The New York suburbs are often funny about real estate signs. One town won’t allow a sign with a company name, allowing only “For Sale By Broker” or “For Sale By Owner” on the panels. Another municipality prohibits anything bigger than 12″ x 12″. Some places ban signs altogether, while others have rules rendering them useless, such as one that will only allow them in a front window. On a set back home that does nothing. One local city is OK with “For Sale” signs but outlaws “Sold” signs. 

In every one of these municipalities, I have seen chintzy yard signs that remain up for weeks and sometimes months by home improvement companies, painters, fence installers, garage door technicians, and many other trades. I have never understood why they are permitted and my sign is not. Actually, I do understand, and it is not cool.

It amazes me that a municipality-the government- can abridge what I put on a sign or can restrict me from having a sign at all. It is absolutely contrary to the first amendment, and makes these towns more like patriarchal fiefdoms than governments that are out for the highest and best for the citizenry. Now, there may be a few who find real estate signs to be distasteful or clutter the view. But the constitution doesn’t exist for them to have a good view or have environs that conform to their particular taste. It exists to protect my freedom of expression and ensure that commerce can be promulgated. 

Big companies with large market share in these areas have no desire from what I can see to change the law. It enables them to keep status quo. If I busted my hump and a few of my signs sprang up it might shift the balance of power. They can’t have that. Homeowners probably like the law too, because yard signs can distract, or because their absence makes it appear that nobody wants to move from their idyllic ‘burb. Gag me. That doesn’t make it right. 

The right to self expression and to post my message without the state’s interference is not something that can be voted on or zoned out. It is an inalienable right. The “tyranny of the mob” does not grant or deny rights. Rights are rights. And you can’t bestow a right on a garage door guy and deny it to a real estate broker. I know of no sign restriction that ever held up in court. They exist because we are too busy earning a living to have our day in court. For now. 

Yes, some of the local towns are funny about signs. But I’m not laughing. 

How I found a stud with help from Stanley. 

I’ve never in my 43 years needed to find a stud. 

However, life does throw curveballs, and you have to adapt. So, being an open minded fellow and willing to try new things, even things that are foreign to me, against my nature, and frankly not to my preference, I endeavored to locate a stud. Actually, more than one. I had to. Really. 

One of my agents, apparently, has found numerous studs in her time and offered to help after I explained things to her. The trick is you can’t just grab around, or grope, or even tip toe. You need good equipment. I don’t have any equipment. 

Now, don’t get me wrong, as an average suburban guy I hold my own in the tool department but I sure never had the hardware to find any stud. Especially with a thick rug involved like this morning. 

You see, locating a floor joist is seldom something a real estate broker needs to do. However, on a bank-owned listing of mine, a creak in a bedroom floor was turning people off. When I explained to my asset manager my predicament, he recommended that I get some 6-penny nails and reinforce the loose sub flooring to the joists at the edges of the carpet. Easier said than done, however, because the floor was covered in wall to wall carpet. Now, mind you, I’m no carpenter. Believe me. I studied English. I never took shop. When the other kids were building tree houses I was scoring baseball games and reading history books. 

Anyway, my agent recommended a “stud finder.”  I never heard of such a thing, but they are readily available at any hardware store. I went down to Ossining Hardware and they recognized me as that weird guy who just bought 20 six-penny nails for 60 cents and asked for a receipt. I asked for a “stud finder” and he told me to go somewhere else if I wanted that. But he did carry the Stud Sensor 250 from Stanley, which operates the same way. It located the joists in spite of that wall to wall carpet over the sub floor.

So I got to some serious nailing, which felt a little funny, because it had been a while for me. But you never really forget how to do this stuff, and I got right down to it. Now I may not be a pro, but I didn’t want to pay for it. It actually wasn’t so bad to do it myself. 

I have done many new things in this business which they don’t teach in real estate class, as we all have, but some rudimentary carpentry was never on the list until today. You just never know what the next challenge will be. Ann is very happy that I brought the Stud Sensor home, because she has wanted to hang a nice mirror above our fireplace and couldn’t find the right place on the wall to screw. 

