There is one rather immutable truth to real estate: if you write a commission check, you are at a closing table selling your property. 

Which, I believe, is the point. Closing. 

Often, when listing a For Sale By Owner (most end up listing), I am asked what happens if someone who expressed interest while the home was a FSBO buys after I list the home. My answer is that if they didn’t buy then, but do buy now, then I have done my job. 

Getting them to buy is what the agent is paid for. If the seller could get them to buy, they wouldn’t need me. Just because they saw it with the owner first it doesn’t mean anything. We aren’t paid for getting people first, we are paid for getting people to the closing table. 

In other words, outcome. Results. 

Upon occasion, I will grant a seller an exclusion on certain buyers– it can be a neighbor, it can be someone who is trying to sell their place so they can buy now, or any other sort of buyer. My exclusions are not an exemption from commission, and here’s why: an offer is just a beginning. It is work and skill to affect a closing. If I gave my seller client a 0% commission for an excluded buyer, a complete exemption, then it is THEY who will have to be the agent, not me, because I can’t hold that buyer’s hand for 2-3 months for no compensation. 

If the seller client wants to handle pre-qualification, offer, negotiation, contracts, inspection, mortgage process title and closing alone on their own, they invite disaster. I never want to be in competition with a client, nor do I want to wait unpaid on the sidelines while they engage in a Do It Yourself project on the biggest transaction of their life to save a few points. A saved line item is often at a cost of a lower net, and that is not conjecture- it is a fact. I’m better than someone selling their own house. 

Exclusions make sense when a predetermined buyer comes in early in the process, saving the listing agent time and marketing resources and all parties can just do the work from offer forward to closing. There is no buyer agent to pay, and a reduction in fees can be negotiated. However, an elimination of fees altogether is penny wise and pound foolish- too much can go wrong. You want a professional working for you, and no professional can work for free. What good is “saving” the commission if it doesn’t close?  

I know I’ll hear dissent on this post, but it is my belief that the buyer agent (or listing for that matter) attending an appraisal is a waste of time in most cases. I have had situations where the borrower themselves wanted to go, and after they were ignored by the appraiser, who left 10 minutes after arrival, they turned to me and wondered aloud why the event was so, well, uneventful. 

We don’t play a part. 

I received a phone message today from a listing agent telling me that she was upset that I did not accompany an appraiser to their inspection this morning. I don’t want to ruffle her feathers, but other than opening the door, I serve no purpose. As a matter of fact, most appraisers would like to be left alone to do their job without me to contend with. In New York, appraisers are licensed and insured. They are MLS members and do not need supervision. They take pictures, measure, and leave. On average, appraisals I have attended for a regular starter home of 1500-2000 square feet take about 15 minutes or less. 

I have nothing against attending if nothing else is scheduled, but I don’t see how it helps except in rare cases, such as in a short sale. Given their rather mundane nature compared to a home tour or home inspection, I would characterize appraisals as more of a “back of the house” thing than something for public consumption. For example, a diner at a restaurant would not be very helpful in the kitchen (the back of the house), nor would they be viewed as welcome. They would pretty much get in the way. That is how I see my presence at most appraisals. There might be instances where my attendance is helpful or at least not hurtful, but being there for the sale of just being there strikes me as unneeded busy work, and I am busy enough. Appraisers don’t need me to tell them where the basement is. 

Given the local nature of our business, other areas may differ, and there are times when it can make sense. As a general practice in most of my own cases, however, I find that the only beneficiary of my trip is the gasoline companies. 

Would you as listing agent be upset if the buyer agent did not attend the appraisal?

This is the market data for September of 2010 for single family homes in Peekskill, and all information is sourced from the Westchester-Putnam MLS.

There was nowhere to go but up after a very poor August, and we may be looking at a “new normal” for this charming little city on the Hudson. The median price is up from last month but down over $160,000 from September of 2009. Transactions totals are higher, which is a good thing, but the volume of available properties- 81- means there is almost 2 years worth of inventory available, which will suppress prices. 

