In my travels, I have run across a number of home sellers who price their home based on sentiment. Market activity, comparable sales and competing listings don’t influence their price as much as “their number.”

“Their number” is not justified by empirical fact, market data, or realism, and they believe that their buyer will be that one special person who loves the place the way they do. The challenge is that their bias is borne of years-sometimes decades- of living in the home, and buyers come in cold. One such client a few years ago were the original owners, so they always lived in what was a newer kitchen to their sensibilities. The only problem was that 23 years later, it wasn’t a new kitchen anymore. 

Still, they hold out a belief that they’ll catch lightning in a bottle. Someone will come along who is that one special buyer and pay a premium for their home. 

The problem is, this person doesn’t exist most of the time, and when they do, their lender won’t agree to the price either. 

That one special buyer is not a business plan. It isn’t a marketing strategy. It is hope packaged in a dream. Depending on that one special buyer to buy rather than having a sensible marketing plan that takes the reality on the ground into consideration is like having your retirement plan be a winning lottery ticket. It depends on odds-defying luck, and that is no way to do business. 

For some people, it is hard to admit to bias or to divorce themselves from sentiment. But bias and sentiment are personal; they aren’t business. This is as price-sensitive a market as we have seen since the depression. Westchester County buyers are self interested and skeptical, and typically avoid listings that don’t appear to have a motivated seller. They are also savvy and well informed. Moreover, sellers today are competing with foreclosures and short sales, which suppresses prices and offers a huge inventory to choose from.

A smart marketing plan can’t rely on chance, nor can it hope for unlikely events. A smart marketing plan is based on facts and real events, and the sooner a biased seller understands this the sooner they can start packing. Smart marketing is objective. Catching lightning in a bottle is great for finding a spouse, but in real estate it is a slow death. 

I got a call from a producer at CBS this afternoon asking if I had a client willing to go on the national news broadcast this evening and speak about the proposed QRM rules for home loans. I did. Evidently, the producer found my Active Rain profile in a Google search. Not bad.  

The piece ran on the CBS Evening News (the national broadcast) with Scott Pelley, and I embedded it below. The cool thing about it is that Michael was the company’s first closing back in December of 2005! I sold him and Robb their first home and we recently closed on their second- both homes were shown on the report! They were also featured in a NY Post story on real estate right after they closed on their new house. 

Michael is a good man- he is active in the community and started the Peekskill Dog Park not long after moving up from Manhattan. While I disagree with the editorial slant of the report (I believe QRM is a bad idea and overkill), I think Michael did a great job in the brief time he was on the air.

I can’t promise to make all of my clients TV personalities, but I do aspire to treat them all like stars. I love my agents, and I love past clients! 

This is a “driveway.” I call it a “lawn.”

The “garage.” I call it a “shed under a deck” or “a garage for a lawnmower.”

This is a “3-year-old furnace.” I call it a “furnace the agent never saw and took the owners word that the new reconditioned gizmo= new furnace.”

This is a Christmas creche that was in someone’s dining room in mid June. Must be the new thing. 

No comment is needed.

And this is clearly the best maintained commode with an open floor plan I have ever seen. It truly sparkles. And privacy is overrated.  

And every one of these pictures is from the past 7 days. 

I just got off the phone with the listing agent of a home I showed a buyer client this past weekend.

Wow. I feel like I got mugged. 

After the initial salutations and memory jogging of who the agent was and the address of the property in question, she went into this rapid fire, question-answer-rebuttal exchange with me where I was rendered speechless, a rarity for me. Apparently, no objection as to why the house does not feel like home for my buyer stopped her from batting back answers like a 1975 encyclopedia salesman. 

My client needs a yard for her dog, and the house was on a hill with a huge deck out back and almost no lawn. “He’ll take the deck down. He’ll plant a lawn.”

The kitchen needs updating for my buyer’s taste. “He’s a contractor, he’ll put in a new kitchen at his cost.” 

OH-Kay…..

Overall, it is just too much work for her… “He’s willing to update whatever she wants. Is this her price range?”

Of course it’s her price range, she – “Because I have one for <lots more$$>”

Well, that’s a little beyond what she wanted to- “She can make an offer, everything is negotiable.” 

