing Service. The New York Association of Realtors has appointed me as the 2013 vice chair for the bi-annual Technology Forum, and I remain a state director on the MLS and Technology committees.

The year was not without setbacks. Not every goal was reached. Deals fell through. New hires didn’t work out. But overall I remain humbled at the incredible men and women who have chosen my firm to their professional home, and I will make sure that in 2013 we exceed their expectations. This much is for sure: as I look over the results of the soon to be closed 4th quarter, it is clear that the first quarter of 2013 is set up to be extremely productive. We will absolutely hit the ground on January 1 running, and I have over 30 incredible people to thank for that.

The takeaway for the consumer is clear to me: companies grow and contract for a reason, and we remain committed to learning, development,  being our best, and getting the best results for our clientele. That is why we grow.

Commentary December 31, 2012

Why the Journal News was Wrong About Publishing Gun Owner Information

In the aftermath of the Journal News’ recent publication of the identity of every handgun license in two counties, their claim that it would be good for starting a dialog on gun ownership is proving to be very wrong. There is discussion, not about guns, but about privacy and what constitutes responsible use of public information. On a personal level, I feel far more vulnerable as a non-gun owner than I did a week ago. It is now easier to find me and target my home and family.

The defense the Journal News offers hinges on the fact that the data was public. But what the editors do not distinguish is the difference between making information available and crossing the line and aggregating that information. The JN is not an almanac. They did not report news. They made it.

Here’s why.

I am a real estate broker. I am also a member of the Multiple Listing Service and have access to that database. The MLS has records of every home in 5 counties via a direct link to public records. Just by knowing your name or address, I can typically tell you what you paid for your home, what mortgages have been recorded on it, and if there are other liens or judgements on the property. It is all in public records, but the non licensed person would only have access to that information by going to the county clerk or paying a website for access, which can be pricey.

If I were to exploit my access to this information and publish on my blog, for example, everyone in Westchester with a mechanics lien or mortgage default, the backlash would be justifiably significant. My job is to use that information to serve clients, not enrich myself by distributing it. Information can be abused. Access does not make it right to aggregate.

I’ll repeat that: access to public data does not make it right to aggregate and mass distribute that information.

In a society where property records and property ownership are transparent, that access to public records is a public good. However, that doesn’t mean that access gives me or anyone else the right to distribute that information to anyone who would not otherwise seek it through the regular channels. All that does is feed the least common denominator who neither went to the clerk’s office nor paid a reputable source for it. The same goes for gun records.

The cynical side of me makes me wonder if this was all just a ploy to be relevant. I haven’t subscribed to the Journal News in years and stopped frequenting their website when they introduced the paywall. Now the publication is discussed coast to coast. Unfortunately, the discussion is not about gun ownership. It is about the paper’s decision to distribute the data.

In an era where we all hope and pray that the 26 lost souls in Newtown did not die in vain, that is a very sad thing indeed. In light of their promise to publish the data on Putnam County, we should also remind them that their job is to report news, not be the news.

Just one last thing: I may not be in the database of handgun licensees (for now), but we do have a 95 pound German Shepherd.