I will be the first to say that staging is important. A home should be tidy, well-kept, and laid out in an sensible way. There are lots of simple things people can do to raise their appeal- scented candles, clearing off kitchen counters, removing unneeded furniture, and TURNING ON THE LIGHTS (pet peeve of mine. Hard to show a dark house). Appearances and first impressions matter.

All that said, some agents take it a little too far. While holding a house open today I noticed that some walls were bare, with nails sticking out. I recalled a passing remark my client made about her old listing agent telling her to take down the family pictures so that buyers would have an easier time envisioning it as “their” house. This agent had the listing for a year and couldn’t get the job done. Why were they taking her (ahem) psycho-babble advice?

Some people overdo it; we’ve all walked through homes where the sellers have their mugs in every room, Mom’s portrait above the fireplace, and a family pictures everywhere as if they are afraid that they’ll forget what each other look like. Real vanity. This isn’t that kind of home. We aren’t talking 40 photos, we are talking 5 or 6.

Nothing sells like a happy home. And if a few tasteful wedding portraits and family photos are bad staging, we had better build an ark.

The stereotypical view of people who face foreclosure is that they are irresponsible or unintelligent. But sometimes, they are good, intelligent professionals who have had bad things happen. My own older brother, a Cornell alum, lost his house in the early 90’s due to illness.

One couple I listed was in similarly bad circumstances. She was a nurse; he was incapacitated due to an incurable debilitating illness. They were certainly upside down after refinancing 2 years earlier to catch up when health and work issues crippled their finances. One week after they went on the market she told him she had a headache. Those were the last words she ever spoke.

The house was taken off the active market while the family grieved. It was a terrible, unexpected tragedy, and bitterly ironic, since she was the healthy one. Unfortunately, the house was off the market for the earlier summer and when it went back on the sub-prime crisis hit, thinning the herd of buyers and blowing a hole in the confidence of those that remained. Fortunately, that winter we got a buyer.

The loss mitigation process on this file was particularly difficult, because the original lender was insolvent. Then, when the buyer’s lender required a test of the underground oil tank, it failed. We needed to get another $10,000 from the lender to remediate, but that wouldn’t be issued until closing. The buyer agent and I called in ever favor we could from the oil tank company to do the work and get paid at closing. They were understandably reluctant. This closing was not a sure thing. Thanks to the good relationship the buyer agent had with the owner of the firm, the work was competed, allowing the borrower to get their mortgage cleared to close.

Last minute environmental issues, while rare, can send a regular tranaction into a tailspin. You can’t underestimate the havoc they cause in a short sale. Teamwork got this done, and my client was able to open a new chapter in his life and move on as best he could. In a way it was almost like an estate sale as well, because they were taking the last step in burying a loved one.

A young newlywed couple bought the house.

Some transactions stay with you your whole life. This occurred almost 2 years ago and seems like it was last week. The clients lived in Orange County, an exurb of NYC about 40 minutes north of White Plains. They were desperate, and their situation was compelling.

First, they were restoring an older Georgian. Even in an incomplete state, it was a magnificent place. As with many younger couples in the multi-tasking pursuit of making a family, they were also trying to have a baby with little luck. Then, she got pregnant.  Their daughter was born prematurely, and never made it home. Language limps in describing such a tragic event. She became understandably depressed, and then he lost his job.

I met her at the house on a cloudy day. She was back on her feet, physically and mentally, with a fat file filled with research on short sales on the kitchen table. She knew everything I was talking about. She educated herself. Unlike many people with overwhelming financial problems, she was not paralyzed with fear. I’ll explain.

While she was showing me the house, explaining what was completed and not, we came to what was the baby’s room. The poor Little Soul never slept in it. Briefly, she was sad again. She became depressed when she was told she couldn’t have a baby. I am blessed with 4 rugrats- what could I say? Have you thought of adopting, I asked. She looked me right in the eye. “Of course. But they won’t let you adopt if you have a foreclosure.” How dumb of me! Adoption agencies weigh finances very heavily!

And THAT is why she was on her feet, lucid and fighting. She wasn’t fighting to save her credit; she wasn’t fighting for sheetrock and plumbing;  she was fighting for motherhood. She was on her toes for a child who wasn’t even in her life yet, a child who was just an idea.

I am proud to say that there were multiple offers on that house (it was expired with a prior broker who tried to sell at a higher price because they didn’t know short sales). The lender approved the short sale, an offer about $15,000 over asking price as I recall, and it closed successfully. Was it easy? Hell no. Did I care? Hell no.