With 8 pending sales last month, and 4 pending sales this month after the 4 September closings, nothing new has gone into contract in the last month. When your median sales price is less than $200,000 and the median asking price is $279,000, it doesn’t take a genius to figure out that the buying public is still waiting for prices to decrease. I am working on a deal that will add a sale to the hopper and greatly increase the median price, and that is because I have clients who know and love the area. They have good reason- Peekskill is a great place to live and work, and when the buyers wake up to what they can get at these low prices, you’ll see a spike. All markets are cyclical, and I think we are witnessing the calm before a storm of activity. 

Get yourself a free Listingbook account and check out homes for sale in Peekskill. It is absolutely a buyer’s market here.

Previous posts about Peekskill are here.  

Your business IS our business if you wish to do business. 

Buyers in today’s market are in many ways in the driver’s seat in the purchase of real estate. However, they answer to a lender prior to closing, and in the case of cooperatives in New York, they also have to pass the board application process. Since a co op transaction typically lasts 90-120 days in our market, sellers are rightfully cautious about tying their home up in contract with a buyer who either can’t get financing or pass the board. Therefore, they do more homework than usual; a pre approval is just a start. 

Co op boards often have requirements that are above the procurement of financing. Buyers can expect many standards to meet, such as: 

• Minimum down payment
• Minimum income
• Minimum credit score
• Debt to income ratio threshold
• Post closing liquidity requirement

Therefore, there is plenty that must be ascertained about a buyer before singing contracts and waiting for them to get financing and board approvals over a period of months. Mistakes can cost a third of a year. The seller has a vested interest in the buyer getting approved, and has every right to ask for asset and income statements, credit scores, and even tax returns along with the lender pre approval.

Here’s one from the other side of the closing table, where I represented buyers on a 5-month odyssey to purchase a short sale in Yonkers. It made me appreciate the waiting game that buyers must endure, and how valuable status updates are to home purchasers of a short sale in order to stay engaged and committed to the purchase. Buyers need to be updated to, among other things, time their mortgage application, appraisal, and rate lock.

Note that I did not say anything about ordering title work. Title work in a short sale MUST be ordered by the seller’s attorney in the beginning to ensure there are no 3rd party liens that might scuttle the sale later on. 3rd party judgments and liens are common in default properties because when there is financial hardship, there are other bills than the mortgage that go unpaid.

The home my clients sought to purchase was perfect for them- a recent build on a dead end street with a good location for their commute to work. Things on the seller’s side were not organized from what I could see, until I made substantive contact with the seller’s attorney, who entered negotiations later in the game when a private 3rd party hired to negotiate the short sale was sacked mid-process. I can’t judge their circumstances, only the scenery from our point of view. From contract signing in May until August, everything seemed to be in limbo.

In early August, the seller’s attorney spearheaded negotiations. The short sale was approved in late September with terms the seller could live with. We closed September 29, which was a nice anniversary gift. His communication with me was crucial to my buyer clients’ management of their mortgage financing. When they were ready, we were ready. No delays, no snafus, minimal drama.

This was a unique file in that I had a direct line of communication with the seller’s attorney, which brokers seldom have. Typically, I would deal with a listing agent, but that agent would be the conduit to their attorney. But the bottom line here is that the attorney’s involvement was indispensable, and the communication with our side affected a successful outcome. New York is different from many states where an attorney is not part of the process. But in New York, Connecticut, and New Jersey, it is clear to me through experience that without an attorney closely involved in the short sale, the closing may not succeed.

(originally posted at New York Short sale Blog)

Yonkers is the largest city in Westchester County with a population hovering near 200,000. It borders the Bronx to the south, Mt Vernon and Bronxville to the east, and Hastings and Scarsdale to the north. It has some fantastic Hudson waterfront all along the western border. It is also the former home of my parents, who both lived on McLean Avenue when they were dating in the 1940s. My father graduated from Roosevelt High school on Tuckahoe Road in 1938.

