Birch Court in Ossining, the former grounds of Briar Crest Nursing Home.

I am one of those brokers who vocally opposes the practice of using appraisers who do not possess local knowledge of the area they work.  I have seen too many sales scuttled by robotic, ill-informed appraisals which lack the context that local, more accurate information brings. Out of area appraisers often are less engaged, and are there by economic necessity than local expertise. It is a problem.

So you can imagine my consternation this afternoon when I met an appraiser at one of my listings when he told me that he came from 90 minutes away in Kingston, New York. That is closer to Albany than it is to Ossining.

It was too late for sour grapes, however, so I instead engaged him on the property and what it had under the hood. I had to focus on that, because otherwise I met get emotional. Not because I need the sale. The subdivision was built in 2007 and stood on the former grounds of Briar Crest Nursing home.  I worked there the summer of  1986 after freshman year of college, and  my father died in hospice care at Briar Crest on July 8, 1993. I can’t drive by the street and not think of him.

But I  had no time to get into any of that before Peter, the appraiser, told me “there was a nursing home here, you know.” I knew, I said.  And I then learned that Peter’s father was at the very same nursing home before passing away himself in 1991. The conversation of course, took a different direction at that point, and we shook hands in solidarity at losing those who mattered most to us literally yards away from where we now stood.  Peter had never appraised a home in this development, but he always watched it. He knew it inside and out because of the obvious significance of where it was and what it meant.

Suffice to say, I have zero doubts about this appraiser’s knowledge of the locale. And I seriously doubt he’ll be robotic on this one. Sometimes these deals occur close to the heart, and you never know when the world will suddenly shrink to the seize of a few village lots.

Dad and me, around 1969.

One of the Facebook discussion groups on real estate I frequent is the aptly titled “Raise the Bar” forum where we discuss best practices and making the industry better. Because real estate is local and customs and laws vary by region, opinions often vary. Many themes resurface from time to time, among them the the question of whether a listing agent being present for showings helps or hurts their clients’ chances for sale. 

Rob Hahn, a very respected voice in our industry, asked the question of lock boxes specifically; if their eradication would not be a good thing. Rob made the case that, as a seller, having his advocate there for showings would be a help. The listing agent, after all, knows the house best, can tell the home’s story, and feature it’s many features and benefits. The buyer agent may have never seen the property before and would therefor be at a disadvantage. 

The counter to the argument was twofold: having the listing agent present for all showings would be inefficient, and that buyers prefer to not have the seller or their agent present for what should be a private tour of the property.

My opinion, as I have stated before, is that it is better for the buyer agent to have privacy with their client free from the background noise (or more intrusive, in some cases) of the listing agent. 

Here is one of the several comments I made: 

The logical outcome of eliminating lockboxes would be one of two things: Forcing agents to pick up keys elsewhere, or forcing listing agents to accompany all showings. In both cases, it would be a logistical nightmare, with the latter having showing agents answer lots of questions with “I don’t know but will find out”. 

There might be some anecdotal instances of the listing agent “selling” the place, but in general people don’t buy if it doesn’t feel like home, and nothing an agent says will create that feeling. Ask anyone why they bought their home, and the least-heard reason will start out with “the agent said…”
Buying a home is a personal experience. Intensely so. I have often drawn the comparison of being in a clothier’s dressing room. It is you and the mirror. People want to be alone with their thoughts and their peeps, not have an outside voice telling them things that may or may not even be important.

Sales is identifying a need and filling it. Knowing the house is half the equation. Knowing the buyer is more crucial. Just because a listing agent knows the house doesn’t mean they can strike the necessary (and often intrusive) connection to the buyer to adapt the home to the buyer. The buyer agent knows the client better and what their needs are. They should be the ones conducting the showing, and if there is a story or unseen benefit of the home, it should be neatly typed on a piece of paper for them to use at the showing, alone with their clients.

There are no lock boxes used in Manhattan, just a half hour south of me, so I am keenly aware of how hyper-local the practices and protocols can be. And I fully recognize that in the cases of multi million dollar properties in Westchester, the listing agent will often  accompany -although that doesn’t always work out too well.

I believe that lock boxes, especially the Sentrilock system we use which is all digital and far more secure than old-style combination lock boxes, work best for my clientele. For those that feel otherwise, they are free to conduct their practice as they best see fit. It is not a one size fits all industry. 

Late last month, the New York Department of State issued an interesting opinion that effectively ended the practice of brokerages giving corporate titles such as “Executive Vice President” and “Managing Director” to their licensees. It was a practice mainly done in Manhattan (and we did name a VP once in full disclosure), and became so prevalent that it almost lost its meaning; you’d walk into an office of 100 agents, and 50 would be vice presidents. From the letter:

If an agent advertises falsely that he or she holds a corporate title, it would be considered “dishonest” and
“misleading” because doing so would lead the public to believe that the brokerage entity has appointed
or elected the agent as an officer or to a comparable management position.

I can see how a consumer might be mislead by thinking that if they were working with a Vice President that they were working with an actual executive of the firm on a salary when in fact they were just a licensed salesperson with a 1099 independent contractor agreement.

Kind of.