They mailed me a photo of their daughter later that year. You can’t make this stuff up.

If you’ve ever arrived at a closing and been informed that your commission was being disputed, withheld, or otherwise not being paid, you’ll appreciate New York State’s newly-minted Commission Escrow Act.  It requires the commission money to be deposited in escrow with the county clerk pending resolution. The great thing about this law is the certainty of getting paid when you win your case, as opposed to maybe someday collecting when the money is held by the seller’s attorney.

However, the act is not automatic. Listing agreements have been updated with verbiage to make sure brokers are protected, so contact your broker or MLS to get copies before you list another house.

Forewarned is forearmed! Finally Albany does something right! This law was way overdue.

Picture this: a 3300 square foot brick center hall colonial with lots of upgrades, impeccable furnishings and appointments, beautiful decor and furniture, located in a swanky suburb. When I arrived to show it to my buyers, we see a crummy space heater in the dining room, 10 feet from an heirloom chandelier. What are these people thinking? A house like this is selling a lifestyle, so why are the people too cheap to turn up the heat for 15 minutes to get their house sold? What a colossal waste.

If a home is being shown that day, people need to dispense with the space heaters, turn on the lights (don’t make me grope around in the dark), and get lost. Your utility bill will be $50 higher that month but your home will sell for more money, faster.

Another showing later that afternoon, same buyer clients: the co-listing agents meet us, and “double team” my buyers. He’s got the husband engaged in the den, talking about God Knows What, she’s got the wife in the master bedroom blathering about the closets. My showing. My clients. They either saw me glaring or realized on their own that this was too much because they backed off a minute later. This was the worst case of divide and conquer I have seen in ages; what made it worse was a reference one of them made to my client that they had spoken on the phone once a long while ago.  

I should note that both of these listings were nightmares to get scheduled. I blogged about them last week when I wrote Unseen= Unsold. This business isn’t rocket science, folks. A little common sense goes a long way. Turn on the lights. Ditch the space heater. Don’t elbow in on another agent’s buyer clients. We don’t split atoms. It shouldn’t be this hard.  

Here in New York, Today is the day that the Coney Island Polar Bear Club (or, as my late father referred to them “those idiots”) have their annual winter dunk at the beach. They actually do this crazy thing once a week, but they get all their publicity (and presumably, do most of their recruiting) today.

I really don’t know what sort of bet I’d have to lose to do this sort of thing. I categorize swimming in frigid water on a 15 degree day along with skydiving, streaking, or running a marathon. I just don’t have the guts. I’d rather speak in front of 50,000 people.

Still, God bless them. They pay their taxes and charity does benefit from their efforts.

By the way, if you, like I always thought it was just old crazy guys with too much back hair that do this, you’d be interested to know that many of them are women, and women who look just fine in a bathing suit too.

I have been meaning to post on this for a while. As unpalatable as it is to say, assaults and even murders of agents who unwittingly meet the wrong person in the wrong place do occur. A female agent alone at an open house I ran into recently seemed genuinely glad to see me because a person who had left before I arrived unnerved her. As a broker-owner, I take these concerns seriously. Security knows no gender, but here are a few things that should be done to watch your back.

• Never hold an open house alone, especially if it is off the beaten path. If you are in an apartment or row home area with lots of people nearby, that is one thing. But if literally no one can “hear you scream” you are vulnerable.
• Let others in your office, family or team know where you’ll be, especially when you are meeting someone for the first time. All my appointments are recorded in my outlook.
• Document ahead of time when, where and with whom you are meeting someone, especially if it is a first contact. If I were to go on a listing appointment at an axe murderer’s house, my wife need only check my outlook calender for the name, number and address of the prospect. If I am late, she calls my cell phone to check on me.
• Carry pepper spray or mace. No kidding. They can be on your keychain. Some agents carry a whistle.
• Never leave without that cell phone. If you are at an open house and someone is behaving erratically, call the cops or an associate. Err on the side of caution.
• Casually mention that others know where you are and with whom you are meeting. If you are showing a vacant home, for instance, work it into the conversation. The best thing is to not be alone.
• Never make a blind appointment. Know who you are meeting with and get their information. If someone different shows up, reserve the right to terminate the meeting.
• Insist that people sign in at an open house. We yield too often about this, presumably because we don’t wish to offend. Screw that. Our sign in sheets have a contact opt out box if people just don’t want to be called afterward. But we have too much exposure to liability to not document who is walking through a client’s private home. One broker I know has two agents at all opens, and will not allow people to walk through without holding their driver license. Hey, it is New York. But if you want to enter one of my opens, signing in isn’t optional.

