cd=400,000. Roman Numerals. 

I have posted on each of my millennial milestones, and with each marker I am more humbled by the impact on my business than the point total. What a trip. 

I discovered Active Rain while researching a scam out of Colorado. I created a profile and little else for about a year. I began blogging in earnest in December of 2008, but by the summer of 2009 my activity began to tail off as the local market tanked and I devoted time to chasing deals. Around that time I met the late legendary Joe Ferrara at the Lucky Striker Social Media Club, and it inspired me to resume more writing. When I spent some quality time with him again at Triple Play in Atlantic City in December, he gave me the thumbs up, which was incredibly gratifying. I never stopped after that. 

Whenever I got a call from a reporter or a referral I’d post on it, but as the points piled up and time went on I tailed off on that practice, not because it doesn’t happen, but because it could consume the content, and the blog isn’t about me. But suffice to say that I have one deal in contract where my first contact with the client had her tell me that an entry I made was as if I were reading her mind, a fact checker called 2 days ago to verify information I gave a reporter on a story to be published soon, and there are probably another half dozen deals in process (under contract) right now that I can attribute to blogging. 

So for me, it is not about the points, features or accolades. It is about business. If you see my cheesy grin on the dashboard that’s me working to feed the kids. According to MLS statistics, I am ranked 18th out of 7,258 agents for closed transactions in 2010, which puts me in the top quarter of the top 1% of a brutally competitive suburban New York market. A huge amount of that business has been either directly sourced or greatly aided by my blogging.

So, if you are new to this Active Rain thing, or just less active than you think you could be and looking for a reason to get inspired, consider this: I started out ranked 8000th in my state the same way you did. I get no shows. I have buyer clients disappear and post their new house on Facebook with a congratulations message from some other agent. I have sellers refuse to price right, clean up, or honor appointments. I get snooty phone calls from unconnected agents who figure I am a nobody because I’m not big in their town. But I am on here consistently, and even when I have nothing to say (rare, I admit), I read. I comment. I post market stats. One day at a time, I build. And two short years later, yes, I have lots of points, but more importantly, thanks to this platform, I am doing business. 

I will at a future point post on another enormous benefit of being here, and that is the relationships I have made with good people all over who mean a great deal. I could write a book on that one too. 

Not long ago, I decided to create a new website for a specific niche I wanted to focus upon, and an idea for a new website was born. It is currently under construction, and the need of a good logo arose. There is only so much a busy guy like myself can do with Windows Paint, and between the dearth of time and inclination to not drop a mint on hiring someone, a vague recollection of the last New York Raincamp (thanks you, Google Documents) had me check out Logotournament.com. 

Logo Tournament is awesome. Here’s how it works: You pay at least $250, explain what you want, and then pick from ideas that the designers on the site offer. You start by providing details in their “logo brief” process about the logo you seek, such as color scheme, theme, tone and layout, and then you rank the submissions, which often start after only a few hours. The whole thing is genius. I had my first submission in about 3 hours, and with 67 hours left in my 5 day “contest” I now have 69 logos to choose from. 

It gets better. You can search the designers, see their work in any industry you specify, and invite submissions based on those you think could help, and even give feedback on what they offer. You can search current public contests (some are private). You can search designers. You can search by industry. You can not search at all and let the submissions come on their own. I sought out some good real estate designers and got them to submit. 

Once a submission from a designer is made, you can make comments, feedback and suggestions. You rank the submissions so designers can see what you prefer, and when a winner is chosen at the end (contests run from 5-7 days) you own the logo. I bid $350 on mine to try and attract a higher caliber of design, and I even saw some higher bids. But where can you get a professional logo for 10 times that amount? I am getting really quality submissions from Asia, the US, Europe and Canada. 

Given the price I may give the company logo a face lift, and there are other possibilities. Agents can make their own logo. Teams can create their symbol and tagline. You might have a side business that is a logo and good WordPress site away from having a more professional presence. The mind boggles. The wallet doesn’t. 

My Saab story has a happy ending. My last car was a beige 1996 Saab 900 that I drove for many, many miles. It was a 5 speed with a huge trunk and groovy windows. I loved that car. I was driving on route 6 to a showing in Orange County midway between Bear Mountain and Monroe when the thing just died. Kaboom. Whimper whimper. Stop. I reached my buyer on their cell in the hope that they could pick me up en route. They went a different en route. I was en screwed. 

A parkway cop stopped and said he’d call for help. He was sorry about my lost opportunity to make a sale, but that’s baseball. He told me to expect a call from the tow company any time. Off he went, and while my car couldn’t race my mind sure did. What to do? I needed a ride. These people were stoked about seeing this house.

This is where friends and teammates come in. I called one of my agents, Tom Ricapito, and told him of my plight. Tom was relaxing at home with his brother, who was home from college on Las Vegas, but drove out to Orange County to collect me. He took me to the house and waited with his brother while I showed my people through. They decided to make an offer. We parted company with the clients, and Tom deposited me back at the car.