Anyway, I’m pretty exhausted now, and I think I’ll just go sleep early. 

Next week: Why beefcake is the superior treat at broker opens to hors d’oeuvres. 

Peekskill is one of the older River towns in Westchester County. I have blogged about Peekskill before, and I have done quite a bit of business there. It is by far the northernmost city in Westchester county, and in addition to being affordable, the quality of life there seems to improve by the week. This is the market data for July of 2010 for single family homes in Peekskill, and all information is sourced from the Westchester-Putnam MLS.

Prices are way down. Median price last month was $305,000 and July of last year was $310,000, but this July it was $184,500. There were only 4 transaction with 75 homes actively for sale.

Now is a god time to buy real estate in Peekskill. Get yourself a free Listingbook account and check out homes for sale in Peekskill. It is absolutely a buyer’s market here. 

Yorktown is a larger town in north Westchester County between Cortlandt and Somers. It is is very suburban in character- think post-war/baby boom subdivisions with ranches, splits and raised ranches and with larger colonials in the newer developments. It is served primarily by the Yorktown and Lakeland school districts, and it has abundant shopping and parks. Yorktown has always been a popular place to land for southern Westchester and Bronx residents who wanted to move north to the suburbs. Downtown Yorktown Heights is located at the intersections of routes 202 and 118 and is home to the Triangle shopping Center, the iconic Friendly’s restaurant, The Pennysaver of northern Westchester, and plenty of other commerce. It is also the site of the Drivers License test course, where the Boss recently passed her driver license test. So we love Yorktown right now. 

This data is for the Yorktown school district only and is taken from the Westchester-Putnam Multiple Listing Service. It compares the sales of single family homes from July of 2010 to July of 2009.

Yorktown’s market was a mixed bag this July. June was very hot with 22 closings, so a cooling off shouldn’t be surprising.  Median price was certainly up, but the transaction total was a rather lean 8. However, with 25 homes pending sale there is little to worry about. 

To check out the 133 available properties Yorktown has to offer, register yourself for a free Listingbook account. 

I have posted before about my philosophy with real estate investor clients. I don’t dislike newbies or amateurs, but I sure do a good job of scaring them about the realities of how expensive a mistake in real estate can be. I know investors who spent $400,000 on properties before the sub prime crisis hit, expecting to sell at $550,000. 18 months later, the house sold for…wait for it…$400,000. Did they break even? NO, they lost big time because of the overhead, taxes, cost of money, and carrying costs. The Great Recession created a great many ex-real estate investors. 

Our best investors pay cash, know what they are doing, are risk averse but decisive, and are eager to make a deal happen but not foolhardy. They have gotten people out of hot water, saved neighborhoods from a vacant foreclosure, helped renters buy their first home, and made strong profits for themselves in the meantime. They don’t watch cable TV shows about flipping houses. They are unimpressed by the amount of money they have in the warehouse, because it is working capital, a tool as much as a truck or plow for their respective trade, and typically devoid of ego. Ego doesn’t make money. 

They also are known more for the possible deals they pass on than the few they do make, because there are way more frogs out there than princes. They never speculate on a property or opportunity they don’t fully understand. Warren Buffett was once asked why he didn’t own more stock in Microsoft, and his explanation was a lesson for us all: He’s not a software guy. He doesn’t know the business, and just because the stock does well doesn’t mean he feels right about buying it. Buffett knows insurance (his area of expertise, actually), Cola, Razors, candy, and other products. That’s where he makes his hay. An investor of mine who does well turning cape cods around will never buy a 30-unit apartment building because even though it might have fantastic cash flow, it is beyond the scope of his expertise- maintenance, management, rent collection, that is not something one wants to learn on the fly with huge money on the line.

An investor in 2010 with brains buys what they know. They don’t leverage much, if at all. They take risks that are calculated but not speculative. And they are also intelligent enough to use an agent like myself who speaks their language. 

