The September edition of Real Estate In Depth, the official publication of the Westchester Putnam Association of Realtors, has an announcement that WPAR is in discussions with neighboring organizations on the possibility of a merger. The other associations are the Rockland County Board of Realtors and the Orange County Association of Realtors, and the idea also includes the WPAR-owned Empire Access MLS and the OCAR-owned Greater Hudson Valley MLS. A work group of the five entities has met a number of times to discuss how the possible merger might be achieved, what the advantages would be, and what potential issues might have to be addressed. As Vice President of the EAMLS, I am in that work group.

Given the economy and the recent trend of mergers of other associations around the country, there are some considerable advantages to a merger. For me, the eventual consolidation of the MLS systems is a big one, and one that I made a call for in the past. I have always worked both sides of the Hudson and belong to both MLS systems, and I have long wished that there would be just one MLS serving the region instead of the current fragmented (and expensive) arrangement. The MLS consolidation would not be instantaneous and would likely take effect a year or two after the merger of the Realtor associations, but the light at the end of the tunnel is encouraging. 

There are other advantages. smaller associations have fixed overhead and fewer resources to support their members. The idea of a strong 9000+ member association with a streamlined infrastructure and single set of overhead considerations is an attactive one. 

Of course, like any “marriage,” there are also questions that need answers. Three sets of governance, a new name, lockbox systems, the eventual MLS mergers and other necessary changes mean growing pains and possibly tough decisions. No binding decision has been made yet.

Is it a good idea? I think so– a great idea as a matter of fact. Membership will have to decide, but I can say with some confidence that with what I have seen thus far, this is a very good idea whose time has come. 

Realtor associations often say that they are the “voice of real estate” for their areas. This consolidation and pooling of strengths and resources will give our trade organization a voice that is stronger and more unified. That is good for members, and ultimately good for the public we serve. 

Stay tuned. 

Milky Way
        Earth                                                                               
             USA                                                                        
                 New York                                                     
                      Westchester                                      
                               Briacliff Manor
                                          Chilmark
                                                The Faranda House

Seoul, Korea, to Rego Park, Queens, to Ossining, NY to Briarcliff

Ossining to 7 other places in 4 other states to Ossining again to Briarcliff

10 years, 4 kids, one moderately sovent business, a dog, and a million bajillion gajillion dollars in debt later, we still smile. 

“Staging for the Average Homeowner” will be the theme for Marie Graham‘s workshop to be held Thursday, October 6th at 7pm at the John C Hart Memorial Library in Shrub Oak. The event will cover many of the more important underpinnings of home staging and how it can aid in the sale of the home, one of which is teaching you to see the home through the eyes of the buyer. 

Marie is the stager I use for my listings. She is ASP certified, and her work is nothing short of phenomenal. She can work with any home I bring her into and she is excellent with clients, many of whom have some stress and anxiety on changing anything in their home. When a stager makes your job easier as a broker, she is worth her weight in gold. Marie is 24 karat- I firmly believe that she is among the best home stagers in Westchester County. 

In addition to having a front row seat for her staging masterpieces in my own listings, I have attended her workshops before and they are very valuable for anyone who is selling or buying for that matter. The subject matter is well presented, myths are broken down, and the fundamentals are laid out in a very understandable way. 

I believe the right stager can make a huge difference in the sale and marketing of a home. Not all stagers are equal, so if you have an interest in learning more from an excellent professional, I strongly encourage you to attend the event. 

The Hart Memorial Library is located at 1130 E Main Street, Shrub Oak, NY 10588. It is just off the Taconic, and is within a half hour of Connecticut and southern Dutchess. It begins at 7pm. 

Recognizing that not all markets are the same and that we as brokers have an obligation to disclose material facts, my thoughts are centered on practices here in my home market of Westchester and the Hudson Valley. Simply put, I am not sure that marketing listings that are short sales as short sales first and foremost is the best approach. I have actually stopped the practice almost entirely, especially in cases where the home is still occupied. 