We don’t sit at mahogony desks all day for our work. We are in the field, on the road, and meeting strangers all the time. While the odds of something terrible happening are remote, prevention and caution should give us that ever important peace of mind.  

This might be a sensitive subject to some. However, I feel that my thoughts need to be expressed and our industry should be a leader and not a passive observer. I view gay marriage as an equal housing issue, and therefore something that should be supported by licensees.

The building bloc of society is people coupling up as families. Families buy real estate; single people are more prone to rent. To cut to the chase, legal gay marriage will attract more couples who will buy houses, period. The ripple effect will be considerable, because homeowners pay taxes, buy cars, washing machines, fences, new roofs, lawnmowers, and many other things that circulate money. If gay people wish to couple up and buy houses, we should support that. We should enthusiastically broker those deals. Many of us have already worked with gay clients (whether we knew it or not). But without the legal status that comes with marriage, those numbers will be suppressed.

Some might find it ironic that a straight, relatively conservative Roman Catholic would support gay marriage, but I find it more ironic that millions more of us think gay people are good enough to watch on TV in makeover or redecoration shows but not good enough for us to stick out our necks. Simply put, we should support gay marriage as real estate professionals. I am not on a soapbox advocating radical social change. As a matter of fact, mainstreaming gay marriage is actually a rather fiscally conservative, libertarian notion. To me, its very prohibition is antithetical to freedom and equality.

The United States has long been a nation where legal agreements between consenting people, so long as they do not harm others, should be respected and free from fear. Secular, non-religious covenants should not be offensive to religious precepts. Religion, which seems to be the biggest opponent, does not have to sanction, support or recognize any practice it does not sponsor, but do you ever see nuns picketing a civil wedding, which is also not recognized by the Church? Of course not. The gay things spooks people.

Let me tell you about the gay thing, and if you have a gay friend or loved one you’ll know what I mean.  As a New York agent, home of the original melting pot, I can confidently state that gay people are no more a big deal than you or I. Hollywood has let gay people down. The media, especially the news outlets, has just hammered gay people. Here in North Jersey, an Indian American opened fire in a church and murdered two people. It was news for about a day. Elsewhere, some gay protesters disrupted a  church service and it was in the talkshow fodder for WEEKS. Consequently, you have the uninformed harboring outlandish generalities about gay people. Do we in the 21st century tolerate other stereotypes? Why are gays, then, the last victims of Jim Crow?

 I have never understood how gay people being married hurts the institution of marriage or our nation’s moral fiber. I am not trying to be relativist, either, although I know some straight marriages that don’t exactly edify marriage either. I do know this: since the fall of the iron curtain, Europe, which has far more tolerant attitudes about gays, has experienced unprecedented peace and prosperity. I seriously doubt that gay rights in Europe have undermined the EU’s progress. It has in many ways probably helped.

Most minds will not be changed by my one commentary, and this is not the end justifying the means if your opinion is still not open to allowing gay marriage. If you think the gay lifestyle is immoral, don’t practice it. However, if you think that by assisting gay couples who wish to buy real estate that you are sanctioning immorality, you are skating on very thin ice from an equal housing perspective. Jack Daniel’s whiskey is produced in a dry county. No one views that as hypocritical, nor should they. The same principle applies to our industry and support of gay marriage. It is good for our industry and morally ambiguous to us personally.

If you are undecided or ambivalent, I encourage you to join me in sticking your neck out. Benign neglect is not enough. There is an under-serviced market out there, the service of which is mutually exclusive to puritanical mores. Separate your morality from equality. America is a nation where people who would be mortal enemies abroad engage in amicable and peaceful commerce. And, regardless of our personal prejudices, where there is commerce and prosperity, there is peace and harmony.

It is in our interest to extend a hand to gay and lesbian Americans and vocally offer them our best. I assert that it is best for the nation as a whole as well.

Those of you who have listed and sold homes of divorcing couples will attest to the frequent difficulty of those files. The NY Times has an article on how the slow market is causing the liquidation of marital real estate to be far more difficult in some cases, causing the people to remain living together in some cases. In an acrimonious divorce, this can just perpetuate hell on earth, I am sure.

But what if it isn’t the war of the Roses, and being compelled to live together actually forces people to reconcile their differences? One quote in the Times article from a divorcee stuck with me:

if she had known how little money she would get “I might have stuck with it a little more; I don’t know,” Ms. Tomasko said, adding, “Maybe it would’ve made me think a little harder.”

