Commentary • Selling • March 12, 2024

New York’s New Property Condition Disclosure Statement

by J. Philip Faranda

For more than 20 years, home sellers in the state of New York have been required to furnish their buyer with a form known as a Property Condition Disclosure Statement (PCDS). It is a collection of several dozen questions that the seller is required to answer about the characteristics of the home. The law always allowed sellers to forgo the statement and credit their buyer $500 at closing instead, which is what sellers in this area did all the time. It was small price to pay for the theoretical shield of not making any representation that could be erroneous. As you can see, some questions are not easy to answer.

This is just a snippet from the 8 page, nearly 60 question form, but I can see why the advice was always to issue the $500 credit instead. Our housing stock around here trends older. How would someone know if there was ever a fuel tank on their property 100 years ago, or if there was ever a landfill there? The house I grew up in was on a former peach farm. That sounds harmless enough, but for all we knew there could have been a deep well, or a garbage pit, or a garage or fuel storage 100 years prior.

The law recently changed, and the following is the memo we got from our friends in Albany:

On September 22, 2023, Governor Hochul approved new legislation that provides significant
changes to the Real Property Condition Disclosure Statement (“PCDS”). The new law will go
into effect on March 20, 2024. This notice is intended to provide important information to real
estate licensees.
In advance of the change in law, the Department of State (the “Department”) has updated the
current PDCS, available on our website. Both the existing form and the future form will be
available until March 20, 2024. Real estate licensees are required to use the updated form, for all
transactions, starting on March 20th. Failure to use the correct form may result is liability to both
sellers and licensees. Accordingly, it is important to all parties to use the correct form starting
March 20, 2024.
In addition to new disclosure requirements, a key provision of the new law will be that sellers
may no longer forgo giving the PCDS in exchange for a $500 credit at closing.

The change has caused quite a stir, since there is no alternative to the statement anymore.

Here’s my advice to all home sellers:

Talk to your attorney.

That’s it. That’s my advice. And if you think I’m being glib or passing the buck, let me explain that this is a recent change to a law that requires new paperwork, and the proper source for legal matters and related paperwork is…your attorney, not your broker. It is ethically prohibited for us to give legal advice.

Like any change, this is causing consternation and stress in the real estate industry, and like most changes the angst is worse than the reality. This form was filled out all the time upstate where $500 was not small change, and I’ve never heard of it causing any issue.

Community News • March 8, 2024

Bonnie Meadow Rd, AKA Dick Van Dyke Show Way

by J. Philip Faranda

If you’re my age or older, you probably recall the the old Dick Van Dyke show. Dick Van Dyke Played Rob Petrie and his TV wife Laura was played by the great Mary Tyler Moore. You may not recall the exact address, but the Petrie family lived at fictitious 148 Bonnie Meadow Road, New Rochelle. Bonnie Meadow Road actually does exist! 9 out of 10 Westchester residents over the age of 50 know the show was set in New Roc, but even I didn’t know the address.

In my travels, I actually drove past Bonnie Meadow Road the other day, and I found out that it had been also named Dick Van Dyke show Way. This made me curious, so I did a little googling, and I found out that the local residents petitioned the city of Rochelle to rename the street for the iconic sitcom after Mary Tyler Moore passed away. The approval was around 2018.

That’s not all. Carl Reiner, the producer of the show (and father of Mike Reiner, who played Meathead on All in the Family) lived on 48 Bonnie Meadow Road back in the 1950s. He often stated that the show was based on many of his experiences living in suburban Rochelle at that time.

As I drove down the street, it was very clear to me that the on the set of show was obviously based on split branches that still exist on the street today.

Art imitates life!

Commentary • March 1, 2024

What’s Up With All Those “We Will Pay You Cash for Your House” Signs on Street Corners?

by J. Philip Faranda

If you’ve ever wondered what the story is behind those flimsy looking signs nailed to telephone poles all over the place promising you a fast cash sale on your house, I have the answer.

I’m sure you know the signs I speak of. They are known in the industry as “bandit signs.” Some are professionally printed, others look like they were hand written with an oversized marker. They are meant to get attention, and they do work. It does seem strange, however, that someone with the means to write you a check for your house would be running around planting these signs on road sides and nailing them to poles. Decidedly not glamorous.