I think most people know that a lady blowing up a balloon for an open house and or a guy crouching down to show a sink’s drain trap is not an actual member of the company’s managing board or possessed voting stock. It just became over done- it seemed like every 3rd licensee I ever dealt with in Manhattan was some sort of  Vice President.

In my experience in sales in two industries, “Vice President” has always been more of a rank of management. And I have walked into many bank branches and dealt with a head teller on a paltry salary with “Vice President” on their card. I never believed for a second that guy in the bank sat on the actual board of the bank. If they didn’t, what were they doing counting my jar of quarters for?   But my opinion doesn’t matter. We have to abide by what the DOS (Department of State) thinks, and the titles are all gone.

So what now? Does an industry that specializes in marketing and self promotion just embrace boring? Or will we see more creativity in titles, just of a non-corporate nature?  I don’t doubt for a second that creative titles will embellish Licensed Salesperson and Associate Broker on business cards very soon. Ironically, as founder and owner of my firm I never used the title “President,” although I could. I could start to, just to press my new advantage, but I know my colleagues will get competitive in the title department somehow in the very near future.

A few suggestions:

• Overlord
• Potentate
• Viceroy
• Despot
• Czar (or Tsar)
• Nabob
• Kaiser
• Jedi

I even created a proposed card with a another idea or two. Think I should order 500?

 Three times in the past two weeks, we have had listings go in bidding wars. Three times in the past two weeks, we have had buyer agents tell me that their buyer client did not believe me that they had competing bids. In each case,  those buyers all lost the house. In my own company, we have also had buyer express doubt that there were other offers on a home they wanted to make an offer on, and in those cases too, they didn’t get the home. 

Bidding War: Briarcliff Manor
Bidding War: Yorktown Heights
Bidding War: Ossining
Multiple offers: Yonkers, Garrison, Carmel, Hopewell Junction, and probably a few others. 

The assumption that a listing agent is lying or fibbing is rooted in the old stereotype that real estate agents are deceitful and will say or do anything to make a sale. The joke about being like used car salespeople often has the punchline of “hey, don’t insult used car salespeople.” The problem with that is that it is untrue. For every deceitful real estate agent you can show me, I’ll point you in the direction of 99 decent, honest and upstanding licensees. Liars don’t last, especially in the market we have seen the past 5 years. 

Just think about it pragmatically. An agent lies that there are other offers. You call his bluff and don’t proceed. If he or she is lying, the home remains active and available. Who wants that kind of egg on their face? And what about the liability that might result? No thanks. Instead, what is happening lately is that the home goes to contract quickly, and the cynical buyer is back out there trying to find a home because they didn’t believe  what they were told. 

From my own point of view, lying would be suicide, if only for practical reasons. I have over 30 agents, the firm has over 60 listings, more than 20 transactions in process, and  the permutations of interactions, messages and conversations with other agents, lenders, lawyers, appraisers and the like would mean that my frazzled, overworked and sleep deprived self would have to remember two versions of every conversation in order to protect a fib. I’m 45. I have a wife and 4 kids at home. Life is easier when you have one version of anything to recall. Inadvertently being caught in a lie would be a huge danger with all those moving parts. I don’t even know how I’d keep it all straight. 

It is all out there in the media. The bust is gone. Loss of value is gone. Prices have stabilized and risen in some cases. If a listing agent claims to have other offers and you don’t believe them, I suppose you could verify with something in writing from their client or broker, but I would err on the side of trust. Things move quickly in a busy spring market, and the balance of leverage has shifted in many cases to the advantage of the sellers. 

Inman News, the nominal online trade publication for the real estate industry, ran a contest last week for innovative marketing ideas on Twitter under the hashtag #MadRESkillz. It sounded like a bit of fun, and at the encouragement of Inman reporter Teke Wiggin, I offered a few of my own suggestions; I wrote about using a QR code to have consumers see a video of a listing on their cell phone right in their car without having to call or text anyone, and several others. 

One idea, the concept of pricing property with a crooked number at the end instead of -900 and -000 was selected as a finalist. 

The other finalist was a brokerage in New York City that stated that 36 of their agents had the firm’s logo tattooed on their body. 

The body art won. 

This week, I was encouraged to participate again, and I did, but was not selected as a finalist. The selections were a flirty yard sign and a photo of a presumably dead bare foot sticking out of a doorway. The screenshot is below. 

Inman ran a story about the contest a few days ago and none other than Ann Faranda was quoted, saying 

“Tattoos are nice and fun on their own but within the real estate industry I’m not sure that send the right message or image out to potential clients — kinda like seeing your attorney with a tattoo of his/her firm on their arm,” wrote Ann Lee Faranda, co-owner of J. Philip Real Estate.

But Faranda is not exactly an unbiased source. Her husband Phil Faranda, the other co-owner of J. Philip Real Estate, was Rapid Realty’s opponent for this week’s #madREskillz. He submitted the marketing idea of pricing listings according to their area codes.

I seriously doubt that if I were a consumer that I would care about my agent having a tattoo of their brokerage on their body, and I’m pretty sure that I wouldn’t want a photo on my listing suggesting that someone is sleeping in the buff or demised in my bedroom. But I do appreciate that some brokers have some creative ideas for making their listings stand out, and it is clearer still that things have improved in the market enough for some of us to have some fun again. It has been a rough 5 years, and morale is up. And if the licensees are happy, I am sure their clientele is doing better as well.  