After I waited what seemed like an hour, my police officer friend appeared again and asked if I had gotten a call from the tow truck. No, I said, I hadn’t. He said he’d call them again and apologized for the wait. I shrugged my shoulders. “Actually,” I said “I got a ride from a friend and I sold a house, then just got dropped off again.” 

“HA! Sure you did,” my cop buddy said. Then he asked for my card and said he’d make sure a tow truck called ASAP, which they did. I don’t blame him for not believing me, because 3 years later it’s hard to believe it myself.

But Tom was there, and he can vouch.  And the deal closed!

OK, perhaps I’m being a tad dramatic, but this is a plea to all you anxious home sellers out there: Stop declining showings. I have been on both sides of this today, and in both cases the cost of the declined showing outweighed any benefit the seller might have perceived in passing on the appointment.  

On the buying side: I drove all the way out to Stamford, CT to work with buyers I have been with since the spring. Two deals have died, although one of them was on the seller’s side. We had three homes to show, and gained entry to only one. The evening ended with us in a darkened front yard, in a light rain, in the cold, wondering why I got a text message cancelling the appointment. My buyers were frustrated, and wondered aloud if the sellers wanted to sell. I have eager, pre-approved buyers standing in the rain outside a darkened house in this shit economy with sellers not allowing us access. 

On the selling side: Several of my seller clients are understandably anxious. We often speak of open houses, pricing, nearby sales activity, competing listings, strategy, and all the other nuances of adding honey to our marketing to attract the buzz of a buyer. And no fewer than two of my sellers declined showings today. There wasn’t enough notice. The place is a mess. It’s a bad time. My dog ate it. I didn’t inhale. I don’t dispute that selling your home is WAY DIFFERENT than living there, and showings are inconvenient, uncomfortable and troublesome at times, but honestly, unless there is a steaming pile of dragon dung in your living room you really need to assume the sale the way a good salesperson does and open that door. 

I have said before that outside of a wedding or a funeral in your living room, you need to allow showings to proceed. I have sold houses when we walked past guests from out of town, college students crashed all over the floor on semester break, and barking, foaming at the mouth dogs. I still sold them. Because if it feels like home, they buy. And if people are putting on warm coats and galoshes in November a week before Thanksgiving to look at your home, they are probably serious. 

Let them in. Buyers are too rare to squander over convenience or discomfort about the housekeeping. 

PS We can talk about no-show buyers next week. 

CNNMoney has published a piece entitled It Doesn’t Pay to Remodel Your Home. Overall, I couldn’t agree more, and I have banged this drum for a while. Am I against home remodeling? Of course not. I am against the expectation that you’ll cash out handsomely in the current economy. One of the toughest jobs I have had the past few years is convincing home sellers that their improvements did not raise the value of their home, and that their value often declined.

For example, if the going rate for a raised ranch in a given market area is $450,000 and someone bought their home in 2003 for $425,000 and put $75,000 in improvements, they simply won’t get $500,000. Why? Because the buying public is skimming the cream off the top, and the homes that sold for $450,000 are by and large well matched to their place. Many improvements don’t raise value as much as they shorten market time. Equally priced homes will see the nicer one sell first. The article has a useful chart on the dollar for dollar return on improvements, and the top upgrade, cement fiber siding, only paid back 80 cents on the dollar.

In the example sited, the return on the improvements was only 33 cents on the dollar. The reason? The property the home rests on lost value for most of their ownership. Improvements seldom to never outrun property value declines. In the rock/paper/scissors of real estate, land value trumps everything. This is especially the case in fully developed New York, where land is scarce and land values are so relatively high. If the land goes down 20%, there is no improvement upon that land that can reverse the tide. As a result, many sellers who poured a ton of money into their home are understandably depressed.  

Should people shun improvements? Not necessarily, no. If you have a 1962 kitchen, upgrade if you want. Just don’t expect to cash out as a result, and don’t splurge on every upsell thinking it will pay you back. It won’t for a long time, probably when styles have changed. The same goes for new roofs, furnaces, and other mechanical improvements, because buyers already expect roofs that don’t leak and furnaces that heat for their consumer dollar.

The idea is more in expectations. As I blogged recently about master bedrooms becoming absurdly opulant, improve your home for your quality of life, hopefully with an eye toward resale. But don’t expect the prospective buyers to appreciate your personalized amenities with their checkbook. In the current economy, dollar for dollar return on investment is negative until values get bullish again.   

Making an offer in New York is different from most parts of the country because purchase and sale contracts are not prepared by agents, but by attorneys after agreement and inspections. Therefore, offers vary from nice clean memos with clear terms on company letterhead to a phone call. Memos are great. Emails are OK. Phone calls are hated. Our typical seller client will not render a decision until all terms have been put in writing and a pre approval is furnished. There is no sense in disclosing an accepted offer and possibly scaring a good buyer away if the current “buyer” ends up not being able to buy a week or month down the road. 

