Terms are often overlooked because people are so preoccupied with price in this economy. However, they are, in many cases, just as important as price. I often have buyers question what difference the size of their down payment makes to the seller, since the money is just as green if it comes from the lender is it did their bank account. In a zero sum world, this is true. But context is important, and there is an immutable law that cannot be avoided:

Guarantees cost money. Certainty costs money. 

If you are going to put 20% or more down on a house, your lender will not require you to pay for mortgage insurance (PMI). If you put less than 20% down, PMI is required. PMI hedges the bank’s bet that the loan will perform. But it is more than that- the bigger the down payment, the more likely the loan will get approved. The reason for this is simple: the less value of the home is borrowed, the more likely the borrower will repay. Therefore, a low LTV (Loan to Value) is attractive to loan underwriters. The lower the LTV, the lower the risk. 

So the size of the down payment will determine the peace of mind of the seller and their confidence that they are dealing with a qualified buyer. The ultimate down payment is 100% down. From there certainty erodes. So if you are buying a home in Westchester or the surrounding counties with 3.5% down, you ought not balk if the seller is concerned. Selling a home is tough these days, and it would be tragic to have a house off the market under contract for 60 days only to have the deal fall through. Big down down payment deals seldom fall through. 

I am a big fan of FHA mortgages, not because they are common in Westchester, but because I did dozens of them in Rochester. However, until recently, FHA mortgages in Westchester County were as rare as hens teeth because the FHA loan limit was so low there were few Westchester homes that were eligible. With the changes to FHA loan limits and the fall of prices, they have become common, but agents and sellers alike are still not yet used to them. I have seen sellers take a deal 5 or 10 thousand less because of the larger down payment. Again, certainty costs money. So if you are going FHA on a Westchester County home, keep that in mind when you are formulating your offer. Terms matter, and down payment is a big factor. 

Peekskill, NY now has a wonderful Dog Park! Opened October 31, 2009, the project was started by Peekskill homeowner (and dog owner) Michael Sellers, who devoted a year and a half to getting the city to dedicate unused park land to the project. The park now has a board of directors, a terrific website with plenty of pictures, and 50 visitors a week. It has also made the local news several times, including Journal News coverage of a visit from Santa Claus just 10 days ago (and you thought he just dug reindeer). You can read the story by clicking on the link on the park website.  

To take underused parkland and transform it into a place where people and enjoy themselves and build a community is a special undertaking, but then again, you have to know Mr. Sellers like I know him. I sold him his house in Peekskill 3 years ago. As fortunate as he told me he feels about putting down roots in Peekskill, I say that the city got the better part of the deal when it landed Michael Sellers. Hats off to my client and friend. 

My dog Max would approve!

If this isn’t protocol already, it should be. If you are an agent with a buyer interested in a listing, by far the best way to get their questions answered is to email the listing agent. There are many reasons to do this, not the least of which is that you’ll get answers in writing, but why would you ever feel that you’ll get a more accurate answer from a harried, preoccupied agent in the car en route to an appointment who clicks you through on call waiting than emailing them than having someone get you answers in writing, straight from the file? 

Some of these calls catch me at an awful time, and, with 35-50 listings to service and a brokerage to run, if I don’t have a file in front of me in the car, I’m going to ask you to email me. If I got 2-3 questions on every listing today, that would be 70-150 requested answers with my liability hanging in the balance each time. I don’t like those odds, and I don’t want to be inaccurate either. Do I get that many questions a day? No, frankly. But 20-30 questions? You bet. 

Consider the advantages:

• You get the answer in writing;
• You don’t get answers piecemeal;
• Email is permanent and is a paper trail of you doing your client’s due diligence;
• Email doesn’t forget;
• Email covers your rear end. 

I grew up in Ossining and still reside in the Ossining school district. Ossining is the fictional home of the Draper Family from the AMC Series Mad Men, and is also home of both Sing Sing Prison (the origin of the phrase “up the river” from the old gangster movies) and Maryknoll Catholic Mission. It is about 35 miles north of Mid Town Manhattan, and beat Houston, TX to the punch by electing an openly gay mayor several years ago. It was a wonderful place to grow up and I am proud to call it home. 

70 homes sold in the village thus far in 2009, compared to 78 during the same time period in 2008. Prices are also down, with the median price of $387,000 in 2009 compared to $416,000 in 2008. 

Overall, $387,000 is down considerably from the 2005 median peak of $443,000. There are 64 active listings now, putting the current inventory of homes at about 11 months worth of available properties. Given the quality of life you can enjoy here, with prices this low Ossining is probably one of the best bargains in Westchester County going in to 2010. 

I have blogged about Croton on Hudson previously. Croton is a beautiful river village just about an hour north of Manhattan by train, and is a popular commuting point. I spent much of my youth there, as my older brother and his family have resided there since about 1980. 

