J. Philip's Westchester Real Estate Blog: May 2009

I have been contacted by an investment group that showed interest in a short sale listing. They claim to be cash buyers, but have not shown proof of funds. They also want an incredible amount of information on the property and sellers so they can "evaluate" whether or not to go forward. I probably should have kicked them to the curb in the beginning, but thought it best to err on the side of giving them a chance to redeem themselves. 

After giving my agent a form to fill out on the property and mortgage, I contacted them and explained why we cannot disclose certain things. Moreover, I told her, we know nothing of your ability to perform. This went back and forth a few times via email, and the more I delved into it the more I knew my initial instincts were correct. They had their own team of "negotiators" to do the workout instead of myself and the seller's attorney. After reading email replies with flowery wording reminiscent of the Nigerian Scam,  and dotted with terms like "full disclosure," I told the seller to forget these people. He agreed. At best, these are well-meaning people who are amateurs trying to follow some bologna class or program they got into. At worst, they are con artists. 

I there are some scenarios where it might be OK for a buyer to be an authorized 3rd party to negotiate with the seller's lender, but that should be done over extremely controlled circumstances and after enormous due diligence. The buyer might be a licensee with experience, an attorney with expertise in workouts, or some other credible scenario where checks and balances exist. It should not be granted lightly. In this case, where the buyer is shady, vague, and evasive, it should be avoided at all costs. 

• We Are Westchester County, NY Real Estate. Reach Phil at (914) 723-8900.
• J. Philip Faranda, Broker-owner, J. Philip Real Estate, LLC. 2010 Vice President, Westchester-Putnam Multiple Listing Service. 
• I am one of New York's premier short sale REALTORS. 
• J. Philip Serves Briarcliff Manor, Ossining, Croton, the River Towns, Westchester County, and the bedroom counties of New York City.
• Free MLS Search! Register for a Free Listingbook account and search the MLS like an agent. 
• I am hiring agents. 

All content/images, unless noted, are the property of J. Philip Faranda & may not be used without permission

"We'll be paying in cash." "We won't require a mortgage. We have the funds."

The perception that cash buyers are afforded courtesies, discounts and red carpet treatment has caused some out there to represent themselves as such. The only problem is that they are not cash buyers. Some are just confident that they can get a mortgage, and a few are flat out scammers. Moreover, all cash buyers in this economy seldom have the sort of advantage that some think they have. Cash breaks a tie or overcomes perhaps a 1% difference in price in my experience selling Westchester County Real Estate, but that is about it. Anything to the contrary is anecdotal and not something I can model my brokerage practice on.

I know cash buyers. I have worked with one in particlular since 1996 and dozens of others as both investors and owner occupants. I know the rules of engagement in this industry and what constitutes good faith. The one thing that all cash buyers have demonstrated since day one has been the ability and willingness to furnish proof of funds. I don't need to see it either; so long as the seller's attorney is satisfied, so am I.

What I will not do is jump through hoops for someone claiming to be a cash buyer who gets cute about verifying their funds, who among their party actually has the money, who their attorney is, or diverts from the common practice of good faith. Mystery and real estate don't mix. In our local market, offers are submitted with basic information on the buyer, their pre-approval or proof of funds, and attorney contact information. If a buyer is unwilling to conform to those basic points, they are acting suspiciously. It costs nothing to go over to Staples and photocopy a bank statement or print something up online.

In God We Trust. All other are required to show proof of funds before we start bending over backwards.

Search the MLS like an agent here. New York's Premier Short Sale REALTOR. Read my short sale bog here. See the New York Photo blog here. J. Philip Serves Briarcliff Manor, Ossining, the River Towns, Westchester County, and the bedroom counties of New York City.

• We Are Westchester County, NY Real Estate. Reach Phil at (914) 723-8900.
• J. Philip Faranda, Broker-owner, J. Philip Real Estate, LLC. 2010 Vice President, Westchester-Putnam Multiple Listing Service. 
• I am one of New York's premier short sale REALTORS. 
• J. Philip Serves Briarcliff Manor, Ossining, Croton, the River Towns, Westchester County, and the bedroom counties of New York City.
• Free MLS Search! Register for a Free Listingbook account and search the MLS like an agent. 
• I am hiring agents. 

All content/images, unless noted, are the property of J. Philip Faranda & may not be used without permission

Dear <agent>

Search the MLS like an agent here. New York's Premier Short Sale REALTOR. Read my short sale bog here. See the New York Photo blog here. J. Philip Serves Briarcliff Manor, Ossining, the River Towns, Westchester County, and the bedroom counties of New York City.

• We Are Westchester County, NY Real Estate. Reach Phil at (914) 723-8900.
• J. Philip Faranda, Broker-owner, J. Philip Real Estate, LLC. 2010 Vice President, Westchester-Putnam Multiple Listing Service. 
• I am one of New York's premier short sale REALTORS. 
• J. Philip Serves Briarcliff Manor, Ossining, Croton, the River Towns, Westchester County, and the bedroom counties of New York City.
• Free MLS Search! Register for a Free Listingbook account and search the MLS like an agent. 
• I am hiring agents. 