Well come on. How desperate is this person to make a sale? Aside from making me bizzarely uncomfortable, she also throws the more expensive seller she represents under a bus! 

Feedback should not be a debate or a de-briefing. I have said before that the whole concept is overrated. Occasionally the showing agent will have a helpful insight, but not too often. The best feedback is an offer. If there is no offer coming, no snappy rhetorical comeback from an agent will make a house feel like a home. 

I hope all you dads out there had a great Father’s Day. Mine was, by design, uneventful, spending the morning watching Star Wars on the iPad with Luke and Catherine draped on me, then pretty much being a couch potato the rest of the day. Ann gave me a hall pass from lifting a finger, and I am grateful for it. I certainly reflect on my own father on days like today, and I wrote a fair amount about Joe Faranda last year at this time. This picture is from about 1968 or 1969. I believe it was taken at my uncle’s house in Brewster. We may look serious in it, but my older brother Tom has a photo taken moments later when we are both laughing. If I can scan it I’ll add it. 

You have to love those horn rimmed glasses. My father almost looks like he belongs on a Far Side cartoon.

We lost Dad in 1993 when I was only 25. I still miss him, and I often ask myself what he’d do when confronted by a difficult choice.

I hope my children think the same of me.  

I’ll be happy to show you the listing. 

I have seen some REALLY incredible kitchens in my time. 

Some of them were in foreclosed homes. The poor slob who spent $20,000-$30,000 on an amazing kitchen simply primed the pump for the next guy. Sad. 

And this leads me to the question: how many people who are pondering a new, renovated kitchen have a college fund for their kids? Or a fully funded IRA? Or 3 months of salary put away for a rainy day? Some do, but I’ll bet most don’t. As a matter of fact, I know that many people actually borrow more to redo their kitchens and baths. 

From a completely pragmatic, utilitarian point of view this is madness. We have a society that has been hypnotized by cable TV shows to believe that if we don’t have ceramic tiles and stainless steel we are less than. I’ll fill you in on a little secret: Ann’s lasagna tastes just as good prepared on formica as it does on granite. And when I flush the toilet or turn on the shower in my 1962 bathrooms, which looks like period pieces by the way, the desired outcome occurs as if they were 2011 bathrooms. 

Why do we need new everything when “new” is 98% aesthetics? I understand water savings and safe electric, but that should cost hundreds, not tens of thousands. Are we that insecure as a society that if the cabinets are not the latest cherrywood or if the floor is laminate instead of ceramic that we are missing something? 

When Ann and I bought our home it was from an estate and it was incredibly preserved. I told her that she’d want the baths and especially the kitchen updated eventually, but she said that her primary criteria for a counter was “flat.” With 4 kids to feed, clothe and educate and a business to run, we have other priorities. We’ll get a new kitchen someday, but it isn’t on the short list right now. What is on the short list are the kids and the company. 

I truly believe that if more people thought this way the country would be in far better shape. I’m not judging others, and Lord knows I love a nice kitchen as much as anyone, but what I really love is money in the bank, savings in the college fund and liquidity in the company operating account. I sleep better at night, because stainless steel appliances don’t mow the lawn or help with the bills.

Am I crazy? 

Excuse me while I delve a moment. Under politics is the land….

I do not live in Anthony Weiner’s congressional district, but as a New Yorker and a business owner I have a say in matters regarding my state’s delegation to Washington. And like the majority of Empire State folk (except, regrettably, the majority of voters in his own district), I wish Anthony Weiner would resign. My state’s government in Albany is on the cusp of legalizing gay marriage, an important step forward in liberty that will put New York ahead of the national curve for a change, and we don’t need the political distraction. But the real reasons lay with Mr Weiner himself. 

I’m no lawyer, but I know wrongdoing when I see it.  When he reversed his strategy and admitted his lies, the congressman stated that his tweet to the student in Bellingham, Washington was not his only dalliance. Vehement, arrogant denials aren’t something you can back away from in one press conference, no matter how many times your voice breaks. Contrasting Weiner’s week of repudiation with real events gives us a look into more disturbing matters about what we can and cannot have in a lawmakers.