It has been weeks since I last updated this blog, and it isn’t writers block, indifference, or slow news days. I am busy.
I don’t mean active, or experiencing the typical cyclical upswing of the spring season.

I am busy. Really busy.

I started the firm in late 2005, and it took me 9 months to prime the pump with any significant number of clients. By mid 2006, I had clientele for sure, but the market was then going through what was then referred to as a “soft landing.” A year later, the sub prime crisis hit. The year after that, Wall Street’s sinkhole almost brought on a barter economy. I have never really participated in any exuberance, rational or otherwise, as a broker.

Until now.

I am in the midst of multiple bids on three listings as I type, several quick accepted offers on others, and inventory has shrunk to a level so low it is almost absurd. Consumer confidence has come roaring back, and I am seeing buyers drop inspection contingencies, mortgage contingencies, and doing as much as they can to get their offer accepted ahead of the competition.

There was a time when I would go over market activity with sellers to price out their home and the MLS would have a very long list of active, unsold properties and an all to short list of sold properties. That ratio has now flipped: there are as many sales as there are available properties, and in some case fewer available homes than the closed properties. Buyers have fewer options, and it is making them act. The leverage that buyers could exert just a short year ago has all but evaporated, and sellers have regained leverage with a vengeance.

I recall 2007 when banks severely curtailed their underwriting guidelines to minimize risk and remarking how quickly the pendulum had swung to the disadvantage of home sellers back then.

How quickly the pendulum has swung back.

This is not to say that overpriced homes will sell or that happy days are here again for good. Overpriced homes still get stale. But homes priced right, instead of inexplicably sitting lonely and unsold in the lean years of 2008-2011, are now selling briskly to eager buyers with some robust competition. Buyers no longer possess the leverage to hold the seller over a barrel anymore. Balance is back. Values have stabilized and in some cases, gained strength.

I have not had the time to post market stats locally, but I will soon. My observations are that of a guy out in the field, watching this all firsthand. It is a sight to behold. It isn’t “easier” for a variety of reasons, not the least of which is the return of neophyte agents who don’t know their job too well and the accompanying headaches, the consumption of time to handle multiple agents regarding the same property, and the endless work of quality control on higher volume. But consumer demand is back, sellers can sleep better at night now, and we no longer risk giving away the farm- literally- to consummate a sale. I am almost ready to say the R(ecovery)-word.

As I stated to a seller client who wondered aloud if we had under priced their home after a huge bidding war on their property, we are witnessing the transition to a new market where, finally, the wind is at our backs.

We had our monthly company meeting today and discussed, among other things, how best to best help buyers in the purchase of their home. In the group discourse on what is important to a real estate consumer in 2013, the matter of consumer research was looked at critically. There are some basic truths:

• Brokers are no longer the gate keepers of information.
• Brokers are no longer the gatekeepers of what home are available for sale.
• Brokers are no longer the gatekeepers of aggregate data.
• Brokers are still needed because our value proposition is not information, but of advocacy and guidance.

In my recent experience at Hear it Direct, a solid 18 out of 18 consumers said their broker was worth their service fee (commission). Most, if not all, would use the same broker again, or at least use a broker in their next transaction.

So here is what is so funny that I pointed out to in our meeting. Consumers, who agree that brokers are necessary to their home purchase, research everything about their prospective home, such as schools, neighborhoods, crime, demographics, market stats, municipalities, local laws, and almost anything else you can think of.

EXCEPT their broker.

I can’t tell you how many times I have spoken with people who knew incredibly granular data about their community of choice, but then either dealt directly with a listing agent with no advocate of their own, acquiesced to dual agency, or just used some guy they met at an open house. Time and time again, especially in stories of less than positive experiences with agents, when I get to how the consumer chose their representative, they reveal that they didn’t really research or vet the person who would broker the largest financial event of their life.

That blows me away.

Yes, research. Learn about the community, the walk score, the schools, crime, and neighborhood amenities. But for God’s sake don’t trash all that hard work by using a sub par agent to represent you.

Roughly two thirds of our company listing inventory are homes that were listed with another brokerage that expired unsold before hiring us. Typically, their last agent was a family referral, social friend or neighbor, or casual acquaintance. Many of our buyer clients worked with other agents before engaging us as well. They didn’t interview multiple agents. They just figured that the Multiple List was the Multiple List, or that all buyer agents unlock doors the same way, and that their agent would do. And they lived to regret it.

I don’t blame these folks for researching everything carefully but their agent. I blame our collective industry for failing to educate the public. HOW you research an agent will be for another post, but suffice to say that a little thing known as Google, track records, personal references, and transparency go a long way. THAT you research an agent before hiring them, however, should be an absolute given necessity for any consumer. We are not all the same, and I’ll take it a step further and say that an agent who doesn’t sell a lot may be a better match for some than someone who closes lots of deals. The important thing is to find the right match, and when consumers know to do that the rising tide will carry all boats.