The people who have them posted are typically known as “wholesalers,” and they are more like middle men than the end buyer. The business model is to make the home seller an offer for less than market value, and then assign the contract to a real investor for a markup, which is where the wholesaler makes their profit.

For example, let’s say you are in financial difficulty or facing foreclosure and you see the sign at a red light. You call, and the “investor” comes to take a look at the property. Let’s pre-suppose that your home is worth $500,000 “as is” and maybe $580,000 with some renovations, like new bathrooms and a kitchen. The wholesaler makes you an offer for $375,000 with a fast, “as is” close, and then they work on assigning the contract to an investor, but the investor is quoted $385,000. That $10,000 is how the wholesaler makes their money.

How do I know this? I’ve met many of the wholesalers in this market. I called a few of them, but most of the time they call me, because we have an investment group that buys houses.

The practice is legal for non-licensees but as an agent I would not engage in it. The wholesaling model is no different than buying something at a thrift shop and selling it for a profit on eBay. “Buy low, sell high” is not a new idea. If you ask me if the people who engage in the model are advisable to deal with, my answer would be that it depends. Some of them are fine. Some of them are slimy. I’ve been exposed to both. There is a concern voiced by some that there is potential for abuse here- an elderly person who might have no reason to sell for less than market value might think that $375,000 is awesome because they bought the place 50 years ago for $65,000. I would agree that such an arrangement is exploitation.

Why don’t I do it? The model is dangerously close to selling what’s called a “net listing” in New York, which is prohibited for licensees. But if the question is more broad, like would I offer that little old lady $375,000, my answer would be no. But that’s a far deeper dive for another post. But for today, now you know what those bandit signs are all about.

Market • February 29, 2024

What $705,000 Will Buy You in Ossining

by J. Philip Faranda

If your budget is in the $700,000 range and you’re looking in Ossining, you’ll be pleased to know that you can still buy a 4 bedroom home on over an acre like the one we just closed on this week in town. 5 Ridgeview drive has 4 bedrooms, 3 baths, and a 1.6 acre lot.

The MLS description:

Sprawling ranch on a level acre plus and cul de sac road near all local amenities! Brand new driveway, impeccable landscaping, and delightful curb appeal. Large flat yard with over an acre of a half of room for all you desire outside! first time to market in over 70 years after contactor owner has lovingly maintained the domicile. T shaped layout with 3 bedrooms inclusive of master bedroom/bath, formal dining room, and bright living room with a wood burning stove in the fireplace and bay windows showcasing the stunning private patio. The short hallway to the back rooms with floor to ceiling windows viewing the patio and yard, 4th bedroom with a second master bath en-suite, and family room with lots of windows and sliders to the rear deck overlooking the back yard and wooded bliss. The full basement offers more opportunity for a rec area, home office, storage, or whatever else your heart desires. A stunning home at an unbeatable price point.

Indicative of the market, the home had an accepted offer after 8 days. The sellers were wonderful clients and we wish them the very best going forward. This one is gone, but we have more. Contact me at (914) 450-8883 and my team can help you find your dream home.

Buying • Commentary • Selling • February 27, 2024

It’s February in New York, so Let’s Talk Swimming Pools

by J. Philip Faranda

Swimming pools are probably the last thing on most peoples’ minds but we are still selling homes that have them, and this thought is a bit overdue.

Swimming pools are an improvement, so they add value to a property. They can’t not add value presuming they are in working order, but there’s a but. The “but” is that while pools do add value to a property as an improvement and amenity, they also reduce the number of prospective buyers. There are two chief reasons for this.

The first reason is that, simply put, some folks aren’t pool people. It’s not their thing. They therefore aren’t interested in the added work, expense, and maintenance of a pool. And believe me, pools are all of those things. They represent an additional layer of duties, they come with extra costs, and they require maintenance from the homeowner, a pool company, or both. If you aren’t into having a pool, you will never want that additional layer of headaches like pool furniture, pumps, chemicals, safety precautions, and 100 other joys of ownership.