He didn’t just deny, he fabricated.  When president Clinton disavowed his, um, inappropriate relationship with Monica Lewinsky he didn’t make up some ruse about someone else in the White House enjoying M. Lewinsky’s services. He just tried awkwardly to parse words about what sex really was. Weiner made up a lame story which only raised more questions, some of which were no laughing matter for a member of the US Congress. 

He witness tampered. Among Weiner’s pursuits was adult actress Ginger Lee. Ms. Lee has reported that Weiner wanted her to lie about his sext messages to her. To her credit, she came forward anyway. And as Jennie Ketcham recently wrote, Weiner’s conduct with Ms. Lee wasn’t mischievous fun, it was disrespectful harassment. For those of us who think this is just about America’s needing to get over it about sex, manipulating or coercing a possible witness isn’t boys being boys, it is corrupt.  

He called in a false alarm. In his televised interviews with reporters in the immediate aftermath, the congressman’s denial’s took a strange tone when he distanced himself from using the word “hacked.” He had good reason, but the horse was already out of the barn. Hackers are now targeting government and financial financial institutions. A US representative’s online accounts being compromised are serious issues that could have repercussions on national security as well as damaging information to his own party’s legislative agenda. So Weiner instead tried to use the terms “pranked” and “hoaxed” because, in his damage control after he deleted the tweet, he forgot that a US congressman can’t just brush off a Internet account being hacked. Having to do damage control on his damage control is too much even for a fast thinking guy like Weiner. 

The question to whether he utilized government resources in his hobby is probably answered in the affirmative, but I would really prefer not to use government resources to confirm that. We’ve spent far too long with this thing hanging in the air, and it is clear that he can’t effectively govern. But I’ll add another piece of coal to the fire anyway. For a technophile like Anthony Weiner, waiting for his wife to come home is about as specious an excuse to discuss resignation as you can get. He is simply strategizing- gambling that this might die down by the time Huma returns stateside. Surely the congressman has heard of Skype, texting, email, telephone, and other media that allow for private communication. If his wife follows him there, he could privately message her on Twitter. But I don’t blame him for avoiding that one. Maybe Skype. 

When New York representatives Chris Lee and Vito Fossella were both exposed, they went quickly and quietly. Anthony Weiner should do the same. 

Update: At 10 am this morning, 2 hours after I posted this, the media reported that the congressman would indeed step down. #CalledIt!

Last week, I published a market report for Ossining which had the median price of a single family home in Ossining schools at $382,000. While Westchester is one of the more expensive counties in our state, Ossining is actually one of the more affordable places to buy from a price point of view. 

Today, Coldwell Banker has published a Home Listing Report which surveys 164 New York housing markets and has ranked Ossining (!) as the most expensive market in our state with an average price of almost $920,000. Being a native of Ossining and with an office in town, I was intrigued as to how they came to that conclusion, so I dug a little deeper.

There were quite a few characteristics of the data to consider to put the numbers in context: 

• The span of time measured was listings taken was from September, 2010 to March 2011.
• The only property type surveyed was 4 bedroom, 2 bath single family homes. 
• The only homes surveyed were homes listed with Coldwell Banker themselves.
• The prices measured were asking prices, not sale prices. 

There is a real estate axiom I was reminded of recently by Bill Lublin that goes like this: every piece of privately owned property in the country is for sale. It might not be listed, but it’s for sale. If you knock on the owner’s door and offer them market value plus enough of a premium, you get the keys. It could be a dollar, it could be $4 million. But if you offer someone enough money, they’ll sell. 

There is a corollary to this, which is, of course, that everyone is a buyer if they can get a good enough deal. I am not currently looking for a beachfront property or a condo in Manhattan, but if you deed one over to me for my pool table and $500, I’ll sign today. 

There are two kinds of buyers in any market. Those that are looking, and those that aren’t. Those buyers who are looking are probably willing to pay market value. Those that aren’t looking, well… do I have to tell you?

If you have an acquaintance who expresses interest in your home over golf or cocktails, you should ask yourself first why they are just finding out about it at golf or happy hour. Strange, no? Because someone who is looking would know you are for sale if they have a pulse (especially if you are listed with me). What does this tell us? Your friend will buy your place. And he’ll clean your clock. Because the only reason he’ll close is if he can get a steal. 