Our MLS has a Yes/No option for the disclosure of a short sale. We can say that the sale is subject to 3rd party approval. I think this suffices for disclosure. Most of my short payoff listings are the same as regular sales- owner occupied, cared for, warm and well-presented. Some have been downright upscale. I have found through experience that the more homey, attactive elements these homes have in common with equity sales is the best way to market them.

Phrases like short sale bargain, short sale opportunity, and in my opinion the worst, pre-foreclosure, all over the marketing can be counterproductive. There are several trends I have identified. 

• I get inundated by inquiries from these people who are “short sale investors.” 
• They attract more lowball offers from bargain hunters, bottom feeders and speculators.
• The buyers and buyer agents treat them more like REOs, with less notice for showings and, in some cases, insensitivity to the owner occupants. 
• Plastering “short sale” all over my listings began to brand me at one time as a less attractive option for prospective sellers who weren’t short sales and didn’t want to be lumped in with them. 

 

One of the somewhat unique things about Westchester County, especially south Westchester, is that it was almost completely developed after the 2nd World War. What this means is that there are very few newer homes, and the inventory that we have is older, often much older, than a typical home in other communities around the USA. The home I am living in now was built in 1962. A home I spent a chunk of my childhood in was built in 1890. We have terms here like “pre war” and “turn of the (20th) century” that describe some neighborhoods. 

This means that things wear out. Roofs need to be replaced, Plumbing needs to be upgraded, Electricity needs to be modernized, windows have to be replaced, and on it goes. Older homes, like older bodies, require more maintenance. 

The other side of matters is that Westchester is one of the highest cost places to live you can find. My own property taxes are over $16,000. The median price of a home is $635,000. 

When you mix “old” and “expensive” and a you aren’t talking about wine, then the purchase of the real estate requires due diligence. You have to do your homework, and you have to get a home inspection. A decent home inspection can be done for as little as $400. But the value of the $400 investment is priceless. It is more than a means of discovering possible defects and problems, it gives the purchaser peace of mind and serves as an instruction manual for home ownership. 

You just do it. To skip an inspection, or to rely on your friend the contractor to walk through and size it up is the ultimate in being penny wise and pound foolish. It can help you avoid a far more expensive mistake, and has almost always saved money for the buyer in my experience. Unless you know going in it is a gut renovation and nothing will be left after the work, you get the home inspected. It is the largest purchase of your life. Have a professional check it out before you go forward. 

Discovering Westchester County is like peeling an onion-anyone that views “the 914” as an amalgam of bedroom communities slumbering while all the action takes place south of us in Manhattan is missing out. For the last 37 years, Broadway has had an outpost right in Elmsford at the Westchester Broadway Theatre. Just last night, Ann and I celebrated our 10 anniversary at a fantastic performance of My Fair Lady starring Jennifer Babiak and Tom Galantich with a great ensemble cast. 

We love the arts. Ann is a Stuyvesant alum and plays three instruments, and I have it on good authority that my mention of Audrey Hepburn and Julie Andrews on our first date got me my second date. Before we got all tangled up in children and work we saw our share of shows, and as a matter of fact our first reception dance was from Rent. So, driving 10 minutes and parking for free to see an awesome musical with a great dinner is quite a luxury. 

The Westchester Broadway Theatre has been around for 37 years. It was originally called An Evening Dinner Theatre, and when I was younger my parents took me there twice (Fiddler on the Roof and South Pacific). In 1991, it became the Westchester Broadway Theatre, and for the better part of the last 4 decades it has been a source for more great productions that I could list- Evita, Chicago, 42nd Street, and dozens more. 

We had a wonderful experience last night. They start with a cocktail hour, dinner, and then the show. The place seats under 400, so it is intimate. We were in the 2nd row, with the stage centered with seats on three sides stadia style, so we could see the veins in their neck at the high notes. There is really nothing like a live performance, and this cast really brought it. You get chills.