Of the 42 single homes sales this year, the price breakdown is below. My data source is the Westchester-Putnam MLS. 

There are no surprises here. If you want a decent place for under half a million, Croton is a fantastic choice. It has upscale homes also, but overall sales are down for 2009. The market started slow in the village, and thus far this year only 42 homes have sold. In 2008, by comparison, 68 homes sold during the same time period. At the peak in 2005 the number was 85, so sales by transaction total are down 50% from the peak.

There are 52 homes on the market as I write this, so we have over a year’s worth of inventory available. Given the fact that available inventory is at it’s lowest ebb in December, that could swell up to well over 70 after the holidays. One good piece of news is that the median home value of $455,650 is down only about 10% from the 2005 peak of $510,000. That speaks well of the village, but speaking well of Croton comes easy to me. 

I suppose I should have blogged earlier about an article published last month, but when the subject property has been vacant since 1966 it seems only right. IN my experience, the most enigmatic downtown area in all of Westchester County is that of my own hometown of Ossining, NY. It has been punctuated by old, derelict and vacant buildings since before I was born, and no local administration has been able to make a difference. 

However, this story in the Times gives me some hope. The old Ossining National Bank building, vacant since 1966, is being converted into condominiums and retail. Given the historic nature of the building and the restrictions on its renovation, it was problematic to complete work on. 43 years hard, I guess. One wonders how every single other downtown in affluent Westchester County is able to pull it off when Ossining could not.

Still, I welcome the development and hope that it is the start of more improvements to a once proud downtown in a village that is close to my heart.  

From today’s NY Times:

Houston is the Largest City to Elect an Openly Gay Mayor

My hometown of Ossining (pop: 29,000) also has an openly gay mayor and was one of the first municipalities to elect one. This is a tremendous step forward for everyone, gay and straight, as we progress toward a better, hate-free world. 

The margin of victory at press time was 53%-47% and given the demographics of Houston, Mayor-elect Annise Parker got votes from all populations- white, male, straight, and everywhere else. 

So congratulations to Mayor-elect Parker and her constituents from this Catholic (albeit heretical), white straight male in New York. 

After 3 days away this week there is nothing like being back home. My kids, my wife, my dog. Ann’s chicken thingies with the bread crumbs. Yummy. Last night was the first really cold night of the season, so I lit a good fire. 

I have to say that my fireplace is one of my favorite things in my home. There is no place on Earth, no amenity elsewhere, no 5-Star hotel that is as welcoming as my own home and hearth. I fell asleep in the couch with my laptop and that fire cooking with Max, my German Shepherd, sawing wood 5 feet away. 

That contraption you see is a cool system for blowing fire-heated air into the living room. It helps with the heat and keeps us toasty. 

A fireplace was on my “must have” list when Ann and I bought our new home in 2007. I also had to have a basement. I got both. Things like this make me mindful of my clients’ “must have” list when we are out looking. 

Be warm. 

From my humor consultant, Tiffany Pratt:

Question: Why are there so many toxic waste dumps in New Jersey and so many lawyers in New York?

Answer: New Jersey got to pick first. 

I love that one. 

I got the following email today: 

Dear Customer,

This is the reminder note to let you know that your order at <company> is almost two years old.

Your order Reference I.D.# 100-9113361 will be automatically deleted in 10 business days. We want to let you know in case you plan to re-order a product with this design:

If you would like to re-order now you can save 20% on your purchase. Click here or copy and paste the link at the bottom of this email.

Until I saw the image, I thought the email was spam. Then, I remembered that we actually used these sheets for notes when buyers would call on listings. Buyers seldom call anymore, though. There is far less a need to handwrite notes on their preferences and criteria. Bad news? 

Not really. Buyers are emailing and filling out online forms with their data now. We no longer take dictation because the information is now online in the data the prospective buyers submit. Some of it is sparse, to be sure, but who didn’t get phone calls that were just as close to the vest? It wasn’t too long ago I was living off of post-it notes and carbon paper messages.  

Clearly, the business has changed. That is good on a variety of levels. When it is online, the data is hard to lose under the car seat. It uses less paper. We can simply forward it to the company agent we refer to. We use a Gmail platform, so organizing and tracking the inquiries distributed to the agents is streamlined.

Everybody wins. Well, everybody except the printer. 

The Good Faith Estimate (GFE) is among the most important documents in your life in my view. When you apply for a mortgage, you have to, by law, be given one, and it is aptly named- it is an estimate of the costs associated with your mortgage, itemized and estimated, deemed in good faith to be accurate. These costs include closing costs, bank fees, escrows, and every penny you’ll need at closing.