The second reason is safety. In 2007, when we were looking for a larger home with a 4th baby on the way, we did find one home that checked all the boxes in New Castle out by Millwood. It was an awesome colonial, it had wooded acreage, a woodburning fireplace, a 2 car garage and a full basement. But my kids’ mom vetoed it immediately when she saw that large inground pool in the back yard. Our son had just been diagnosed with autism, and there was no safety precaution in the world that would give us more peace of mind than the simple absence of a large drowning hazard in the back yard. We passed on it.

There is a lid for every pot, so I’m not down on pools despite their smaller “pool” (sorry) of buyers. I’ve never not been able to sell a home due it is having a pool. But over the years the question has been asked, and I think buyers know that the arguments against a pool may not justify a lower price, there are still enough pool people out there to find them worth the money and the additional responsibility.

Real Estate Tips • Selling • February 22, 2024

Price Changes Are No Longer Guesswork

by J. Philip Faranda

When I was first licensed in the 1990s, if a house didn’t sell for a period of time like 30 or 60 days, we would often reduce the price. Sometimes it was because we had too few showings, or because the showings we had didn’t yield any offers. On occasion, some home sellers would voice concern at a price change because no one had seen the house to give them price feedback. We’d have to explain that the feedback was the actual absence of showings. It wasn’t a truly data-driven process, however, because we had no means of measuring who saw the house either through their agent’s analog means (like seeing it in a broker’s binder) or advertised in publications and passed on it. We did have ample evidence that once a price was reduced, that the market responded.

It’s very different today. We have a number of digital means of measuring the interest -or lack of it- in a listing based on online metrics.

A few examples:

Web traffic. We have access to dozens of websites that can inform us how many people have viewed the property, saved it, and if they viewed it multiple times. Zillow, Trulia, Realtor.com, our own website, and our client platforms all have some form of revealing the listing’s performance.
Saved or Bookmarked listings. The same online assets can also tell us how many people added a listing to their favorite or saved list.
Proprietary client portals stats. Often when a buyer client is working with an agent, that agent’s brokerage has an online client platform (ours is called RealScout) that tells us when a particular listing is opened or saved. This is not like raw web traffic. These are active clients who have a representation contract with an agency and have a login to a concierge type site that gives us rich data on a listing’s performance.
Predictive analytics. This is crazy stuff. The program uses big data and is enhanced by AI, and can give us a far deeper dive into activity around a listing, and also tells us how many registered clients would likely save or match up with a listing by an algorithm fueled by web behavior. Simply put, it will tell me that a listing will garner 40 interested parties at $840,000 but 65 interested parties at $799,000. This is extremely data-driven and granular.
Reverse prospecting. This is in the back office of the MLS and gives a listing agent a list of every instance where a fellow MLS member has sent this listing to a client.

Given that with virtual tours, floor plans, high resolution photos and even drone imaging every listing is virtually an open house online 24/7, we can therefore see if the listing’s performance is in sync with the online metrics, or if a price reduction is in order. Let’s take, for example, two similar listings with comparable characteristics; one is priced at $699,000, the other at $729,000. The 699 home has 500 unique views, 25 favorites, 20 showings the first two weeks, 35 reverse prospecting matches, and 2 offers. The 729 house has 350 unique views, 3 favorites, 8 showings the first 2 weeks, 15 reverse prospecting matches, and one offer below asking. It doesn’t take much to conclude that $729,000, even in this market, is too high.

If a home is under performing on the market, the seller should ask their agent to see the data on the home’s online metrics with consumers. The agent should be able to compare their performance with a comparable property, and even use the predictive model to see what would change with a price improvement. The math defines the path- armed with data, the agent and client should be able to know what the best move should be for pricing.

Upon occasion, we are asked by the seller if the perception of the public will change with a price drop. The concern is that the seller might appear desperate or something like that. Soon, I will write a piece on the things we overthink in this industry. That question will be prominent. In this market, those fears evaporate when the buyer competition heats up with a correctly priced listing.

Commentary • February 21, 2024

How Online Reviews Have Impacted Real Estate Agents

by J. Philip Faranda

Back in 2009, I was approached by Redfin to help them enter the Westchester real estate market as a referral partner. They did not have employee agents here, so referring clientele to other brokerages would be a win/win arrangement to start. I was eager for any new source of business, and took a closer look. Part of their vetting process was to survey my past clients, which was fine, but to also publish my client’s reviews online.