If you have a buyer for your property the real work begins in many ways. It isn’t all downhill after a meeting of the minds necessarily, because many of these accidental buyers are among the most difficult I have ever dealt with.

• They could not be as qualified as they think they are, because they haven’t bothered to speak to a lender yet. 
• They might not be very cooperative, because they think they are doing you a favor. This can create havoc in a transaction, because unresponsive or entitled buyers frankly suck. 
• You could ruin your friendship. Ever do business with a friend? 

It is no exaggeration that getting transactions to close is far more work in this climate than it was 5 years ago. The most onerous pitfalls in my experience are related to title and compliance issues on the property. Old school agents often gloss over illegal bathrooms and decks, but title companies and lenders do not. The following is a list of terms that could be red flags for a problem in getting a home closed. 

1. In-Law and Mother-Daughter apartments. In Westchester County, a home is either a legal single family or a legal two family. They have to be sold as one or the other. If someone makes a kitchenette basement apartment for their elderly relative it might not be a big deal to the neighbors or the code enforcers, but when it is time to sell the home has to be brought into compliance, which means making a de-facto two family a single family again. It has gotten to the point where our MLS will not allow in law or mother daughter to be used in the marketing information unless the home is a legal two family. 
2. Grandfathered, or predates zoning. This is one of those illegal addition/improvement get out of jail free cards that actually exists but is very, very rare. The only time I have seen it is in a very old home that has been in the same ownership for several decades and never had work done that required permits after zoning laws took effect in the 1960s and 1970s. Even if those conditions exist, the best thing to do is verify everything at the building department to ensure a “predates zoning letter” is on file. 
3. “Buyer agent to verify.” The public seldom sees this phrase, but it is still popular in some parts of New York in the agent remarks section of the MLS. It translates to “I don’t want to be responsible for the square footage, taxes or other piece of quantitative data.” We don’t permit it for the property taxes in the Empire Access MLS, as the taxes must reflect the true tax figure without STAR or other exemptions, but some out of area agents still use it sometimes. No inaccurate data in a listing gets a mulligan, and listing agents must make all reasonable efforts to ensure their data is accurate. 
4. Slam dunk, sure thing and other superlatives. This one has to do with a buyer’s ability to get a mortgage. Unless they have been through underwriting, it is irresponsible to characterize any borrower this way in the current market. It is often famous last words. 

There are others, and this is by no means an attempt at a glossary of misleading agent terms. These descriptions are often offered by well meaning people who haven’t yet gotten the extent of thoroughness that is required these days, but they learn fast.  

We see quite a bit of weird stuff in this business, which isn’t surprising when you mix home, large sums of money and the inevitable stress. It sometimes brings out a side of people that is unfamiliar, even to them. I have often said that you’ll see the best and worst of people  in what I do, and often it can be the same person on different days. 

It should be no suprise then, that certain people choose what we in New York call an “angle.” One of the occasional calculated moves I see is buyers who think that sellers who are represented by a broker would be better approached directly, either marginalizing or eliminating the broker altogether. It doesn’t work, but they try it anyway, and all it does is put everyone on a treadmill.  

The scenario typically plays out like this: I get a call or email from a seller client. 

Phil:

Our friend/neighbor saw that we are for sale and is very interested. We told him to call you. He said he’s been calling the number on the sign all week but hasn’t gotten a return call. Can you please call him? We really want to sell. 

-Client

Now, the odds of me not returning a direct call on one of my listings are as high as me seeing several thousand dollars in cash on the sidewalk and not leaning over and picking it up. We have two administrative people full time, one of whom is my wife and co-owner, and everything is followed up on-thoroughly. But the guy doesn’t know that. The most he probably did was call my office at 10pm, get voicemail, and hang up without leaving a message. 

After a few rounds of this, the seller gets frustrated. They may have even shown the person through the home themselves (highly inadvisable, especially if they don’t know the neighbor). I can hear it in their voice. I finally, often with great effort, get the “friend’s” phone number and discuss the home. They often want no part of me or are uncooperative. I’m not part of their plan. In most cases, the seller discovers that it was all a big waste of time.