If you have the funds to pay cash, know the business and the risks, and are looking for a transaction with a good margin, we should talk. 

If you want to learn the business, are not a cash buyer, or just dream of being a big investor, I’ll talk to you. But what I tell you might scare you away. 

The term “Vulture Fund” is used sometimes in real estate and other investments, and, as the metaphor suggests, is money earmarked for the purchase of a distressed asset. Often the instrument purchased is debt; if you have a loan or credit card you go south on, after it is charged off by the creditor it goes on the secondary market, and there are entities like collection agencies and lawyers who buy the debt for pennies on the dollar and then go after YOU for the full amount, plus interest and fees. 

A Vulture Fund in real estate is not exactly the same. Simply put, a vulture fund in real estate is money used to buy a distressed property. It could be a foreclosure, a home with a defaulting mortgage, divorce situation, or other seller who needs to sell so badly that they will trade off time and certainty instead of holding out for top dollar or “market value.” With the property values in Westchester County, the reward can be high, but the risk is considerable. Two years ago, former New York governor Elliot Spitzer made the news when he considered starting a real estate vulture fund. 

While the name is rather pejorative given the form it takes in other assets such as debt instruments and stock buyouts, in real estate a vulture fund venture is often preferable to the cycle of receivership, where the lender takes over the property and the area gets another vacant foreclosure. Often, real estate investors who operate so-called vulture funds here in Westchester and the surrounding area are getting a distressed seller out of hot water, preventing a foreclosure, saving the credit of the seller and sparing the neighborhood from another blighted property. Are all operators like that? No, some are indeed opportunistic to a fault. However, the investors we are fortunate to work with have a heart. 

If you hear the term “vulture fund,” ask about the context. One of my investors is very different from a debt collector. Often they are at opposite ends of the spectrum. 

Earlier this summer I was contacted by a Manhattan resident who found me on the Internet and wanted me to show her and her husband some seven figure priced homes in an affluent suburb about 2 towns over. They chose me for a number of reasons, and our communication prior to our first meeting was promising. I scheduled 5 homes that fit their criteria and met with their approval, and we met at the first home, which was one where the listing agent was to accompany the showing. This is rather common in higher priced homes, and all but one showing would be accompanied. I don’t consider it ideal, but the bigger and more complex a home is, the more value a professional listing agent can bring. 

I said a “professional” listing agent. 

As we walked through the home, the discussion rapidly evolved from all the facts about the house and its features to my buyers, where they live, what they do, why the town we were looking in appealed, and so forth. Now I am watching the listing agent chatting with MY people about THEM. This woman was standing in a master bedroom kibitzing with my people about Manhattan neighborhoods and where SHE lived 25 years ago. 

You see where this is going, right? 

• Prohibition 1: “Did you, Are you, Were you, Will you” In other words, engage with the buyer in nothing personal. It’s not your job to bond with them. You don’t need to match their intimate, personal needs with the house. That’s their agent’s job, and it may be done in a half hour at a coffee shop. I’d just have you sitting at the kitchen table reading a magazine, but if you have to trail us, play it straight. 

Then the phase 2 of client meddling began: “Did Phil tell you about the Park and Ride for the commuter train?” “Did Phil tell you what week of June you can grieve the property taxes?” ” Did Phil tell you how much train station parking passes are?” Of course we just met, so the answer was no. And this “professional” agent with the $2 million listing proceeded to subtly chip away at my new relationship with the buyers who chose me after research and work online. 

They never called me again. The houses, and we are talking about 5,000 square foot homes with all the trimmings of affluence one could expect in suburban New York for $2 million, were put in the back seat. 

• Prohibition 2: “Did your agent tell you…?” There is no upside to this question, and it is a not so subtle way of disempowering the buyer agent. Buyer agents do not always have an opportunity to recite a master’s thesis on all the nuances of the surrounding community, the history of the subdivision, or the extracurriculars offered in the local schools. I’ve got news for you: if your listing doesn’t feel like home, it won’t matter. 