My reviews were very nice, which was gratifying, and for the few years I acted as a Redfin referral partner agent I compiled more good ratings. It was all within their ecosystem, and while it was a tiny bit nerve wracking to wait for the responses, they were all positive.

Enter Zillow.

In late 2010, Zillow announced their own agent review platform, and it was different. Unlike Redfin, which surveyed their own clients’ transactions, Zillow’s reviews would be open to anyone. This concerned me. I wrote in the linked post a worry that the integrity of the reviews could be compromised by competitors and people gaming the system with bogus reviews, among other things.

Well, Zillow did the right thing and ensured that controls would be in place to prevent fraud. And here we are 13 years later and agent reviews are ubiquitous- Zillow, Google my Business, Facebook, and Yelp, to name the most recognizable names. These days we train our agents to get as many reviews as possible. How far we’ve come from the time when 20 reviews was considered a high amount, and my Zillow profile just got my 400th review.

The public now expects reviews for agent just as they do on Amazon products, Uber drivers, or restaurants. Looking back, I think the angst was more about the pain of change than worries that we’d get bad reviews. Real estate is a funny business- anytime transparency is introduced, the address, price or marketing history, and these days the agent commission, people worry that we’ll lose our value proposition. But we’ve never been good gate keepers, and more people use agents to represent them than before the Internet became prominent. The truth has never been our enemy.

Commentary • February 20, 2024

Living Indoors is Not a Fad

by J. Philip Faranda

In some respects, the housing market is like the biggest, longest domino set up in the universe. Chances are, with rare exception like the purchase of an empty house, that the person you are buying your home from is going to be moving somewhere that someone else moved out of, and they in turn are going to move somewhere where someone else is moving from, and so on ad infinitum.

Part of our job as agents as a matter of fact, is coordinating the move out and move in for clients, and it can get a little complex. But the bottom line is when someone does move out of a residential domicile, they are moving into another residential domicile.

Not an igloo.
Not a nomadic wagon caravan.
Not a houseboat.
Not a teepee or wigwam.
And no, they do not begin a new life as an avid camper.

So it amuses me when another agent is taken by surprise that the logistics of my clients relocation might have an affect on their client’s plans. We as agents don’t set closing dates in New York- that is left to the attorneys, lenders and title companies. But I have to have these discussions with my counterpart agents nonetheless. It’s like setting up a lunch date with an old friend.
How’s next Monday?
Oh, Mondays are bad, what does Tuesday look like?
Tuesday is fine with me.
Great! Tuesday it is.

This is not rocket science. But sometimes we make it harder than it has to be.

This text exchange is an example of what I’m talking about. The other agent sent me a text stating that we should be closing in January, to which I replied that we are not, because my clients would not be moving until February. Somehow this caught them offguard.

Bless this agent’s heart. As I’ve said before, it is difficult to explain these things without sounding sarcastic. My clients had a choice: rent their next home or buy something. They chose to rent for the time being. Renting is far less involved than buying, so I’m unclear as to why the fact that they are renting was such a curveball.

Buying • Commentary • Selling • Uncategorized • February 19, 2024

Sale Contingency vs Closing Contingency

by J. Philip Faranda

People live indoors. Its hard to say that without sounding sarcastic, but I am sincere.

It should not come as a surprise to a seller or their listing agent that their purchaser is selling their own home, especially if they are in a higher than average priced property. I shouldn’t have to explain, for example, that the purchaser of a $2 million property (and I count 678 listings in Westchester along active, pending or closed in the last year between $1.75M and $3M) isn’t living with their parents or on a month to month lease of a small apartment. They probably live in a home they own that is less than $2 million (or in the case of the super affluent, downsizing from a $4 million home).

It’s therefore very common for a home buyer to also be selling a home they still own in order to buy their next residence. Sellers shouldn’t be alarmed by this. It’s perfectly understandable for the purchase to be contingent on the sale of the buyer’s home. But the devil is in the details.

There are two distinctions that need to be understood:

Contingent on closing. These buyers have buyer for their home already. If the home isn’t under contract yet it at least has a meeting of the minds with a ready, willing and able buyer. But a signed contract is preferable.
Contingent on the sale. They don’t have a buyer yet. This is not preferable, even in a hot market.