This happens upon occasion, and the takeaway for seller clients is that if a prospect contacts you directly the best thing to do is get their number and pass it to your agent as soon as possible. If we can’t reach them, they were probably more interested in being a lone wolf than being the owner of your property. 

I’ve never taken a staging class. I know little about staging and think it best left to the stagers by and large. But there are a few basics that it doesn’t take a rocket scientist to figure out. 

You tidy up. 
You shouldn’t leave dirty dishes in the sink. 
The dog that loves to bark or just, um, loves, should be crated or taken in the car. 

And you don’t leave your bills out opened on the kitchen table or your dresser. Because then I’ll see them. And anything I see can and will be used against you in negotiations. And we won’t even tell you.

I have seen collection notices, overdue notices, divorce/bankruptcy paperwork and other intensely personal matters of private business stuck to refrigerators with magnets, tacked to a cork board next to a phone, on a desk, on a kitchen table or counter, and plenty of other very visible places open for all to see. 

When that happens, a good buyer agent will use the compromising information to eat your lunch in negotiations. You won’t even know what hit you or why the other side is playing hardball so zealously. The only thing you’ll know is that they’ve got you. And it will cost you. 

Prospective clients (and occasionally, colleagues) often ask how, if I am in Briarcliff Manor, I will be able to sell their home in <not Briarcliff>. We sometimes aren’t even in Westchester, but in Rockland or Dutchess. 

While I like to keep the tone of my blog more on the informative side, I have to admit that the most common question I am asked has an answer that is going to sound brazenly self promotional. 

And you know what? I am OK with that. 

When I started the firm in 2005, selling 20 homes in my own zip code seemed like it could take forever. BUT…selling one home in 20 zip codes? We did that our first year. And since 2006, I have been ranked in the top 10 out of over 7000 agents for total homes closed, despite having a new firm and a crummy market. And I did it because I grasped how buyers buy in the 21st Century. 

How-and why- people buy real estate today vastly differs in many ways from when I began in 1996. 

• Main Street is the Information Highway. In 1996, if a person wanted to buy real estate, they had to walk into a real estate office or cruise the supermarket magazines. Today, everyone I work with looks online for the immediate feedback it provides- granular searches, photos, layouts, instant answers galore. A guy in Korea can search homes on my website the same as someone in Manhattan or Briarcliff. We made our online marketing a priority from day 1, and the results show it. 
• Neighborhood experts have limited value if they don’t master technology…and a few other things. If you think that a buyer, who more than likely has an agent with the very same information, cares that your listing agent knows all the diner gossip, when the farmer’s market is, or the name of everyone on the PTA, you are sadly mistaken. It’s all online already anyway. If your agent isn’t thinking about you when they are in the shower, answering emails at 10pm, or returning phone calls promptly, your sale prospects suffer. That can get expensive. We have built a strong, streamlined organization that flat out hustles. 
• Buyers care about their needs, not who the listing agent is. Does this need explaining? And this has been consistent since long before 1996. Buyers care about one thing: if a house they see meets their needs. 
• The Boycott is BS. I see a huge irony in a Wall Street executive or a Westchester physician suddenly reverting to a nervous person worrying aloud that if they list with an “outsider” that the local firms won’t show the listing. Nonsense, and agents who suggest such a thing (“I would never boycott, but some agents…”) in desperation to secure a listing are compensating for unflattering issues. If a buyer tells an agent in this economy that they are interested in a house, that agent will work for their commission. If a buyer likes a house, they’ll check it out on Google Earth, Zillow, and plenty of other online venues and verify any derogatory information an agent passes to them. And if that agent lied or exaggerated, they lost their client and commission. Buyers are too smart for that. 
• Niches matter. I have listed and sold millions (and MILLIONS) worth of real estate in areas where the client has told me flat out that if they didn’t have a specialized need, that they would have worked with someone more local. But I filled the need. We serve international markets (we have agents that are fluent in probably 10 tongues), urban dwellers from Manhattan, where I have another office, and a slew of other unique needs and market niches. 

There have been several thought provoking articles written recently on open houses and why some agents really do them. The point that agents would offer to hold a listing open while surreptitiously using them to just prospect for buyer clients is actually a rather old modus operandi; however, my experience has been different.