This past Wednesday I had the privilege of being one of the industry panelists at a unique real estate conference at the Papermill Playhouse in Millburn, New Jersey called Hear it Direct. The format had group discussions with six home buyers, six home sellers, and six Generation Y buyers & sellers to discuss their experience and insights in the marketplace dealing with agents. Tough questions were asked, and in many cases tough answers were given which, for many in our industry, were uncomfortable to hear. It was an unfiltered view of the consumer experience from their own mouths, the good, the bad, and the ugly. After each consumer panel the moderator would then discuss the session with a panel of industry professionals, and I was on the panel discussing the home sellers.

What got me interested in participating was a video I saw a few weeks ago from the west coast event, where the Gen-Y panel was downright harsh in their assessment of how their agents handled their cases. Just watching it made me cringe. We’ve all heard the stories, and in many cases, we have been on the other side of transactions where we had to deal with “that agent.”

Since the advent of the Internet in real estate, there has always been a sentiment among many that brokers would go the way of travel agents because of the consumer access to data. That has not been the case because you don’t buy a house the same way you book a flight or buy a book online. However, the industry is changing, and professionals have been inundated with new shiny objects as well as tens of millions of consumers who have come of age since the downturn for whom technology is an afterthought. To them, having an email address or website doesn’t make an agent special or forward thinking.

Agents have responded by often becoming even more automated and technologically sophisticated. Technology on the wobbly shoulders of 90′s “look at me” image marketing (on the wobbly shoulder of decades of being the gatekeepers of information, which we aren’t) has created a disconnect with the consumer, even among the most well meaning licensees. We literally have to unlearn much of the way we were taught to transact business in order to reconnect with our clientele in a meaningful way. 

That isn’t easy because there is no blueprint.
We can’t Google a simple solution the the challenges facing the industry.

So I expected a rough atmosphere at our event. It had its moments, but the takeaways, insights,  AHA moments  and reaffirmations of things I knew were incalculably valuable. The discussion of what consumers want from their agent in today’s world, what they hate in their agent, what they’ll do differently next time, and dozens of other things will impact how I model the architecture of my company going forward. I will write about my insights in future posts, because one article tonight will not do it justice. Suffice to say, what will make brokers survive and thrive in the 21st century will not be shiny objects or techy webby gizmos. It will be the same qualities that have have been archetypes of great organizations and societies since we started writing stuff down. How utterly simple, yet utterly counter intuitive.

Communication.
Responsiveness.
Caring.

Yeah. That stuff.

As I told the Hear it Direct co-founder, my friend Sue Adler, this experience will make me a better broker. The cynic will say we should already know this. Well, duh. We know it. It isn’t about understanding the idea. It is about implementing it the way we need to in order to get the right outcome. You can’t take it for granted. And you don’t know what you look like from the outside. We strive to do this stuff every day. Now we have game films. The good news, from the mouths of consumers themselves, is that when we deliver on what they truly need, we are worth every penny we are paid.  

I am ALWAYS interested in being a better broker and building a superior, cutting edge brokerage. This may be a small distinction, but it is powerful: up until this week, I always built my firm to be a tech-forward firm that cares. Going forward, we will be the caring firm that is tech forward. It is a subtle shift, but powerful. Identify the real need, not what we think they need, then deliver. Simple. When was the last time our industry empirically identified the need?

Since I have recorded my commentary in this blog, I have had exactly two experiences that I expressed certainty  would elevate my game. I now have a third. As I said to Sue after the conference,  Hear it Direct could well eclipse her amazing production accomplishments as her legacy to the industry. It is certainly going to help us. Consumers should know we are listening, and we will not accept status quo. 

The National Association of REALTORS is the largest trade association in the country. Most member Realtors join their association because it means MLS access, and don’t quite get the benefits of membership. This isn’t to say that everything local, state and the National associations do is right; I have been a vocal critic  of NAR at times, but this is not one of those times. 

Recently, a Florida Realtor, Jeff Launiere, was sued for a fair housing infraction because someone found a home while searching on his website that contained verbiage that violated fair housing laws. The only problem was that this was not Jeff’s listing, he didn’t write the remark, and no human being can screen the thousands of listings on their Multiple Listing Service feed for that kind of nonsense. 

The short version of the story is that he went to his brokerage for help, and corporate counsel apparently decided that settling was cheaper than fighting, He was asked to sign something that would not clear his name and “settle” despite an obviously case of mistaken identity, because, as I said, it wasn’t his listing or his fault. For several days, the Realtor community was abuzz about this madness and the unfortunate fate of our colleague who did nothing wrong. 

Today, thanks in large part to intercession from NAR, the lawsuit was dismissed. As Jeff stated on his blog:

I just received word from Laurie Janik, Chief Legal Counsel at the National Association of Realtors that the Lawsuit has been dismissed. 

In NAR’s Facebook group, Ms Janik cited the Communications Decency Act of 1996 as a law that protects publishers from liability for content provided by others. Bottom line: Mr Launiere was asked to sign a statement that would not clear his name in the interest of settling for legal expedience, and he pushed back. NAR helped to an unknown degree (and they told Jeff he the suit was dismissed), but it is clear that they interceded.

Madness did not prevail, and a good man got to clear his good name. 

I could write more on dozens of other matters, but this is Jeff Launiere’s day. Add that to the list of things your association does for you.  