All content/images, unless noted, are the property of J. Philip Faranda & may not be used without permission

An appraiser in nearby Rockland County has done an analysis on the price changes to a typical raised ranch in his town from 1965-2008. You can see the results here on the board's online newsletter. Once you hit the link, scroll down to page 5. The results are very instructive. In the last bust (1987 correction, Savings & Loan crisis, stock market crash of 1987, early 90's recession), it took until 1998 for prices to get back to the prior peak of 1986. Prices declined for 5 years, then rose nil to very little for another 6 years.

This Great Correction is a doozy compared to those times. The drop of prices from 2007-2008 of 11% is historically unprecedented, and I wouldn't be surprised to see another decade of malaise. It is irresponsible to believe that things will be better in 18 months; we still have billions if not trillions of bad debt to wring out of this economy. New York Home sellers need to understand that they are competing with short sales, bank-owned foreclosures and other distressed situations and that their best chance of selling is to price their home as competitively and aggressively as possible. 

• We Are Westchester County, NY Real Estate. Reach Phil at (914) 723-8900.
• J. Philip Faranda, Broker-owner, J. Philip Real Estate, LLC. 2010 Vice President, Westchester-Putnam Multiple Listing Service. 
• I am one of New York's premier short sale REALTORS. 
• J. Philip Serves Briarcliff Manor, Ossining, Croton, the River Towns, Westchester County, and the bedroom counties of New York City.
• Free MLS Search! Register for a Free Listingbook account and search the MLS like an agent. 
• I am hiring agents. 

All content/images, unless noted, are the property of J. Philip Faranda & may not be used without permission

I won't say when or where this happened; suffice to say somewhere in New York. A buyer contacted me to show what appeared to be a short sale listing that had already been approved. The approval was for a previous buyer that walked away from the deal, so the window of time was narrow. It was a vacant condominium, and we saw it on a weeknight. We took a 2nd look that weekend, and it was there that the listing agent informed me that the "nuance" of the deal was that the "approved" price was actually $20,000 lower than the MLS list price. 

Where was the other $20,000 going? The seller. The seller wanted to be greased $20,000 to sell his pre-foreclosure in a short sale. I have been involved with short sales where the seller has been forced to sell appliances and furniture just to raise the money to move. In some cases, the buyer of the home bought the chattle, and that was legitimate- nothing precludes people from selling their belongings. There wasn't anything in the apartment to buy to give the money a justification. Nothing. Not even a folding chair. 

Aside from the obvious bank fraud I was confronted with, what was particularly disturbing was the brazen stupidity of the listing agent, who so unapologetically continued to lobby for the side deal. He didn't know me from Adam; I could have been a mole for the Department of State for all he knew. 

I advised my buyer client to stay away. I have 4 children to feed and a company to run. I am not going to lose my livelihood over a brokerage fee. I'm not morally superior. I'm just not stupid.   

• We Are Westchester County, NY Real Estate. Reach Phil at (914) 723-8900.
• J. Philip Faranda, Broker-owner, J. Philip Real Estate, LLC. 2010 Vice President, Westchester-Putnam Multiple Listing Service. 
• I am one of New York's premier short sale REALTORS. 
• J. Philip Serves Briarcliff Manor, Ossining, Croton, the River Towns, Westchester County, and the bedroom counties of New York City.
• Free MLS Search! Register for a Free Listingbook account and search the MLS like an agent. 
• I am hiring agents. 

All content/images, unless noted, are the property of J. Philip Faranda & may not be used without permission

Zillow used to be on my last nerve. It seemed that no matter how compelling my rationale was for pricing, a seller would claim that Zillow had their house at $50,000 higher or a buyer would lament that the value of the home they were buying was $50,000 lower. It was maddening. Zillow seemed arrogantly unapologetic about the dreaded "zestimate," which no doubt killed more than it's share of deals. 

However, over time, Zillow seemed to become more agent-friendly. Their responses on blogs like Sellsius seemed to be less defiant. They syndicated listings. They created profiles for agents,  and indexed us by locale and even specialties. Moreover, they have become far more transparent in the accuracy of their property value estimates. 

Good stuff, huh? I even posted a link to my Zillow profile in my Sidebar. 

Then, things started to creep away from the warm fuzzies again. An Inman News article expressed dismay that aggregates like Zillow and Trulia hijacked the SEO of individual brokers.  Not the end of the world, but food for thought. Or so I thought. 

This past week, I got a call from Amanda at Zillow. This wasn't your garden variety solicitation for a banner ad. The upshot is that they want to position agent ads so that people searching for properties will call the agent who bought the zip code and not the listing agent. The extortion selling point was that I should buy my zip code before someone else does. 