What does 550,000 buy in Yonkers these days? We recently had a buyer close on a 2004-built 2 family brick home on a cul de sac for $555,000. It originally went on the market in 2005 for $900,000. How times have changed. The home has separate utilities, including heat, two 3-bedroom 2 bath apartments, each with its own balcony with a stunning view of the city, and a finished basement. Other nice characteristics include central air conditioning, hardwood floors and Andersen windows. It was a short sale and took 5 months to close, and we’ll most likely help the owners grieve their taxes to a lower amount given the high assessment. 

The home is located near Sacred Heart and Gorton High School, with North Broadway and many other city conveniences in close proximity. 

If you’d like more information about Yonkers real estate, remember it is a family affair with us, and we have deep ties there. I actively sell there and a free Listingbook account will allow you to search the MLS for Yonkers homes.

I got an email this morning from a well meaning associate about a draconian tax on real estate transactions supposedly due to start in 2013, and of course the editorial message of the email decries President Obama, Speaker of the House Pelosi, Harry Reid,and the rest of the Democratic leadership. The email has an image of a newspaper story from a paper I never heard of (The Spokesman-Review of Spokane, Washington) which must be included, I guess, for legitimacy.  No liberal am I, but if we are going to decry any politician on the right or left, I think it should be for something that is true. 

Here is the link to the Snopes.com entry on the email, which specifies that there will be no 3.8% tax on real estate transactions in 2013 or any other year for that matter. A federal tax on transactions in this age of short sales and negative equity would result in the storming of the Bastille and is antithetical to anyone who wants to remain in office. You just can’t do it. Guess what? They aren’t. 

Currently, New York state has one of the absolute highest transfer taxes in the nation: .04%, or $1,600 on a $400,000 sale. Yes: less than half of 1%. For the federal government to impose a tax that is on a scale of a real estate commission it would mean they are increasing the New York transfer tax by almost tenfold. Absurd, and untrue.

Snopes indicates that a tax is proposed on high earners on investment income over extremely high thresholds, I wouldn’t be in favor of that tax either, but if you are selling your $250,000 home in Pflugerville or Shamokin, you will not have to pay Uncle Sam an additional $9,200. 

Update: The National Association of REALTORS has published clarification on why the myth is misinformation. 

I still love helping buyers. I don’t do it as much as I used to because I am running the company and most buyer requests are given to my very good team of agents who give great service. Our buyers get their own Listingbook account for MLS home searches, automatic email updates when a home that fits their criteria hits the market, and of course many of my buyers look on other websites also.  

There is one thing that perplexes me about some buyers that I haven’t been able to quite figure out. In speaking with colleagues I am not alone in this. I am not sure if they do this exactly on purpose or not, but it seems like they do: While searching for a home online, they find a home of interest. So far so good. Then, they must immediately turn their computers off without writing anything down or bookmarking the property and call me with sparse information on the house they just saw, and I have to triangulate the sketchy details they vaguely recall to figure out what listing it is, often in my car! They might remember a town, a price, maybe a street, or even a physical description. But no address or MLS number, and certainly no email to the link. 

Now it seems to me that just about every home search site out there has a means of bookmarking a favorite property or emailing it to your agent. And if it doesn’t you can always write down the address or MLS number. But all too often, I’ll get a call on my mobile phone while I am driving from a buyer who wants to see the green house in Thornwood by the church near that big rock with all those trees in the yard. I’m exaggerating of course, but the ID of a property should never be that hard if you just saw the thing online. Write it down, email it, get a photo of your computer screen with the digital camera, whatever it takes, but help me help you! If you email it, even by right clicking and copying the link in an email to me, it will get me the needed information without having to reconstruct what you did to find it. And the less detective work I have to do, the better I can help.

So, to all you buyers that call your agent (often in their cars) with less than full information on the property as if we are wizards (we do have the MLS after all), please just do us this one teensy favor: write it down or email the thing to us so we can do less detective work, keep safe in our cars, and devote more resources toward advocating for you. 

If you get a free Listingbook account you can notify me of the properties you like effortlessly! 