To be sure, the slower market makes most divorces worse, because it takes the idea of a fast settlement off the table. But for some, it might be the impetus for detente, then negotiation, understanding, and, just maybe, a new beginning. Call me a hopeless romantic, but I’d love to hear a story like that for real.

It is 2008. The government has nationalized the banking industry. We are in a recession, and the real estate market has yet to hit bottom. And there remain sellers out there that don’t realize that if they make seeing their home difficult, the home won’t get sold. In 2004, if it was difficult to get a showing in, we all waited patiently, knowing that when we did see it that there would be other potential buyers right there with us. Today, there are literally dozens of other options. People need to wise up.

Today, a listing agent I have been trying to reach since before Christmas called me back and told me some rather ridiculous parameters for showing her listing, including that it would not be available to show until this coming weekend.

Why, I have to ask, is the house even active on the market? Why isn’t it temporarily withdrawn? After some further discussion, I was told her client is a physician, which apparently grants him a dispensation from the same rules the rest of us must play by.

Our job is to educate our clients, not kiss their caboose just because they are doctors or lawyers. Listing agents who do not instruct their clients how destructive it is to be so difficult in this market are enablers of some very damaging behavior.

Not long ago, the following was written:

“you should be strongly advocating foreclosures – not mitigation or refinance – in your marketplace.”

They stated that foreclosures would restore confidence in the market. I beg to differ. With rare exception, foreclosures hurt everyone and should be avoided at all costs. They harm the borrower, the lender, and even innocent bystanders (unless, of course, you like a vacant, derelict home on your block).

The mitigation he refers to-more commonly known as short sales-are, to my way of thinking, the best way to restore market stability with the least amount of harm to all. My rationale is hard to argue with, by the way, since it is commonly referred to as “math.”

To be sure, a short sale is just that-a short, and in some cases very low- payoff of the home loan. If the bank did not forgive the shortfall, it could yield a deficit of tens of thousands of dollars in many cases. However, it really is the lesser of two evils from the lender’s point of view. The potential loss to the lender would be far worse if they had foreclose, because time is money. Whatever the loss is in a short sale, it would be compounded enormously in a foreclosure scenario.

Here in New York, it typically takes a lender a year to foreclose. The house is then auctioned but most of the time it becomes a non-performing asset on the REO market for at least another 6 months to a year before the lender can recover anything. In the meantime, they have to pay the taxes, manage the property, and the final cost on the REO market is always less than if the home were occupied by the original owner. So you have a double whammy: the house sells for less, and the mathematical loss is larger. But there is also a third hit the lender incurs, and that is the legal costs associated with the repossession.

Therefore, if the loss on a short sale is $50,000, with another 6-12 months of arrearage, 6-12 months of back taxes (which in New York can be astronomical), legal fees, upkeep, winterization, and a final price which is easily 10% lower, and the bank can be in the red another $100,000. Yet many loss mitigators cannot comprehend that.

The borrower isn’t unscathed, but they avoid foreclosure, and that goes a long way in helping them get re-established. They do lose the house, but on more civilized terms. By avoiding the repo man, they are able to get back on their feet sooner, which will aid us all long term. Moreover, they retain their dignity. I know people who have lost their homes and will never buy a home again, not because they cannot, but because they lost their dream. That is a tragedy.

There is also the collateral damage of foreclosures to consider. Let’s suppose you keep your nose clean, borrow less on your home than most, and you have a neighbor who is frantically trying to sell their house at a loss. If they sell the home in a successful short sale, you have seamless transition to a new owner occupant neighbor. If the bank doesn’t cooperate and it goes to REO, you have a derelict house next door. How does that reward your hard work and prudence? Really enhances the neighborhood, huh? And for a good long time, too! How does that restore confidence?

The fastest, least costly means of restoring market stability is to wring the bad loans out via short sales, period. It is better for the accounting department, better for the borrowers, better for the neighbors, and far faster and cheaper than more foreclosures. We should all be pressuring the governing authorities to lean on the banks to do more short sales and to streamline the process.

My 2 goals are simple:

• Make more money;
• Work less.

2008 was a difficult year for me compared to 2007, and I got caught up in a pattern of putting out fires and working more reactively than executing a plan. I will not let history repeat itself.