How galling.  No content from agents like me, and Zillow is out of business. Why do I have to buy the privilege of getting the call on my own listing? It is MY content! I already paid for the right to market it with my blood sweat and tears. 

I'm not so jazzed about syndicating my listings to Zillow anymore. I am all for Zillow making money, but not by sandbagging me or hijacking my listings. They can do whatever they wish; So can I. I'll consider unchecking them in my syndication options. 

• We Are Westchester County, NY Real Estate. Reach Phil at (914) 723-8900.
• J. Philip Faranda, Broker-owner, J. Philip Real Estate, LLC. 2010 Vice President, Westchester-Putnam Multiple Listing Service. 
• I am one of New York's premier short sale REALTORS. 
• J. Philip Serves Briarcliff Manor, Ossining, Croton, the River Towns, Westchester County, and the bedroom counties of New York City.
• Free MLS Search! Register for a Free Listingbook account and search the MLS like an agent. 
• I am hiring agents. 

All content/images, unless noted, are the property of J. Philip Faranda & may not be used without permission

No, not my brother Tom Faranda, but the Tom Faranda he was named after. 

Whatever you are doing right now, you are doing it free from fear and confident in your future. You have much to look forward to. And for that, you owe a debt of gratitude to a US soldier. 

Tom Faranda was my father's cousin, who was part of the invasion of Normandy in 1944. He perished in the assault of the beach, and  his remains were never found. He was in an amphibious tank which was hit and never made land (I asked my brother if there is a remote chance that he somehow crawled to shore and was nursed to health by some Mademoiselle and lived out his days with a beret sipping wine, to which my brother responded "on Omaha Beach?"). My brother Tom found out what division he was in once, and maybe he'll post that. But the first Tom Faranda gave his life in the liberation of France and the defeat of the Nazis. He died for his country and the liberty of man. 

Tom Faranda. Now you know his name. 

• We Are Westchester County, NY Real Estate. Reach Phil at (914) 723-8900.
• J. Philip Faranda, Broker-owner, J. Philip Real Estate, LLC. 2010 Vice President, Westchester-Putnam Multiple Listing Service. 
• I am one of New York's premier short sale REALTORS. 
• J. Philip Serves Briarcliff Manor, Ossining, Croton, the River Towns, Westchester County, and the bedroom counties of New York City.
• Free MLS Search! Register for a Free Listingbook account and search the MLS like an agent. 
• I am hiring agents. 

All content/images, unless noted, are the property of J. Philip Faranda & may not be used without permission

Withheld. 

This is what sometimes appears as the name when sellers of a home instruct their agent that they wish to remain anonymous. I can understand the sentiment, but in this age of information, home owners should think long and hard before engaging in this practice. Other markets outside of New York may be different, but here in Westchester County and the surrounding areas the connotation of "Withheld" may be counterproductive. 

Over the years, homes sold by a withheld owner were often under distress. REO brokers often use this, and traditionally homes marketed as pre foreclosures would withhold the owner name to help them avoid embarrassment. That worked far better in 1997 than 2009 for reasons related to technology. Unlike 1997, public records with the owner of record's name are a click away, rendering privacy a moot point.  

Other reasons for wanting to have the seller name withheld has been privacy concerns. This is the predominant reason why a non-distressed seller would not disclose their name. However, it backfires all too often.

Privacy should not trump the suggestion of distress. If a listing unintentionally hints a distress sale, the seller's posture is more vulnerable- that can cost them serious money when an offer arrives. And once a buyer believes the seller is in a bind, no amount of denying it will completely eradicate doubt in the buyer's mind. 

There have been times that it helps to know the name of the owner of a sold home when advising clients in pricing their home, and if "Withheld" supplants a last name when trying to ascertain the exact identity of a recent nearby sale, the practice becomes a counterproductive nuisance. 

I think that in most cases people who withhold their name are doing more harm than good. I recall selling a listing right next door to Supermodel Heidi Klum's home, which was also for sale. Now, if anyone would want to withhold their name, it would be a supermodel. Ms. Klum's listing disclosed a corporate owner. She had her anonymity without the "Withheld" moniker. 

Search the MLS like an agent here. New York's Premier Short Sale REALTOR. Read my short sale bog here. See the New York Photo blog here. J. Philip Serves Briarcliff Manor, Ossining, the River Towns, Westchester County, and the bedroom counties of New York City. 

• We Are Westchester County, NY Real Estate. Reach Phil at (914) 723-8900.
• J. Philip Faranda, Broker-owner, J. Philip Real Estate, LLC. 2010 Vice President, Westchester-Putnam Multiple Listing Service. 
• I am one of New York's premier short sale REALTORS. 
• J. Philip Serves Briarcliff Manor, Ossining, Croton, the River Towns, Westchester County, and the bedroom counties of New York City.
• Free MLS Search! Register for a Free Listingbook account and search the MLS like an agent. 
• I am hiring agents. 

All content/images, unless noted, are the property of J. Philip Faranda & may not be used without permission