I have run into sellers who complained to me that they found out that their last agent was using their home as “buyer bait” to be sure, but more often than not their complaint was that their last agent did NOT hold their house open. In my neck of the woods, many sellers still believe that open houses are effective marketing. I disagree. Open houses for me have been by and large a chance to catch up on emails and wish I was home with my kids. 

While they are very effective in markets like Manhattan, I view open houses in Westchester as a relic of a bygone era. Years ago, there were no published photos of homes for sale. The only way for a consumer to see the interior was to walk through. Today, with 30 photos on our local MLS, virtual tours, Youtube and other media, they are virtually obsolete. 

Think about it. We as listing agents promise that only pre-approved buyers will come look at the listing. Then, for 2 hours on a weekend afternoon, we allow anyone who can walk on their hind legs and sign what we hope is their real name to walk through. It’s inconsistent. And in my experience, it is ineffective. The chance that a person is not a nozy neighbor and truly qualified for a house is low. We’re just swinging blindly. And that’s no way to do business. 

I do, upon occasion, hold a listing open. But I prefer that it be under the umbrella of a proactive marketing plan as opposed to a reactive plan. In a reactive markeing plan (which is about 95% of the market), a seller in my area would call the listing agent and demand an open house because nothing is happening. The listing agent, guilty that there are no offers and eager to please, holds the open house. The plan? They hope someone walks in and they get lucky. In cases  like this, a seller will only agree to reduce their price after an open house- if it doesn’t sell. That’s no way to do business. 

In a proactive marketing plan, an open house isn’t held to pacify a nervous seller. It is done to attract lurkers, which is to say silent consumers who watch homes online but seldom inquire, to come and look without having to make an appointment or engage an agent that they may not want to commit to using. In proactive marketing, an open house is not only heavily publicized and well planned, it will be used to announce a price improvement and add some sizzle to the steak. In proactive marketing, you aren’t pacifying a nervous seller. And even then, you might not (and probably won’t) sell it, but you can own the outcome. 

By far, the Internet has changed the game of how real estate is sold. In Westchester, open houses are, in my view, mostly relics that some sellers cling to as a means of doing something because a property has not sold. In some of those cases, an open may indicate a reactive marketing plan. As for picking up buyers? I’d rather pick up my daughter. 

I am posting this in response to a blog that suggests that the NAR misrepresented the truth when they lobbied against QRM initiatives. No apologist for the NAR am I, but I disagree that the NAR was wrong here. I am re-posting a PDF of the email the NAR sent all brokers in support of their view in a May 18 call to action to lobby lawmakers to protect lower downpayent mortgage programs. 

It is a little long, but I believe in transparency. This is too important to assert opinions without the facts. I do not believe the representations made in this email are fraudulent in the least, and I further believe that government fixes of the housing industry thus far have been by and large awful, with the exception of the expansion of FHA, which has saved the bacon of many, including Yours Truly. 

The PDF of the email can be seen here. 

Ossining/Croton on Hudson Patch just started here June 1 and I have been asked to contribute to the blogs. I was happy to oblige. I am gratified that two of the top 5 posts are my own contributions and I hope to continue the trend. 

Ossining and Croton are two communities that are near and dear to my heart. Having grown up in Ossining, I spent a ton of my youth in Croton, between friends, scouts, and church youth group. Just this morning I had breakfast with a client at the famed Croton Colonial diner, a haunt I (and thousand of others) have known since high school. 

Both communities are rivertowns, right on the beautiful Hudson, and as such they have some common traits- they are popular MTA Hudson Line commuting points, they have tons of charming pre-war homes, and both communities are tight knit, civic -minded and proud. 

If I have one weakness in my blogging focus it is the hyperlocal. I indulge in lots of commentary on real estate, my experiences and insights, but I could do a better job of selling my area. I hope that with this new project that it will be the impetus for expanding my repertoire. 

If you are unfamiliar with Patch, it is an AOL-owned local online community, and it solicits the opinions and voices of the local. I think of it as like the evolution of the old community newspaper retrofitted for the online platform. If you have it in your area, check it out.