Home inspections are so important that, unlike most markets, local attorneys will not draw up contracts until they are settled. They are never a contingency of the contract in Westchester. Today we  had a home inspection on a property our clients had a recent offer accepted on, and it did not go well at all. Surprisingly, in spite of the many updates and renovations made by the current owner in the 8 or so years they have owned the place, such as a new kitchen, baths and furnace, problems found were so bad that our clients elected to not proceed with the transaction.

There was not one, not two, not even three, but four major issues discovered by the end of the inspection. First, we found termite damage in the garage, then the basement. Then, mold in the basement. After that, evidence of a fire in the home (!). To wrap it up, material that could contain asbestos was identified.

Termites, mold, fire, asbestos. A grand slam. Just one of these situations can hamper or kill a deal. Two of them typically kill a deal. Four? Forget it.

I work for the buyer; my first job is to be their advocate. Could we get the seller to address all the issues to their satisfaction? Perhaps, but am I supposed to twist their arm if they’ve lost that loving feeling? If they truly loved the house they could deal with curing the troubles and staying in the deal. They still may. But it would have to be their choice, not because I convinced them. There are still too many choices out there to do so, and as their agent I have to work for them, not my immediate commission. There is a 1% chance they could wake up in the morning and be willing to listen to the seller’s proposal to fix the issues. But the overwhelming odds are that we will find a home with fewer issues.

As cute as this place was, I have never sold a home that had that many major issues that wasn’t sold as a rehab project or fixer upper at a steep discount. This was a first. But that’s baseball, and clients spend far too much money to compromise on these things. The buyer is out several hundred dollars, but that is the cost of doing business to avoid more expensive issues down the road.

Sellers: Before you list your home, get it inspected. Then this will never happen.

Weekends are busy in real estate, so you can imagine the feeling when my head sank into the couch pillow at 6:20pm when I remembered that I had to drive to New Rochelle meet with a client I promised to see. My client is a retiree, and straight shooter as well, and our conversations are always unpredictable. Tonight, she did not disappoint.

“Yours is the hardest business I have ever seen. I can’t believe it. I was in business for many years. I have never seen anything like it. It never ends. I used to think it was glamorous, to see homes and how other people furnished and such, but that is not so. You are so patient. It is good that you are good at what you do, because it is so hard.”

I was glad she noticed. Forget the hours, vagaries of commission based compensation, rejection and everything else that goes with being self employed. Advocacy is no walk in the park. You have to do the worrying for people. You have to think 5 steps down the road and plan for contingencies if your counterparts zig, zag, or something else. You have to think about clients while you shave. You never leave work at work. Driving home, as I recalled the conversation with my wife, she reminded me that it is like being a surgeon as well- we are always on call.

That is just on the part of the work that centers on client needs. The other aspects of running a brokerage, such as the marketing, administration, sales, management of people, risk, liability and time, can all be taxing. But for those of us in this industry, it is a vocation, a lifestyle, and almost an obsession. We live, eat breathe and sleep real estate. How do I relax? I end my day by reading and writing about the industry on my own platform and in social media. It is the height of irony to unwind from a long day in real estate by immersing myself in…more real estate. But I am not alone.

There is another part to running a brokerage that isn’t part of marketing, management or servicing clients. It is keeping up with the changes in the industry. The new shiny toy in 1996 was a cell phone. In 2001, it was a real estate website. Three years ago, licensees were encouraged to get involved in social media, and boy did we ever. In those and many “THE” things to do, we do it and often not well. My social media news stream is flooded with the insufferable amount of agents who use Facebook as a self promotion machine with waves of posts about their new listings, open houses, and humble-brags about what they did that day.

And when the shiny object stops being effective, they’ll say it is passe. Lately, some agents have questioned whether websites, blogs, or home searches on their sites are worth having anymore because of diminished returns. This make me laugh. In 1996 my cell phone was a game changer. But why should it be a game changer now, when everyone has one?

So here was my last update on Facebook, directed toward my colleagues who blame their websites for no longer being effective:

Friendly reminder: Real estate is a tough, competitive business. Therefore, the things you were encouraged to do back in 2005 and 2008, like get a website and blog, are no longer cutting edge. There is always a better mousetrap. The same goes for the Twitter/Facebook thing.
The new shiny objects are video and mobile. Mobile, by the way, is why ZTR and some smart brokers are getting your market share.

Caveat: In 2015, when a Youtube channel and mobile optimized search are no longer the flavor of the month, don’t say they don’t work. They do work. You just have to compliment them with the right new stuff. And you have to use them right, like not using Facebook to post about your open houses (see Todd Carpenter).

Anyone who has ever said or thought “There. I now have a <shiny object>. I am going to make money,” needs to understand that such sentiments are the preamble to an epitaph. Blogpost coming soon…

Our latest efforts are making sure that all of our online content and property searches are fully optimized for mobile. Who knows what it will be next week. But that is the job, and knowing what is next, just like taking nice photos or writing nice copy, is my business. Hard to do? Yes. But do I love it?

Again, yes.