Jennifer Babiak, a Long Island girl, was Eliza Doolittle and she was powerful. It is a tough role following Julie Andrews, Marni Nixon and Audrey Hepburn, but she was a good girl, she was! Just the right mix of vulnerability, passion, and what a voice. Tom Galantich, himself a Brooklyn product, was wonderful as Henry Higgins as well. It didn’t stop there, and if you are in the sound of my voice you should pick a date in October and enjoy yourself. 

10 minutes after we left the parking lot, we were home. As much as we love Manhattan, it is so nice that we have something so high caliber that is local for our own. The WBT is one of the great things about Westchester County, and as I have said many times, we feel blessed to live, work and raise our family here.

Put down roots here already!  

Something I read on Facebook earlier made me just a little sad. Chris Somers asked for opinions on the banks’ role in the downturn versus the borrowers, and one of the comments was just callous. This isn’t the first time I’ve heard it. I just wish it were the last. Rather than get into a flame war on Chris’s Facebook, I thought I’d take the classier safer route and preach from my own soap box. 

If you are fortunate enough to not be in financial difficulty, are current on your mortgage, and view the recession from the sidelines, it is incredibly unflattering to say things like “man up and admit you bit off more than you could chew” or “nobody held a gun to your head and made you sign for that mortgage.” I suppose that when the initial sub prime crisis hit in 2007, the majority of borrowers in default may have been irresponsible or naive. The loans were, after all, terrible products. 

But today? People I deal with today literally did nothing wrong except lose their job. They bought within their means, got fully documented legitimate conforming mortgages, and, in short, did everything people in this country have done for generations. 

Except lose their job. That wasn’t in the plans. And they didn’t lose their jobs because they were bad workers, they got downsized because of the recession. Oh, and the banks played more than a passive role in the recession, as we all know. If you’ve ever been called by a banking rep from overseas you’ll understand. 

Almost half of my company’s listings are short sales. Here is a partial list of the reasons for the short sale status:

• Unemployment. 
• Cancer and illness. 
• Sick relative forced relocation when they were  current on their payments but under water. 
• A few were victims of predatory lending. 

To the guy who thinks it is clever to inquire on one of my listings as if he were an interested buyer, only to pitch me  that he is an Internet search firm and can improve my search engine rankings:

I will never, ever do business with you. 

I really get pinched by the false alarm you cause when an entire admin staff puts what they are doing on hold, goes into service mode to answer an inquiry, determines which agent will take care of the potential buyer or seller, only to slide to the bottom of the pole and see your crass solicitation. That is SO not cool. Is is disruptive. 

I get solicited all the time. The Police Conference of New York called earlier, and the guy’s pitch was to stop child abuse, as if I wasn’t already against it. I’m the broker and owner of the company. I get approached by people selling leads, copy toner, advertising, web pages, payroll services (what regular agent deals with them?), business consulting,  and dozens of other offerings. 

But even the scam telemarketers promising me the sun moon and stars if I buy their product don’t have the temerity to masquerade as a phantom buyer to get my attention. Even the guy who knocks on my office door selling knock off perfume out of a cardboard box doesn’t pretend he’s a buyer for one of my listings. This wasn’t a blog comment. This was a consumer inquiry. 

Do you sell to cops by pretending there was a crime? 
Do you sell to EMS workers pretending that an octogenarian fell and broke a hip?
Do you walk up to rectories asking for a confession only to pull out your snake oil?

No, you just figure that I’ll pay more attention with the vague promise of a commission. You try and use my mission against me. 

For Pete’s sake, you are supposed to be good at getting found. If you have to resort to subterfuge, maybe the SEO business isn’t for you. 

I have written before on real estate investor mistakes, and one of them is worth expanding on. It is little discussed, but if an investor buys a property for rehab and resale, there is more than a simple margin to be focused on. The investor should also be guided by a realistic timetable. 

All too often, I see amateur investors holding out for a price no matter how long in takes. This is a huge mistake for 2 main reasons: the cost of carrying the property, and the opportunity cost of not turning the property over in a timely fashion. 