What can you buy in different parts of Westchester County for half a million? Interesting question. I did a survey of closed transactions around the county in the past 30 days, and what I found speaks to the different characters of the many areas of our fair county. Bear in mind that these are closed transactions since September 3, not asking prices or deals from a bygone era. All information is taken from the Westchester -Putnam Multiple Listing Service. 

• In Somers, home of my alma mater, John F Kennedy Catholic High School, $487,000 bought a 3 bedroom 2100 square foot raised ranch with a granite and stainless steel kitchen on almost an acre. 
• In Mamaroneck, $520,000 bought a 19th century 1900 square foot 4 bedroom colonial on a third of an acre. 
• In Pelham, $519,500 bought a 1920 era 1500 square foot 4 bedroom dutch colonial on just under a fifth of an acre.
• In Briarcliff Manor, where I live, $520,000 bought a 1905 colonial on 3 acres with 3 bedroom,s 2 baths, and a 2 car garage.  
• In Ossining, my home town, $495,000 bought a 2700 square foot 3 bedroom 3 bath colonial with a stainless steel kitchen and finished basement on just under a quarter acre. 
• In Pleasantville, $487,000 bought a 2 bedroom, 2,5 bath 2400 square foot townhome. 
• In Larchmont, $505,000 bought a 1939 3 bedroom 2 bath split with a garage and fireplace. 
• In Croton on Hudson, a beautiful river village, $503,000 bought a 1930’s art deco home with 3 bedrooms, 2 baths and 2600 square feet on 1 acres.
• In Yonkers, Westchester’s largest city, $500,000 bought a 3 bedroom 1800 square foot colonial with an updated kitchen.
• In White Plains, the county seat,  $485,000 bought a 2005-built 2 bedroom 2 bath 1600 square foot garden style condo. 

This is for single family home activity in the Briarcliff Manor school district for September of 2010. All information is derived from the Westchester-Putnam Multiple Listing Service. 

Compared to June 2009, Briarcliff Manor sales volume is about even. Transactions are down one, and median price is down about 2%. 10 Homes are under contract, which indicates more strong activity, albeit at a lower median price. 

In the Active section, you might notice that the late Brooke Astor’s estate, Holly Hill, has come off the market. It was replaced this past month by the Ash Ridge Estate as Briarcliff’s most expensive available listing. 

There are 51 available home in inventory, which is a healthy selection and just under a year’s worth of inventory.

Previous posts on Briarcliff Manor.  

If you’d like to search for a home in Briarcliff, get yourself a free Listingbook account and search the MLS like an agent. 

This market report is for single family home activity in the Ossining school district for September of 2010. All information is derived from the Westchester-Putnam Multiple Listing Service. 

In the wake of last month’s encouraging numbers, this September was way down from September of 2009. Sales are down by 40% and the median price tumbled $65,000. Not good! 

However, 22 pending sales is healthy, and the available inventory of 161 homes offers great options for prospective home buyers. 

I would not read much into the down numbers; Ossining has not fared poorly lately and was due for a down month. I have a feeling October will be a strong bounce back. 

Previous postings on Ossining.  

You can search for a home in Ossining by getting yourself a free Listingbook account. 

In general, I love being number one. In 2007, I was the top ranked agent in the Westchester Putnam MLS for single family home closings. I was very proud. I also won a high school wrestling tournament my senior year of high school. Very gratifying. Westchester County is also number one in the USA in something, but I doubt anyone will celebrate. What are we the champion in? High property taxes. 

I have to say, that being number 1 in a nation of over 300 million with who knows how many thousands of counties must really take work. This is especially the case when neighboring Fairfield County, CT pays about half the taxes on similar property with not a scintilla of sacrifice to their quality of life, education, or safety. 

How did we get here? Well, I would place plenty of culpability on our former 3-term county executive, who spent money like a drunken sailor, was ubiquitous in the local society pages, loved to spam our telephones with recorded messages and called people who wanted to reduce or eliminate county government “clueless.” But overall, we do not have a sustainable municipal structure. The 19th century model of villages, towns and county governments with overlapping elected officials and redundant services is a huge chunk of the problem. The preponderance of boutique school districts with vast resources concentrated in small wealthy villages with high schools of 300 students next to less affluent cities with thousands in their high school(s) is another big problem.