My 5 resolutions are designed to fulfill my goals. This posting isn’t the full enchillada for my 2009 plans, but it is a halfway decent overview. Here are my 5 resolutions:

1. Take one day off per week no matter what. I’ll do better the other 6 days rested and recharged.
2. Create specific goals. I used to do this, and it went out the window in the scrambling, scatterbrained year of 2008. Goals get me juiced. I’m good when I’m juiced.
3. Plan my work. I am making an annual overall plan and I am going to pursue it via a quarterly, monthly and weekly plan review/evaluation.
4. Blog more. I mean leveraging the web as a marketing tool more via posting my listings in more places, linking to my company website more, and yes, writing more. I have an English degree and writing is therapeutic. If it helps me make money that is a double win.
5. Laugh more. I don’t mean I’m going to watch more Richard Pryor videos, although that isn’t a bad idea. The fact of the matter is that in our business, we are the product. When people list their house with me, they get me. I should therefore take better care of myself and do the things that feed my soul. So in 2009 I’ll walk the dog more when I could just as easily let him out into the yard. I will take Luke to his first Yankee game and explain to him why the Boston Red Sox are evil. I’ll visit Mom more. That sort of thing.

Putting this out in public makes this more than a private “I should” that can be dismissed in a weak moment. I know this works, so I am prepared to be hung by my tongue. My wish for everyone reading this is that you also make more money, work less, and laugh more yourself.

Those of us who live in the NY Metropolitan area (otherwise called the Tri-State area) know all about scandals involving our state governors. Since 2002, all three governors of NY, NJ and CT have resigned amidst scandal. And their offenses paled in comparison to Illinois Rod Blagojevich arrest for trying to sell a US Senate seat. But, they did leave office. Spitzer’s offense was literally a peccadillo in comparison, as was former NJ Gov. Jim McGreevey’s affair. Connecticut’s John Rowland quit in 2004 not after a marital affair but for corruption. And at the time of his resignation he was just being investigated. But none of these governors were led out of office in handcuffs like Rod Blagojevich was.

To summarize:

• Elliot Spitzer: Adultery, but with a prostitute, which isn’t good when you made a living prosecuting prostitution rings. Handcuff not involved, according the the hooker. Check.
• John Rowland: Corruption. Resigned while being investigated, pled guilty, spent time in prison and house arrest. Handcuffs involved, but after his resignation. Check
• Jim McGreevey: Ironically, seemed like he was running for his second term moments after taking oath. Resigned when his appointment to head NJ homeland security threatened to sue him for sexual harrassment. Oh, and the plaintiff would have been a guy, which would damage an ostensibly straight, married sitting governor. Came out in his resignation speech. Lost his marriage. Handcuffs may or may not have been involved. But he did quit. Check.

Now in Illinois we have a guy who has been caught on tape admitting that he wanted all sorts of quid pro quo for Obama’s seat in the Senate, been arrested and led out in handcuffs and he’s still governor! A few news outlets cover his defiance, but where’s the public outcry for his resignation or impeachment? Why isn’t Barack Obama, the rest of the Illinois government or anyone else that matters pushing in a meaningful way for this man to be removed? You would think that he had damaging information about the very people who should be kicking him out of the governor’s mansion (is it a mansion in Illinois?).

This isn’t about Blagojevich. It is about us. When a senator from a small state gets caught with his pants down in an airport mens room, it stays in the news. When a 20-year old starlet with marginal talent gets arrested for driving drunk, it stays in the news. And when a governor gets arrested for selling a senate seat? I need only direct you to this morning’s home page of the NY Times (nothing) the Drudge Report (nothing) and Google News front page (below a fluff piece on Caroline Kennedy and above Obama’s taking his daughters to the dolphin show).

What does that say about us? Where are the protesters? Are we that desensitized? We don’t have the will to sack a defiant, unpopular governor?

Now this doesn’t really relate to real estate and is admittedly off-topic and will be categorized as such. Yet even those of us that are NAR members know that if one of us gets out of line that we have a code of ethics and a grievance process to police ourselves. Can we not expect the same of our government and the free press?

My company is 30 minutes or less from the Bronx, Dutchess County, and Rockland County. I belong to the Westchester-Putnam MLS. I sell in other counties, though, and guess what? I belong to half a dozen other MLS systems to make that happen. Not only is this expensive, it is crazy.

We all get the same TV and radio stations, read the same newspapers, and shop in each other’s towns. Yet, if I want to do business 10 miles away across the Tappan Zee Bridge, I almost need a passport.

The Greater Hudson Valley MLS, Mid-Hudson MLS, Westchester-Putnam MLS MLS of Long Island and Bronx MLS should all be one system, or at least share data. In Connecticut, the whole state just consolidated down to just three, and that number looks to be shrinking. It makes sense. Not only is it more broker-friendly, it is more consumer friendly. People don’t spend their lives in one town anymore. Americans are more mobile now, and the trend has always been a sort of evolution from areas in and closer to NYC to the suburbs. How many more houses in Rockland would sell if the Bronx agents could access that data? How many more people in Westchester, one of the most expensive counties in the Union, would live in southern Dutchess if they had more access to the inventory?