I was fortunate enough to be quoted in Business week in an article entitled Why Redfin, Zillow, and Trulia Haven’t Killed Off Real Estate Brokers.  I spoke with the reporter for what seemed like a good healthy duration on where technology is taking our industry, the significance of its impact on the consumer experience and how licensees ply their trade, and the canard that access to information will somehow render real estate licensees redundant or irrelevant. After all that, here is the one quote that made the piece:

“We will never be a point-and-click industry…You will always need a trusted adviser to ensure that you get the best terms possible. The stakes are so high. If you want to do a do-it-yourself project, build a hovercraft.”

Now, I have said that 1000 times, but the other 999 times I have said or written it, I said “if you want a do-it-yourself project, build a go-cart.” The one time I say it with hovercraft, it makes the media. 

And my friends all picked up on the hovercraft thing. 

Hovercraft do exist. Not just the science fiction kind, but the ones you build at home from a kit. I used to see the ads for them in the back of Boys Life and comic books, and I think they require parts from a vacuum cleaner. I don’t know. I was more of a sea monkey kind of guy. 

But I have seldom felt so strongly about something as to the importance of having a trusted adviser in what is typically the largest transaction of one’s life. The median price for a home in Westchester is about $600,000. Assuming a 20% downpayment and a $480,000 mortgage at 4% interest, the total payments over the life of the loan are just over $825,000. But it doesn’t stop there. The taxes, conservatively in today’s dollars at $15,000 annually, would total another $450,000. The home insurance at $1200 annually would be another $36,000. Add in maintenance, improvements, a new roof and furnace along the way, updates, and you could spend another 6 figures easily over the life of the loan. Staggering. And I didn’t even add inflation or rising taxes. 

One might think I am a lousy broker for scaring off potential buyers with those numbers, but the truth is that you have to live somewhere, and that somewhere is never free. The numbers are uglier for renters, because you spend almost the same money over time, with no tax benefit (Call a CPA. I am not giving tax advice. This is a muse. Hovercraft, dammit), and at the end of the term you have no asset and  no equity. Living is expensive. But it beats the alternative. 

Regardless, you never undertake that kind of a project alone without some experienced advocacy to help guide you. Not all agents are created equal, and I have always stressed to consumers that they should choose their representation wisely. 

But do have representation. Jokes, hovercraft and sea monkeys aside, real estate should never be a do it yourself project. 

Forget the fact that I’m busy. Forget the fact that we are seeing multiple offers far more frequently. Never mind that we have more buyers looking, more sales pending, and more offers being made. Ignore the 5 new construction listings the company now carries, which is an all-time high. Those are all anecdotal examples of the market stabilizing. The real good news lies in the statistical data: more homes are selling for more money than they were a year ago, and not by a little. According to the Hudson Gateway Multiple Listing Service data for single family homes, January 2013 was far healthier than January 2012.

How much better? I’m glad you asked.

For the first month of 2013, 256 single family homes closed, up from 219 a year ago. That is an improvement of  17%.
Median price for those homes sold in 2013 was $522,500, up from $485,000 in January 2012. That is a 7.7% rise in median price.

There are still too many distressed homes, upside down mortgages, short sales and shadow inventory to be dancing in the streets.

But there is no longer any blood in the streets.

Amen.

#Precovery

It is with great joy that we announce the addition of Jennifer Maher to the J. Philip Real Estate family. Jenn is among the most respected and admired names in the Westchester and Putnam real estate community. She is a current Vice president of the Hudson Gateway Association of REALTORS,  Chairperson of the Putnam Chamber of Commerce, has run her own firm, and, by the way, sells a ton of property. Perhaps most impressive to me is the loyalty of her clientele; it seems that many of the deals she works on involve someone she has served in the past. That speaks volumes.

I met Jenn six years ago when we collaborated on a deal that actually never closed- the challenges on both sides of the transaction were considerable, but I had my first experience with the aplomb with which she handled obstacles. We have remained friends ever since. It is easy to do that when the other person is so engaged with association involvement, gets the power of social media the way Jenn does, and always participates (and sometimes organizes) in educational events to help stay ahead of the curve. Her energy, involvement and hyperactivity have always struck a chord with me.

Outside of the industry, Jenn is as much a Renaissance Woman as she is in uniform. A native New Yorker, she’s a supermom, dog lover, hugely active in philanthropy and community, and terrific writer. While I kid her for never taking a bad picture, Jenn is incredibly cerebral and profound; the lens she sees the world through has always spoken to her great intelligence and grasp of the Big Picture.

Jenn’s role will be that of Associate Broker and Director of Development. She will run the commercial division, fortify our presence in Putnam County, and spearhead the growing of the team. Her joining us signifies to me that this is a special place; we are not another independent or boutique. We are building something special here, and will not just be a place where people hang their license. This enterprise should be an example of where real estate should be for consumer experience and as a place to practice the profession at it’s highest level.  This firm will be built with powerful women. That is my intention, and why I am incredibly honored that she chose this firm as her home.

“Rarely do great beauty and great virtue dwell together.”
-Petrarch, De Remedies

A recent client’s very apros pos token of gratitude.

AGBeat has an interesting article on how technology has eliminated many “middle men” from their respective industries, but that real estate brokerage has not been among the victims. It is a well done piece, and I agree that technology will never replace agents for many reasons. However, I do take issue with one thing: The term “middle man” does not apply to me. I am no middle man.