Carrying costs kill profit margin. The property taxes in Westchester are the highest in the nation. A medium home worth $500,000 can have property taxes of $15,000 or more. Holding that property for 6 months is $7500 in taxes. Holding that property for a year-far too long-can eat 3% of the value. Taxes aren’t the only incemental cost- utilities, maintenance and snow removal not only cost the checkbook, they can ad stress as well. 

Opportunity cost is by far the silent killer. There are two types of opportunity costs I see that neophytes seldom consider. They are the cost of money, and the cost of lost deals if you hold on too long. 

The cost of money is often simplified into the interest on borrowed money, but it can also be interest lost when the investor pays cash. If you put $400,000 cash into a house, you are taking it from an interest-bearing instrument like a money market or cash account and put it into real estate, which pays no interest. If that fund pays 3%, interest lost on a price of $400,000 over a year is $12,000. If you borrow $400,000, interest can be double or triple that amount, making that hour glass a real source of angst if you don’t move the property. 

The cost of a lost deal is another casualty of hubris. I recently interviewed an investor flipping their first house. When I told them what I thought the home would sell for, their emotion at the quote was palpable. I wasn’t hired. They still haven’t sold, and appear to now be chasing the market. Even if they get lucky and sell at the end of the year for an amount higher than I quoted them, they still lose. Why? Because the incremental amount they held out for is dwarfed by the money they’ll never make had they turned the property over in a timely fashion and parlayed it into another opportunity. 

All too often, newer investors make the fatal mistake of holding out  too long for a home run on every deal, when a good solid double in a shorter timeframe would keep them profitable and healthy. That can be disasterous. Remember, with the gigantic numbers we are throwing around in Westchester and the New York area, mistakes cost a king’s ransom. Tens of thousands, sometimes 6 figures. 

Time is money. You can make money back with prudent future transactional strategy if you don’t hit a home run on a deal. But you can never, ever get time back. 

I’ll never say never, but this evening I had to explain to a seller client why I was unwilling to take a listing for only 90 days. I fully understand the reason why sellers want to hold their agent’s feet to the fire and ensure that they aren’t stuck in a long term contract with a brokerage that isn’t working hard to get their home sold. However, even if I sold the house in less than 30 days, a 90 day listing is almost always too short. 

It often takes a good solid 60 days for deals to close in Westchester and the surrounding areas these days. That may seem like an eternity to those in other markets, but remember that we can lose a month just getting a home under contract. 

I never want to commit what I consider vast resources and tools, to say nothing of my own time, effort and cash, to a client that will wander after such a short time, especially if they don’t list at the price I recommend. Average time on market in Westchester is over 6 months, and even that is misleading because that doesn’t take prior broker contracts into account. 90 days is a bathroom break, and when you consider that we can’t do single property websites, google ad campaigns, professional photography, Youtube walking tours and pre list inspection all done in the first 48 hours, the time get s squeezed even more. It can take a good week to have all the marketing set up and the listing properly imported to all the 50 syndication sites we use.

This is, of course, inspired by events today where a seller had second thoughts about the 180 day agreement he already signed. It was actually an extension to a VERY short initial contract period at a higher price than I advised, and my agent who was working with the guy busted his tail for the client. The place was vacant, so he kept it clean himself, emptied the dehumidifier, and mother henned the heck out of the place. 

A DO understand a seller’s fear of being tied up with a firm that is just waiting for another firm to bring the buyer. I get it. I have seen listings horribly neglected that were tied up with a brokerage for a year.  But that is’t us. We are as aggressive as you can get, and if you doubt it, google the address of one of my listings and tell me what you find. I know you’ll find extraordinary exposure, and that should have our clients resting easy that they are in good hands, and that we are in it for the long haul. 

By the way, I never say never. I would take a listing for 90 days under the right circumstances. I once took a 30 day listing, and it closed 36 days later. But that is a blog for another time. The takeway for consumers is that you want a broker that is committed and eager, but not one who is deperate. Desperate doesn’t sell.