In Connecticut, villages are for postal addresses and nothing else. In my home town of Ossining, we have two villages with separate governments, police departments and municipal services, to go along with the unincorporated town with its own government, police department and municipal services. 

Westchester also has lots of  school districts that are minuscule in size, with the discussion of consolidation occasionally coming up but vetoed for reasons often not discussed in polite company. The overlap in administrations, superintendents, principals and other roles continues to add to the black hole of spending. 

Other problems loom, such as a $50 million equal housing lawsuit the county must contend with, as well as the ever growing pensions of public employees with defined benefits flying in opposite directions of the markets and defined contributions an anathema to the unions.

It is my hope that first term County Executive Astorino will be given the chance to eliminate the waste, and bring county spending and government in line with sanity. The town of Ossining police department has just agreed to merge with the county force, which will save some money. But we have a long way to go.  

Realizing that they cannot ruin lives without, um, following the law, Chase has joined GMAC in suspending foreclosures while they sort out what has become regarded by Inman News as the “robo signing controversy.” Governing agencies have criticized the large lenders for sloppy procedures in pursuing foreclosures, requiring them to audit their files and make sure they are following the proper steps prior to repossessing and displacing more people. In Chase’s case, 56,000 foreclosures are now on hold in 23 states. 

If you’ll allow me to indulge in a metaphor, the government is making sure the banks find the soft tissue of the borrowers so they can make a cleaner kill when they pull the trigger. You don’t want the victim, um, delinquent borrower to writhe in pain on the floor and have to use a 2nd bullet to finish them off.

Given the stories we have read recently on this very platform of banks foreclosing on homes owned free and clear and beginning short sales on the broker’s home instead of the clients, I agree that it is a good idea to mind the Ps and Qs prior to booting people out of their homes and into a Super 8 or basement apartment.  

One has to wonder aloud how many people have lost their homes who shouldn’t have, and how many more lenders will suspend their own foreclosures. 

Yet again, another mess, created by the banks. 

The “Real Estate as an Investment” Canard

Two items of significance today:

1. I have a closing at 1pm. This is very pleasing to my wife, who attaches importance to having funds in the company operating account. 
2. Regarding the wife: Nine years ago today, Ann showed up. For our wedding. This was something that at the time was not an absolute certainty, as she had some serious pre-wedding jitters the whole week before, and I remember getting to the church hearing an old car in the parking lot with its alarm blaring loudly for what seemed like 15 minutes. The owner did turn it off before the ceremony, but I was paranoid that it was a bad omen. I really was afraid she might not show up. I remember seeing her arrive in the back of the Church looking like  a million bucks and feeling relieved and dazed. As we walked out of the Church, she turned to me and said “Oh, that’s not any different.” I am sure every husband can remember that first moment when he wanted to strangle his wife. That was mine, 30 seconds after the wedding. She worked fast. 

Actually, working fast seemed like Ann’s superpower. Luke arrived 9 months and two  weeks after we wed. Huge blessing that was, as anyone married in their 30’s knows. In the past nine years we have brought 4 children into the world, endured a miscarriage, said goodbye to two dogs, my brother and her father, and partnered up in this crazy real estate company. Ann is the administrative goddess who has harnessed all my hot air like a virtuoso, and we now have 18 licensees docked with the company with half a dozen more waiting in the wings. The company has grown in the midst of a horrid market, but she’s been right there with me every battle, skirmish, win, loss, tie, injury, obstacle and solution and she always packed me a nice sandwich, often with a pickle, and always garnished with encouragement and faith in me. 

Gregory, our 5 year old is on the spectrum for autism and she’s been an endless well of support and love for him, educating herself immensely into that mysterious world in spite of all the overwhelming plates we must spin as self employed parents of 4 working in an uber-competitive New York market in a miserable economy. 