“Middle man” implies an intermediary that stands between the consumer and the good or service who adds their fee without bringing lots of value. That isn’t me, and it isn’t any one of my agents. And that goes for the vast majority of my industry.

Real estate is not a point and click transaction. The proliferation of data and access on the Internet may have destroyed travel and brick and mortar book sellers among others, but those exchanges last a few minutes and end with entering a credit card number. However, real estate transactions begin weeks and months before the deposit. They also do not conclude until 60 to 180 days later (as in the case of short sales) at the closing. There is no similarity to any other piece of commerce.

Often, I will not conclude a transaction with a client until 6 months or a year after my first contact with them.

In the case of a seller, I have given them exhaustive research for pricing, the key to my Rolodex for resources in lawyers, title, contractors, stagers, inspectors, and other trades, and many man hours of time and advice. I have been the general contractor overseeing renovations on property to complete repairs, bring homes into compliance, and getting the home ready and presentable for sale before it saw 1 day on the market. I did it all for free, because I don’t get paid unless and until that home closes. And yes, there have been rare cases where I did all that, the people didn’t take my pricing advice, expired unsold, didn’t renew with me, and then listed with another broker at the price I recommended, selling in short order.  Even if I sell a home in a week, I can guarantee that the work started long before that, in some cases years. Middle men don’t do that.

I have communicated with buyers for months before they were ready to actually look for homes. I have helped them repair their credit. I almost always help them with mortgage resources who have gotten them the very best home loan terms available on the market because, after 16 years in this business, my contacts would make the King of Siam envious. I have put walk through videos on Dropbox for out of state prospects so they’ll know if they should fly in or not. And yes, there have been buyers who have ridden in my car for months, seen dozens of homes with me, and not closed either because they had a change in life circumstance or bought through another broker in different conditions. My pay in those cases was always the same: Zero. That  isn’t a complaint. It is also something middle men don’t do.

And when the right place for my clients is found, the work really starts. I have advocated, sleuthed, investigated,  negotiated, and worked on behalf of my clients for months from accepted offer to close to ensure that the mine field of home inspection, title, contact, mortgage, appraisal and hundreds of other things concluded to their best interests. Middle men don’t do that.

With over 340 sets of clients in transactions valued at over  $140 million, I have remained available for free, as a resource, trouble shooter, and friend. Middle men don’t do that.

Oh. And I have a skill set that only comes with that experience. I look millionaires in the eye the same way I do with regular Joes. I have exercised the patience of Job with other agents in many circumstances, many of whom tough counterparts for a variety of reasons. I have gone toe to toe with lenders loss mitigation departments at huge banks in short sales. I have matched wits with attorneys who think that their JD, and not the facts, put them higher on the food chain than I am. 

All too often the outside eyes looking in judge a broker by the amount of labor they do to the naked eye. There are few metrics for knowledge, communication and a thousand other skills that are not rooted in “doing” but “being.” That goes for many things, including calls, emails and texts late at night.

I am a trusted adviser in what is typically the largest transaction of one’s life as an advocate, fiduciary, sounding board and friend. I am no middle man.

New Construction for $674,914. New Starts are another positive sign.

More homes sold because prices same down.

That would be one clear message in looking at the December sales figures for single family homes on the Hudson Gateway Multiple Listing Service in Westchester County. Transaction totals were their highest in six years with no special stimulus and buyer appear to be returning to the market in stronger numbers. Overall, 2012 was considerably busier than the prior year, and again posted the highest closing tally since 2007. There is reason for optimism looking forward to 2013.

The totals are as follows:

In December, 2012, 376 single family homes closed at a median price of $557,250.
In December, 2011, 278 single family homes closed at a median price of $542,900.

That is a gigantic 35% leap in transactions, and a modest 2.6% rise in median price for the month.

For the overall year of 2012, the totals were 4476 homes closed at a median price of $587,000.
For the year 2011, 3,842 single family homes closed at a median price of $600,000.

That is  a 16.5% increase in closed sales and a 2.2% drop in median price for the year.

Median price is still down six figures from the peaks we saw in 2005 and 2006, and it could be a decade or more before we return to those values. However, that, along with the low rates and pent up demand of a stagnant market for over 5 years, is probably the very reason why more buyers performed in 2012 than so many years prior. With values at this level tens of thousands of homes in the county probably remain underwater. We are, therefore, a long way away from anything resembling a robust seller’s market. The numbers do point to the infancy of a recovery, or a “precovery” as I have written before.

Looking forward in the first quarter of 2013, we seem to be hitting the ground running. Inventory numbers show 2,469 active listings for sale at a median list price of $639,000. Of greater import is that  785 homes are under contract for purchase at a median list price of $585,000. While there is no doubt that the consumers are trending toward lower cost homes when given the choice (and who can blame them for being more cautious?), that is a strong number of pending deals at this point in the year a week removed from the holiday season (or a day, if you count Epiphany).  What we are seeing is the market striking a balance between a decent number of choices for buyers but not enough to give them the leverage they possessed in weaker prior years.

If 2013 continues the pace I will talk of the R(ecovery) word. Until then, I’ll remain cautiously optimistic. The overall economic status is fragile, and as long as the government does not do anything stupid like repeal the mortgage interest deduction or end the debt relief act for short sales, we can go from crawling to walking again.