If, for some reason, there is a significant change in your costs as your mortgage process goes forward, you should be given a revised GFE. There should be no surprises at the closing table, and you should never be subject to a last minute scramble in the days prior to closing because the initial estimate was too low.

The bait and switch occurs when costs change so late into the process that the borrower is forced into choosing between possibly losing a deal or being coerced (extorted) into paying higher fees because they can’t switch lenders.

Just yesterday, a scheduled closing on a buyer client of mine was adjourned because the lender told the buyer that his costs would be $17,000 higher than initially represented at his application. I’m not accusing anyone of a bait and switch, as the reasons given included a far higher tax bill than anticipated and higher title fees. But $17,000 is an absurdly high amount of money to fail to account, and someone dropping the ball big time. If it isn’t clear already, the client found this lender on his own and we had no reason to be concerned thus far.

My advice to the client was to get out his GFE and see where they went wrong. I want to see it. New York is a high cost market with expensive fees for sure, but you don’t overlook 17k and then find it the day of closing without serious fraud or incompetence.

The answer, my friend, may not be blowing in the wind, but it sure is in the Good Faith Estimate.

Let me preface my remarks by stating that when I act as a buyer agent I truly enjoy negotiating the best deal I can for my buyers. But make no mistake; we make a deal. I’ll explain after I list a few examples of what I don’t mean:

• On a $450,000 listing, an offer of $400,000 comes in with a remark on the cover sheet: “Buyer is unable to be very negotiable with this offer.”
• On another listing, the buyer agent tells us that their buyer has been looking for a home for 2 years. 2 years. After I get the seller to accept their offer, the buyer walks. We took too long.
• In a multiple bid situation, we ask each party to make their highest and best offer. One party withdraws, not wanting to get into a bidding war.
• In about a half dozen aborted deals in the past 3 months, I have been told by either the buyer or their agent that they are looking at homes they do not qualify for and that they just make 80-85% offers because they want to steal something.

None of the buyers in the above examples bought anything! All they did was go from property to property bullying and posturing, and they still live in their in-law’s basement. And with an $8,000 tax credit, insanely low rates, prices down to 2003 and 2004 levels in some places (and lower), and sellers willing to do more to cut a deal than they have in years, if you still live in that basement apartment, you missed out. It takes a special kind of obtuse to be a buyer in a market where so much is done to help you, and still not actually buying anything in multiple attempts. My advice? Go to the corner store and buy some gum. Prime that spending pump. Then work your way up.

A buyer’s market gives buyers an advantage. Buyers are getting better deals now than they have in the past 20 years. To take advantage of it, however, the buyers actually have to BUY SOMETHING. Beating the crap out of a seller and then walking away because they didn’t throw in their 17 year old daughter is not making a purchase, it is being a serial haggler. Now, some seller’s are unreasonable. But if you are on your 3rd offer, it probably isn’t the seller.

It isn’t a “haggler’s market.” You have to be a buyer to take advantage of a buyer’s market. To be a buyer, you must actually buy something. Otherwise, all these incentives and advantages are just words on paper. I’ll tell you what isn’t words on paper- living with your mother in law.  

Two weeks ago a colleague asked me about Triple Play. I had no idea what he was talking about. Triple Play, he explained, is a convention put on jointly for NAR members from Pennsylvania, New Jersey, and New York, held in Atlantic City. I’m not a big convention guy, but I checked it out. The events were pretty interesting, with continuing ed, speakers, a large exhibition, and receptions in the evening.

So here I am, on my laptop, choosing whether I want to hear the Mobile technologyspeaker or the guy on connecting with online consumers. I arrived late yesterday and caught up with some colleagues I seldom get a chance to hang with. We attended the New York reception, then had dinner at Caesar’s. I really enjoyed that, I have to tell you.

This will have to qualify as my vacation for 2009.

In 2010 Ann and I come together.

I’m not the first to lament what stupid things some agents do to tarnish our profession. Incompetence, malfeasance, shoddy standards and putting their own needs ahead of the client’s have been well documented. It isn’t much fun being the first licensee the person speaks with after a bad experience with their last agent. 

Earlier this evening I met with a home owner who had just ended a 6 month listing contract with another broker. His experiences made me sad, to say the least. The curious thing was how a well priced, beautiful home like his could have expired unsold. The answer was that it WAS sold, but the deal died after he’d been in contract for 2 months. The instances of poor brokering and bad advice just kept piling up as he explained. 