Why should we have to incur the expense of more dues to belong to a different MLS systems just because they are across a county line or a Bridge? Who does that help, except the MLS accounts receivable? Do we need a statewide system like Connecticut? I doubt it- I have no designs on doing business in Buffalo or Schenectady. But the New York City Metropolitan area is a different matter. We should no longer have to pay so many extra exorbitant fees just to do business in our own back yards.

There are those who will perjoratively state that ours is a retread occupation, where failures from other walks of life seek a way to earn a living after flopping elsewhere. I beg to differ, but it is true that for virtually all agents, real estate is not our first career. I know of no college that confers a Bachelors in Real Estate. I know of only one person in college who even planned on selling real estate after graduation, and every other agent I know did something else before -teaching, nursing, insurance, building, and a thousand other varied professions. Some agents I know come from some rather counterintuitive backgrounds, such as dentistry and law. Somehow, know we all found a reason to get licensed and ply this trade.

For me, it was the relentless recruiting of my college roommate Kevin over the almost 7 years since we graduated Villanova. He began selling houses immediately, just as he planned. I went into sales for a publisher. Being the single guy, and the youngest, I was always tapped for travel and relocation. In 6 1/2 years, I lived in Philadelphia (thrice), Maryland, New Orleans, Boston and New Jersey. I could be in Pittsburgh one week and Cleveland the next. I had a fancy title, but I couldn’t put down roots and I was tired. It was about this time in 1995 that I was ripe for change. It was just before my sixth transfer in as many years, and I had been with family over the holidays. My friend called me for the 100th time to pitch me on relocating to Rochester to become a Realtor (even now it sounds like a line from a Woody Allen Movie). He probably expected me to say no thanks for the 100th time, but this time I said “yes.”

I resigned my position with the owner of my company (whose deplorable conduct in the aftermath confirmed every suspicion I had as to why I should leave in the first place) and arrived in Rochester, NY in July of 1996, new salesperson’s license in hand.  

I knew nobody save for Kevin and Paul, who owned the company. I had no other referral source. I had a funny downstate/NYC area accent. I had no girlfriend and no savings. I did have Paul and Kevin’s support, however, and my own tenacity. Per their coaching, I was an expired and FSBO fiend. In my prior life, when the customer was parochial schools, I learned to spot every bingo sign. Now my tires screeched when I saw a For Sale by Owner yard sign. That would be my strategy for 5 years, and it worked very well. I took to this business in large part because it was devoid of the corporate politics of my prior position, and there was no “Big Lie.”

The Big Lie in my first career was that the company was going places, and that we were all in on the ground floor. When it got big, we’d be on top of the heap. But no company will outperform the competence of the upper management, and I often felt like the foot soldier of a mad general who cared nothing for what the field intelligence said when it ran counter to his ego. In real estate, there is no Big Lie. There are too many successful people with duplicatable practices. Success leaves clues, and we are in control of our destiny simply by replicating what works.

I left Home Safari after 5 happy years and moved back home to Westchester to court my future wife. Today I run my own independent firm styled in large part like the brokerage Kevin and Paul ran. My destiny is in my hands, this fits better than a corporate setup, and I like it that way.

In light of this post by the Somers team on Dual Agency I feel compelled to share my thoughts on the practice. I can only speak about it from my own knowledge of the practice in New York, so agents in other states might get limited value from my thoughts.

When I list a house, I am hired by the seller to be their advocate. I work for them. They are my client. They hire me  because they feel that I have the best chance of bringing them a buyer. But if I do bring a buyer myself, they have utterly no desire for my allegiance to switch or be compromised in any way.

If I show the listing to someone without their own agent who calls on a sign or ad, they are not my client. They haven’t hired me, they are told I work for the seller, and if they want to go forward, they will sign disclosures that clearly state that I represent the seller, my client. If they ask me to represent them as well, the only answer I can truthfully give them is that I can’t represent them.  Even if they ASK, I cannot. They don’t become my client with a verbal request.

If they want their own agent, I tell them that they can go get one to represent them. But I cannot compromise my loyalty to my existing seller client. Does this mean they won’t work with me? No! People value competence and honesty. Everyone whom I have sold my own listings to since 2005 has done so with the understanding that I don’t work for them. But they feel comfortable enough to go forward anyway.