With a closing contingency, there is no uncertainty about the salability or likelihood of closing on the buyers’ property. There’s a buyer. We have a reasonable expectation of success.

With a sale contingency, there is uncertainty. It could take months to find a buyer. It might be overpriced. The buyers might not be truly motivated and have an unrealistic price on their home.

A closing contingency is normal and no big deal.
A sale contingency is not optimal and in many cases downright risky. I would never advise a seller to accept an offer like this unless I had significant assurances that the house the buyers are looking to sell is going to sell. Those assurances could mean that I am, I manage, or I know the listing agent on the contingent home.

Please do bear in mind that this is coming from a broker’s perspective, and that you should consult with your attorney on contractual matters and verbiage, always.

Buying • Company News • Mortgages • Selling • February 18, 2024

Buy Before You Sell Program is Now in New York

by J. Philip Faranda

The conventional wisdom for people with a house they own who want to buy a new home has always been that they sell their current home before they made an offer on a new home because no seller wants a “contingent” deal on their sale. Also known as a Hubbard Clause or a sales contingency, it has always posed a risk for a seller because their sale depends on their buyer finding a buyer of their own. As a listing agent I’ve even had newer agents tell me that once my seller client agrees, their buyer will list their home for sale. Since it’s always been easier to buy than to sell, that seldom worked out.

Times have changed. Many people who might otherwise want to sell don’t, because they have no idea where they will go once they get a buyer for their home. This is common because inventory is so cartoonishly low. Therefore, they want to find something before selling their current home. Given that we are in a strong seller’s market, many sellers are now Ok with this. But the challenge is often that the buyer’s money is tied up in their current home’s equity, and they cannot always even make the earnest money deposit required to secure their purchase.

The solution in some cases is to secure a bridge loan, but that isn’t always a simple or easy process as some clients of mine recently discovered. I’m pleased to share that Howard Hanna and their subsidiary 1st Priority Mortgage have the solution, the Buy Before You Sell program. It allows people to start the purchase of the home they want while it’s still available by tapping into their current home’s equity with a 90 day deferred interest bridge loan.

Here are a few more key points I’ve been furnished with by my colleagues about the Howard Hanna Rand version of the Buy Before You Sell program for Westchester, Putnam and surrounding counties:

Allows the buyer to take Advantage the equity in your current home, now rather than later
Specialized tool for our family – Existing property must be listed with you and will use you to purchase their new home plus use 1^st Priority for their mortgage
Property needs to be in a licensed state
Out of pocket expense less than $400 at time of application; appraisal and credit report
Drive by appraisal only on current home
Low rate of 8% and payment is interest only
Max Term 1year
Payments deferred for 1^st 90 days (interest accumulates)
If loan closes within the first 90 days, we will issue a payoff statement for principal amount along with per diem amount of interest
Existing home to be listed prior to closing with a Howard Hanna agent

Those terms and small print are pretty reasonable and simple. This is for Howard Hanna clients whose home is listed with one of our brands (locally Howard Hanna Rand in Westchester and Hudson Valley or Howard Hanna Coach out on Long Island) and is through 1st Priority Mortgage. I’m a fan of this program; so many people out there would love to sell, but they simply don’t know where they can go! Since moving is a big enough project to begin with, a short term rental or just uncertainty of the next destination or not viable options. This takes the uncertainty out of the equation.

The loan officers who I’ve worked with at 1st Priority are industry veterans whom I have known and respected as professionals for many years. It’s always a pleasure to work with them and my clients have always been in good hands. They also do a great job at keeping our agents informed on the mortgage market, which is incredibly helpful.

If you are thinking of selling but concerned that you aren’t sure where you’ll go, this is a program worth looking into. Call me at 914.450.8883 and I can walk you through it.

New York’s New Property Condition Disclosure Statement

Bonnie Meadow Rd, AKA Dick Van Dyke Show Way

What’s Up With All Those “We Will Pay You Cash for Your House” Signs on Street Corners?

What $705,000 Will Buy You in Ossining

It’s February in New York, so Let’s Talk Swimming Pools

Price Changes Are No Longer Guesswork

How Online Reviews Have Impacted Real Estate Agents

Living Indoors is Not a Fad

Sale Contingency vs Closing Contingency

Buy Before You Sell Program is Now in New York

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