• After he accepted an offer on the home, someone knocked on his door with a $30,000 check. They had been trying to reach his agent but couldn’t get a call back. They wanted to buy the home. His broker never returned their call. So, in desperation the buyer knocked on his door. It was too late, as contracts had been signed not long before. 
• The buyer’s downpayment with the signed contract was half what they agreed. His agent told him that they shouldn’t worry over such a detail, as it would close in 45 days anyway. 
• The buyer applied for an FHA loan, but the contract forbade that sort of financing, because it was a condo in a complex without FHA approval. 
• The buyer pumped the contract price up $20,000 to finance a seller concession without disclosing their need for a concession in the beginning. His agent told him not to sweat this, and that it would close quickly. 
• The house under appraised. When the seller’s attorney demanded proof, it was found to have appraised out just fine, 
• The buyer was turned down for a loan after the house had been off the market and under contract for the previous 2 months. 
• Given the bad faith displayed by the buyer, the seller decided not to release their downpayment. His agent screamed that he could not do so. The seller wondered aloud who the listing broker worked for. I don’t blame him, nor does his attorney. 
• When the discussion of extending the expired listing came up, the seller wanted to renegotiate the commission. The broker told him to take it or leave it. 

10 McDougal Lane in Cortlandt Manor closed Friday, December 4. I listed it September 5, we had 2 offers by mid October, and it went under contract  10/31. The buyers went FHA, so it was a little bit of a wait from there. This is not to pat myself on the back, but rather to pat the seller on the back. 

Every so often, a seller “gets it.” They are eager to know what I know, and they follow my recommendations as best they can, often to the letter. And guess what? They get what they want. Case in point: There was a home very similar to our listing that was priced in the low 300’s for quite a while. It looked like the same house on a nearby street and the builder and architect were probably the same guys.  After some time, that other listing cancelled at $309,000. 

My view was that if we priced at 299,000, we’d get more and better eyeballs on our place. And even though the economy was crummy and the autumn was less than ideal, we averaged a showing every 2.5 days until we got our accepted offer and the thing got put to bed in early December. Price points matter, and my client saw what I saw. We collaborated well as a team, handled the negotiations and inspection issues like soldiers and now the guy can have a Christmas without the old house to worry about. My hat is off to him. 

It goes without saying that there are dozens of homes in that zip code that were for sale when John’s house went up for sale that remain unsold. The moral of the story? Find the right broker (like, for instance, ME), take their coaching, and be a team. 

I have been on both sides of an offer in multiple offer situations. Whether I am the listing agent or buyer agent I often see buyers view the news of multiple offers with incredulity. More often than not, they just don’t believe it. If they think that the news is just a trick to get them to raise their offer and they hold firm, they often lose the house. 

While I don’t dispute the existence of dishonest licensees who fabricate competing offers, in my experience the overwhelming majority of multiple bid situations are legitimate. There are two main reasons for this:

1. If you like a well priced, well cared for, updated house in a good location, then the chances of someone else liking it are fairly high. The notion that a buyer’s market is devoid of anyone actively looking but you is inaccurate. This is still the USA. There are still people looking to buy a home. 
2. The consequences of fabricating a false competing offer are catastrophic. Suppose the agent lied about another offer to get you to raise your bid and it backfired-instead of raising your offer, you instead withdraw it. That agent just lost their commission, and will look pretty silly when the house never goes under contract in the MLS. Few listing agents would risk losing their entire commission and reputation when a solid sale is within their grasp. Moreover, if the seller found out, they could rightly get the agent in huge trouble with the law and real estate board. It makes no sense to take that risk, even if you don’t have scruples. 

After a mild autumn, a light snowfall has covered Westchester County. Like most of Westchester, Briarcliff is already quite pretty, so seeing it covered with snow adds to the beauty. We have friends in from out of town, so it is actually kind of idyllic. Kevin Crego, my old college roomie at Villanova just arrived (and apparently brought the snow from Rochester), and we’ve already had Mike Brophy since yesterday. 

Typical day with a friend from out of town- Mike rode shotgun with me this morning while I showed some clients co op apartments. 

Kevin taught me the real estate business and is Luke’s godfather. Mike was the best man at my wedding and is godfather to Catherine. Both live far away, so visits like this are rare. Kevin runs a brokerage in Rochester, while Mike lives in Texas. The photo doesn’t do the view justice- it as if everything outside were covered in crystal while we enjoy the warmth of catching up with dear friends indoors.

This was a video taken at my house after Thanksgiving dinner (and before dessert) by my older brother Tom. Clearly, my children have mastered the art of saying “cheese” when they see a camera. The oldest of our 4, Luke, makes only a brief appearance for some reason because he was preoccupied with some project. The older 2 are my nephews Joe and Tim, and my mother, Sister in law Brigid, and Ann round out the cast (oh, and Max, our rescued German Shepherd who, as nearly 2, is still a pup).

2 year old Mark seems like triplets at times, but it is all the same little guy. That extra couch next to the piano has been there for months. We still have to figure out what we want to do with it. That’s life!