For a purchase, therefore, a pre approval is a must to accompany an offer. For a rental, a completed application and summary page of a credit report is also absolutely necessary. When an agent representing a buyer or tenant can’t grasp these rather basic requirements, I’ll reach out to their broker or manager. It isn’t a big deal, or a tattle tale kind of thing. I would want to know if I needed to guide one of my agents, frankly, rather than have them flail in the wind. I am, after all, liable for everything they do. And I do get a piece of the commission they’ll bring in. I owe them some value and guidance. 

So, most of the time I get a big thank you from my colleague broker or manager, and things get handled. Recently, I called a colleague broker and he seemed less than interested to know the details. I don’t know if he was in the middle of something or just not into it, but he asked me to email what I wanted and he’d take care of it. The agent called me later, not angry, but disappointed that I spoke with the broker. I was assured I could have gone to him and explained things. 

Well, that’s just the thing. It is not my job to take the time to explain to another broker’s agent how to do their work. As a matter of fact, I doubt my clients would really appreciate my time going there either. My job is not to teach or train my competition, and if the broker is presumably taking a 30-50% chunk of the fee, he ought to be bringing some value to the table. If that move is perceived as getting them in trouble with their broker, they might want to change brokers. If an agent isn’t clear on how to do things, I blame their broker before I blame the agent. It is the broker’s responsibility to have their agents in the field operating competently. Brokers who can’t live with that fact will have a best friend called “attrition.” 

I read the events in the local paper and my jaw keeps dropping. 

Two 13 year old boys in Chappaqua had their bake sale stand shut down for not having a permit. The police officers who had to stop the little venture were very polite, but the parents were incensed, and eventually the local paper filed a Freedom of Information Law (FOIL) request to find the complainant and it was actually a town councilman. 

The councilman, Michael Wolfensohn, said he called the cops because he essentially didn’t feel he could handle the situation himself. The press the case has now attracted has yielded the local politician some rather unwelcome attention, and he has admitted that he could have done things better in hindsight. The story has gotten legs, and he has gotten angry and threatening calls and emails. Sad. 

“In hindsight, maybe I should have done that <approach them himself-JPF>, but I wasn’t sure if I was allowed to do that,” he said. “The police are trained to deal with these sorts of issues.”

For me, the moral of the story is that engaging in commerce in this modern age, especially in New York, is not easy. There is always someone around the corner ready to take you down, invoking some arcane minutiae of the law or perceived shortcoming. In the case of these two young men, an innocent effort was scuttled and I hope they do not lose heart. 

I think the councilman has regrets too, but frankly, if he were in my town I’d vote him out. I don’t have faith in the judgment of a person who feels the police are the best way to handle two 13-year olds selling cookies and brownies. We don’t need the blind leading the blind around here. 

If it is this hard to sell brownies in this environment, imagine the challenges facing those selling homes. 

What Can You Buy in Hartsdale for $150,000? 

$150,000 will get you a very cute 1 bedroom co op apartment in a pre war building like one we just closed on last week.  with hardwood floors, a huge living room, a dining room, and a kitchen with a…wait for it…dishwasher. It is a junior 4 penthouse on the top floor of the building with a terrace and lovely view of the wooded grounds. There is a free van to the nearby Hartsdale Metro North train station on the Harlem Line, storage, and plenty of closets.

The complex is walking distance to Central Park Avenue,  downtown Hartsdale, and plenty of food and shopping. 

Not bad for $150,000 in southern Westchester County! 

After two similar discussions the past week, it would be wise to address how a short sale should be priced. After all, if the offer submitted to the lender is subject to approval and therefore not a certainty, all the more that the asking price is also a hypothesis.

It is. But, as educated guesses go, a good short sale broker’s list price is pretty educated. It takes into account comparable sales, competing listings, and, sometimes, the gut sense of a seasoned professional. You have to skate a nuanced line in some cases between what will get the phone to ring and what the lender will sign off on.

I have blogged before on the stress that a short sale can put on a home seller. They are typically in default, getting collection calls and letters from the bank, facing the steps up to a foreclosure, and often overwhelmed with distress. When one is under stress, it is natural to instinctively move to eliminate the source of the stress, so often sellers want to lower the price to get moving, and dramatically so. The problem is that if you lower the price to be the lowest asking price the neighborhood has seen in 5 years, you can foster too much skepticism from the lender and  the offers you get might not be enough for the bank accept.

For example, if comparable sales put your homes estimated value at $400,000, it is irresponsible to whack the price to $320,000 just to get an offer and be done with it. You have to balance between what the buying public will respond to and what the lender will accept. And few homes sell in 10 or 20 days. It takes some time. Not all short sales tale a long time to find a buyer,  but some can, and too many reductions too soon can sabotage your efforts.

The best (and really only) approach is to price the home aggressively based on comparable sales, and then review and reduce every 30 days unless market activity indicates something faster. But it is market activity, and not nerves or stress, that should source the price strategy.