So how can dual agency occur? Only with two existing clients who want to do business with each other. For example: You list your home with me. You are my client. It sells. You then decide that you want me to represent you in your purchase of your next home. Common enough? Lo and behold, I show you another one of my listings and you decide you want to buy it. A conflict now exists. They are my client. You are my client. Aside from withdrawing the listing or you hiring a buyer agent, the only solution is for all parties to consent to dual agency. Have they lost 100% zealous, bulldog advocacy? Yes. Does it compromise their confidence in the transaction? Evidently not, because they have a relationship with me, and that trumps dumping a deal into the lap of someone unfamiliar with the transaction or the principals. Another plausible example of dual agency would be when a buyer I have been working with as a buyer agent for a while chooses to engage one of my listings.

This is rare. And it requires the informed consent of the principals.

I think many cases of dual agency are misnamed, because listing agents believe that buyers will only buy the listing if the agent promises to be dual. But that isn’t really where a client relationship comes from. Moreover, it is strictly semantics, it tempts fate if an issue arises, and can potentially cause unneeded liability.

For the record, I am fine -in theory- with dual agency in this context because a) it is already legal, b) the principals know me and I know them, and c) good will and respect typically trump the doubt and suspicion that is the acorn for the need for representation to begin with. Another benefit it shares with double ending your own listing with customers is that you have more control over the details of the transaction and you don’t have to chase another agent down for updates.

But this all boils down to understanding what makes a client and what makes a customer. Understanding that makes us better advocates, and an agent in command and confident of his or her role will be of better use to, and attract more, clients and customers alike.  

With rare exception, buying decisions are made for emotional reasons. Overwhelming a prospective buyer with lots of data in a showing will typically talk them out of, rather than into, making an offer.

Understandably, many sellers have put years of effort and money into keeping their home in good condition. They have upgraded, added on, improved and enhanced. They are justifiably proud. And that 47-point checklist of improvements and updates is valuable… at the right time. When is the right time? I’ll tell you when the wrong time is: 30 seconds after the buyers walk in. Given the slower market, many of us are taking listings which were previously with another company, and I often hear how the prior agent didn’t “push” the house enough. Often, they’ll only list with someone who pledges to sell it their (as the seller’s) way. That shouldn’t be the time to make a blanket pledge, it is a training moment. I sell my way. That isn’t arrogant, it is the voice of experience. Most lay people don’t know how people make their buying decision. It is my job to tell them.

Listing agents (or, worse, sellers who are there for the showing) who blather on about copper piping, the fireplace heatilater, artesian well, closet organizers and the arcane rationale of why they removed the linen closet in 1994 to enlarge the master bath, forget that if the place doesn’t feel like home, then they are wasting their breath. All too often, I’ll leave a showing after the agent or owner’s soliloquy and hear my buyer say “so THAT’s why it has been on the market so long.”

That’s how the information tsunami works on most buyers. There is the odd match made in Heaven when the buyer is a forensic CPA who is obsessed with statistics. But for the rest of us, the pitch is counterproductive. Just let them walk through and try the place on. Let the buyer agent do their job. And when they leave, hit them with the Magna Carta improvement handout. But for the initial showing, less is almost always more.

Remember, questions are buying signals. If they ask about the fireplace, tell them about the heatilater. Just remember that where you might see a upgraded chimney lining retrofitted for a stove insert with a state of the art blower which harnesses the heat that might otherwise go straight up the flue, I see myself and my wife with a bottle of wine. Same fireplace.

People buy homes because they feel like home and they formulate their choices of showings with basic criteria. Barraging them with information does not build value, it actually destructs the emotion that goes into making a buying decision. Sellers need to understand that. And they also need to get a cup of coffee down the street for showings.

Buyers are waging a war of attrition with sellers in this market to be sure. I recall that when the sellers had the upper hand that buyers had to pretty much deal with their demands or lose the deal. The opposite is now true. At what point, though, does using their leverage cross over into bad faith?

Example: We’ve have a listing under contract with a buyer who poses a challenge. First, this past Spring they were a low ball offer that my seller client did not accept. They lurked, though, with their agent calling me periodically with various Jerry Bresseresque pitches as to why we should sell to them at their price. The house is pretty nice though, and in the Summer we got another offer. Given the reality of losing their chance, they upped their bid and promised a fast closing. To make a very long story short, we went with their offer. The fireworks started once they realized they were ahead of the backup offers.