With 2013 mere hours away I am pleased to close the books on another successful year that saw the company weather the challenges of the changing market and continue on the path of encouraging growth. We eclipsed some goals set in last year’s end of year report, fell short in others, and are set up for a strong new year. At the risk of sounding brazenly self aggrandizing, there is an awful lost of positive to note as we build the brand.

Out of about 900 member brokerage firms in the Hudson Gateway MLS, our company was ranked 53rd in closed transactions, putting us strongly in the top 6% of brokerages for that metric. Last year I was about  two thirds of the company production and my goal was to be less than half in 2012. I reached that goal. For the first time since founding the firm in 2005, I was not the majority of company dollar volume. I still closed well over 30 transactions, but the team’s continued growth and improvement eclipsed my own production for the first time. This was important to me. In building an enterprise, it is crucial that the company, and not just one person, has strong production. My goal in 2013 will be along the same lines: I am committed our rankings improving, and I want to be one third or less of the production personally.

Our team has indeed grown and reached some rewarding benchmarks. First, we have expanded to 34 agents and associate brokers. The growth of the team included the addition of our first ever Vice President, Angela Johnson, who joined us in July to assist in implementing systems to better run the organization and spearhead the hiring and development of new associates. I remain at my teams’ disposal 100% as well. I have the greatest respect for Angela and greatly value her contributions thus far.

2012 also saw the revamping of the company website and my personal blog. The new jphilip.com unveiled in March has averaged about 20,000 page views per month and made a huge impact on developing new clients and customers for the team. My own self hosted blog was also rebooted in March, and the feedback has been rewarding. It remains one of the firms’  best assets. Our web presence has always set us apart, and that will continue with the upgrades.

In July, the firm was awarded membership into Westchester Real Estate, Inc., the area’s most prestigious and highly regarded consortium of independently owned brokerages. This is an achievement that I am incredibly proud of.

I was also among 20 agents selected nationwide to be part of  Zillow’s  Agent Advisory Board. We had our first meeting in September, and I believe that the group is making a difference. It is an incredible team of industry leaders, and I am also impressed with Zillow managements’ desire to do right by their premier agents.

2013 will begin my 4th term as Vice President of the Hudson Gateway Multiple Listing Service. The New York Association of Realtors has appointed me as the 2013 vice chair for the bi-annual Technology Forum, and I remain a state director on the MLS and Technology committees.

The year was not without setbacks. Not every goal was reached. Deals fell through. New hires didn’t work out. But overall I remain humbled at the incredible men and women who have chosen my firm to their professional home, and I will make sure that in 2013 we exceed their expectations. This much is for sure: as I look over the results of the soon to be closed 4th quarter, it is clear that the first quarter of 2013 is set up to be extremely productive. We will absolutely hit the ground on January 1 running, and I have over 30 incredible people to thank for that.

The takeaway for the consumer is clear to me: companies grow and contract for a reason, and we remain committed to learning, development,  being our best, and getting the best results for our clientele. That is why we grow.

In the aftermath of the Journal News’ recent publication of the identity of every handgun license in two counties, their claim that it would be good for starting a dialog on gun ownership is proving to be very wrong. There is discussion, not about guns, but about privacy and what constitutes responsible use of public information. On a personal level, I feel far more vulnerable as a non-gun owner than I did a week ago. It is now easier to find me and target my home and family.

The defense the Journal News offers hinges on the fact that the data was public. But what the editors do not distinguish is the difference between making information available and crossing the line and aggregating that information. The JN is not an almanac. They did not report news. They made it.

Here’s why.

I am a real estate broker. I am also a member of the Multiple Listing Service and have access to that database. The MLS has records of every home in 5 counties via a direct link to public records. Just by knowing your name or address, I can typically tell you what you paid for your home, what mortgages have been recorded on it, and if there are other liens or judgements on the property. It is all in public records, but the non licensed person would only have access to that information by going to the county clerk or paying a website for access, which can be pricey.

If I were to exploit my access to this information and publish on my blog, for example, everyone in Westchester with a mechanics lien or mortgage default, the backlash would be justifiably significant. My job is to use that information to serve clients, not enrich myself by distributing it. Information can be abused. Access does not make it right to aggregate.

I’ll repeat that: access to public data does not make it right to aggregate and mass distribute that information.

In a society where property records and property ownership are transparent, that access to public records is a public good. However, that doesn’t mean that access gives me or anyone else the right to distribute that information to anyone who would not otherwise seek it through the regular channels. All that does is feed the least common denominator who neither went to the clerk’s office nor paid a reputable source for it. The same goes for gun records.

The cynical side of me makes me wonder if this was all just a ploy to be relevant. I haven’t subscribed to the Journal News in years and stopped frequenting their website when they introduced the paywall. Now the publication is discussed coast to coast. Unfortunately, the discussion is not about gun ownership. It is about the paper’s decision to distribute the data.

In an era where we all hope and pray that the 26 lost souls in Newtown did not die in vain, that is a very sad thing indeed. In light of their promise to publish the data on Putnam County, we should also remind them that their job is to report news, not be the news.

Just one last thing: I may not be in the database of handgun licensees (for now), but we do have a 95 pound German Shepherd.