Now, anyone who knows me will rightly conclude that I am not the sort of guy to take this sort of thing sitting down. The rather overt passive aggressive suggestion that a buyer is with the wrong agent and not the local expert on the diner menu or PTA minutes is not working for the seller, it is working for oneself. And it is not professional, it is mercenary. That’s another blog.

Here’s the upshot: If you are a listing agent accompanying showings, the buyers are not your client. They are there with the agent they have selected and you need to respect that. Sell the house. Blab all you want about why the owner chose the bamboo floors, Venus de Milo faucets on the master bath tub, and kitchen island shaped like Guam. Play it straight, because you might be doing a deal with the buyer agent and you need good will going forward. 

Epilogue: This post started as a draft earlier this week. I have since heard from the prospective buyers, who emailed me back that they wish to remain in the city for now. I believe them, as none of the homes we saw that day with that listing agent have sold yet. 

Epilogue II: If you like this post, you might be interested in my thoughts on this post: 

Banning of Yield Spread Premium is Death Knell for Mortgage Brokers

Three days ago, after 43 years of life, 9 years of marriage, and 4 children, Ann passed her drivers test. I know it may sound crazy that a suburban wife and mother, to say nothing of a partner in an active brokerage didn’t drive, but that was how things were. When we met in 1999, Ann lived in Queens, New York, and many city folk don’t drive because they don’t need to with the subway, buses and cabs available. And that was how it was with her. We moved to Westchester not long after we got married, but we kept putting off the license because of babies, business, babies, life, and, um, babies.

Suddenly, it was 2010, we had 4 children who needed shuttling to everything, and we had only one crazed driver and a stir crazy mom at home. It wasn’t easy taking the kids to activities and being there for every grocery trip. So, this summer, with all the kids at camp and no pregnancy to deal with, we prepared Ann in earnest for the test. Not to take it; to pass it. There was plenty of practice, good coaching from yours truly, and about 100 parallel parks. In early August I told Ann she was ready and to register for her test. It was a little scary, but we got August 17 as the Big Day. She passed with flying colors. 

On the way home, we both exhaled like we had after one of the kids was born. THAT’s over. I told her I bought my last maxi pad, and she laughed. She’s already taken Catherine to the grocery, run errands, and taken the brood to the park. She has the ability to get out of the house now, and I no longer have to worry if I am not close and someone needs to be driven. Like many good changes, we wonder how we did it before. 

Just a friendly reminder from a New York -based broker swimming in the shark tank of liability that discussions between brokers on commissions, M & Ms, jelly beans, or anything relating to compensation for brokering real estate is a big problem and potential liability for your broker. Two agents constitute discussions between two brokerages. 

Big problem. Not a little problem. A big problem. I am talking about a 5-figure fine. Capeesh? 

If an agent from Broker A brings up commissions to an agent from Broker B,  if the Broker B does anything other than, say, run away or politely change the subject, the two brokerages could be engaging in price fixing. This is not reactionary, goody two shoes or paranoid. Cases brought up on Sherman Anti-Trust examples include a broker announcing at a cocktail party that he was raising his commission within earshot of other brokers. It doesn’t matter if the post is Members Only, veiled in jelly beans, or only discusses a buyer agent commission. You expose yourself and your broker to massive liability in bringing up or engaging another licensee on the subject, and there is no upside to the matter. It is simply not an envelope prudent licensees should ever push. 

One blog post on Active Rain this morning even had discussions of boycotting a broker who didn’t pay enough. Another comment mentioned an industry standard. Talk about a hornet nest. 

All commissions are negotiable. Period. You do what is in the best interest of the client. Period. 

If you disagree with me, ask the compliance officer at your association. Watch his lips quiver. You simply cannot do it, and especially on a platform with Active Rain’s reach, you can cause catostrophic damage to your firm. If you have to ask if it is an anti-trust problem, it probably is.