She is still a fun date, cuts across a room like a Rockette, and has not completely been jaded and corrupted by my dark sardonic humor. The children worship the ground she walks on, and with good reason. She has created their childhoods to be like the Garden of Eden. The dog reveres her. The agents in the company adore her. I have learned to listen to her. Sometimes. I can completely be myself around her, which is priceless to me. 

As hard as we work, there are times when she relaxes by playing the piano. The children all take their stations nearby with their book or toy of choice, the dog takes his perch, and I hear it all from whatever table I am tapping on the laptop. The phone is mercifully silent for a few minutes, and there is no fire to put out as her music echoes throughout our home. These are the moments where I am reminded that I am blessed. 

More wedding pictures. 

I was first licensed in Rochester, New York in 1996. I remember receiving a paper memo from my mentor about what tools I’d need to start my career. Just the fact that it was a paper memo speaks volumes. Among the things needed:

• Beeper
• Voicemail account
• 3-ring binder
• Plastic sleeves for the listing presentation
• Day planner
• Copy of “List More, Sell More” by Jerry Bresser
• Cassette player for training tapes
• A photo of myself saved on a floppy disc for cards and brochures
• Atlas map

The office would provide all MLS forms, a dedicated fax number, and post it notes for phone messages. I had my own section in the message carousel at the front desk. 

AOL arrived in the office in 1997, when a PC replaced the MLS idiot terminal- listings now had a photo!! I chose the screen name JPHILIP as a lark- I hated my first initial/middle name setup inflicted by my parents. It was my first email address and I still have it today. The conventional wisdom at that time was to not devote too many resources to web pages or Internet marketing because it was an unknown commodity. I was approached by someone selling websites to get one, but all I did was pay $50 and register jphilip.com. My girlfriend at the time asked why, and I said jokingly that I thought I better get it before someone else did. If I only knew the headache getting jphilip.net would be a few years later. 

By 1998 I had my own PC and could work from my apartment, to the consternation of my manager. I had an analog cellular phone and a voicemail hotline tree with 15+ extensions for property descriptions of my listings. I added Microsoft Word (not Office- Word.) to my tool box. I retired my beeper and voicemail accounts. CDs replaced cassettes.  

Today, a new agent would have a far different list of tools needed to begin their business. These are the things a new licensee should have to begin their career:

• A smart phone with blue tooth
• A laptop with a wi-fi card
• A dedicated website with an IDX home search
• An Active Rain account, a Twitter account, a LinkedIn profile, and a Facebook business page
• A Gmail account with Google Docs and other Google business solutions, such as online photo and graphic storage.
• Full online organization so what used to be on Outlook is now in the Cloud- calender, planner, events, contact database, and a robust RSS reader for news, blogs, and Google alerts. 
• GPS
• Copy of “List More, Sell More” by Jerry Bresser

Earlier this morning, Margaret Rome called me and we had a very nice conversation about the business. I emailed her after she commented on a post and she picked up the phone to reach out and speak in person. We had never met prior, so it was unexpected and completely out of the blue. Margaret just wanted to clarify her meaning in her comment, which she didn’t need to do- I knew where she was coming from and that’s why I emailed. It was an absolute pleasure to talk shop with someone with experience and class. When she signed off, she wished me a great day. 

Then, the magic started. 

Later in the morning, I got a call from a buyer client asking me to write an offer on a home we saw yesterday, which was submitted midday today. We haven’t yet gotten an answer, but I like our chances. 

We also received two best and final bids on one of my listings during the day. They have been submitted and we await a decision.  

Then, among the emails I got tonight:

Client Email 1: 

Are we on an automatic sending list?! We signed a contract today, we don’t need to look at anymore houses… We found a good one thanks to the best realtor in the world …

Client Email 2:

Hope you know the closing time is now 1 pm instead of 2 pm, same date Sept 29

In email number 1, I knew the signing was scheduled. In email number 2, I was unaware up until that point that a closing had been scheduled.

In both cases, we worked long and hard- the second one, as a matter of fact, is a short sale. 

You can’t make this stuff up. I need to talk with Margaret Rome more often. I think she has the touch.