We do home inspections before lawyers draw contracts in our market, and these buyers used every delay in the book in the inspection and contract process to effectively dry up the backup offers to strengthen their own leverage with us. Intentional? I’d need a crystal ball to truly know. But the upshot is that after a hack home inspection, which took time to debunk erroneous flags of the heat, electric and well water, and various other delays, the backup offers moved on.

Along the way, radon came back as elevated. The buyer wanted $14,000 to remedy well water and air. The proposed November 30 closing was delayed in all the renegotiation, and all the early December talk is now early January because of even more changed stories. Parsing the details would turn this post into a book, but the bottom line is that once the competition for the home was beaten out, the promises made to beat that competition dried up and the buyer manipulated everything available to return as much as they could to their original offer. Their agent is an ineffectual carrier pigeon with no influence over them.

Have you ever been driving behind a slow car, only to have them get inexplicably competitive and accelerate when you try and pass them? If you don’t pass them, they slow down again and if you do pass them they’ll pass you, as if the object is to be ahead of you for its own sake. That’s what this whole transaction feels like.

So was this just business, with the buyer trying to get the best deal they could, or bad faith, where once they “got ahead” intentionally slowed down with no intention of keeping their word?

This much I know: what makes you a good businessperson is not so much how you can skew a deal to your own advantage to the detriment of your partner in commerce, but more how likely  they would do business with you again if the chance arose. That is the acorn of both good karma and repeat business. I wouldn’t do business with these people again, and I wouldn’t hire this agent unless she were completely retrained.

In light of this post by Cathy Tishhouse, I will offer my planned activities today as a small example of why we earn every penny. Yesterday I wrote about a listing I have that is under contract and there was a question as to whether or not it would be wiser to delay the closing and allow the buyers to rent until closing or to escrow money and close sooner. The buyers have made their own decision , which is that if we don’t close in 2008 that they’ll be forced to find another home.

So here’s my day, and bear in mind that there is a foot of new snow in the ground:

8am: arrange for a snow plow to plow driveway at client’s house, as it is no longer occupied.

10am: arrive at Budget Truck rental and personally rent a moving van.

11am: meet my seller at the house listed with me and together, he and I will move his dining room set and snow blower into the garage. Then, we’ll pack the truck with the rest of his belongings.

12 noon: drive client and his belongings back to his house 45 minutes south and unpack.

I will then return the truck and put the snow blower and dining room set on craigslist so they can get them sold ASAP. I will then work in my home office until it is time for bed, taking time to eat and put my own 4 Little Reasons for Working to bed.

Technically, I don’t have to do any of this, but my client is overwhelmed, stressed and busier at work this time of year than any other. He and his wife need a hand. They chose to do business with me. Today I am going to demonstrate why they made the right choice. I am not patting myself on the back. I had no intention of mentioning any of this until I read Cathy’s post. It is my small way of answering the -ahem-gentleman in her post’s notion that our commission is not reflective of our value.

As I commented on Cathy’s blog, we earn every penny.

After a rather arduous marketing effort, I have a listing under contract with a cash buyer who can close at any  time. The cash isn’t his; a generous friend is holding a private mortgage. Even though my seller client bought the house only 2 years ago, we found out that the deck and downstairs bathroom do not have certificates of occupancy. It is only a formality, but those things have to be filed for and provided.

All parties have agreed to escrow funds so that we can close this week and ensure that the compliance issues will be handled. No big deal. Everybody wins this way- the buyers are in for Christmas and have their daughter registered for school before the 1st of the year, and my sellers can finally close the book on two years of owning in a home too far from their jobs.

Of course, my seller’s attorney voiced his opinion that we should not do it that way. He suggested that it would be better to for the buyers to rent the house until the COs are procured, and then close. This is madness. Closing with money in escrow does carry the theoretical risk of losing the escrowed funds, but making my clients unwilling landlords opens them to far worse risks.

First, my clients would be liable for anything that happens while these people are living in the home renting back before closing. What if the house burns down? What if the furnace breaks? What if their small daughter drowns in the large inground pool?

Moreover, delaying the closing in this market is tempting fate. What if the buyer loses his job in this economy and backs out? What if they decide that they don’t like a neighbor, or the sound the refigerator makes? If these people elect not to close for some reason, how do we get them out of the house?

I never met an attorney who likes pre-possession, especially when there are options to prevent it. Yet this lawyer prefers it. I should add that this guy represented them in their purchase 2 years ago and didn’t catch the out of compliance-deck and illegal bathroom. Bad job. Opening the client up to risking losing the sale or having a serious liability problem is also bad advice in my view. My clients agree with me and are going to instruct him to escrow, but I remain disturbed by his questionable counsel.

Am I missing something here?