Wednesday, November 30, 2011

Viewing a FSBO

One of the main reasons a person will choose to purchase real estate without a buy-side broker is the perception that they will get a better deal. I have covered this before so won't get into it here. I recently had a personal experience of having to deal directly with the owner/seller of a house we happened to drive by. We are working with a broker but after leaving an appointment we happened past a house with a For Sale by Owner sign. We stopped, took a flyer and called to make an appointment. Ten minutes later the seller called back and we drove over for a look.

This initial appointment was fine but just a little awkward as we pointed out some of the pimples on the property. It was obvious the seller was getting a little defensive about our remarks. I kept it to a minimum because bottom-line was that we liked what we saw and the home had some potential. After we left we were a little excited that this could be it (worthy of an offer!) but we would have to see it again. A few days later I scheduled an appointment and we headed over for a closer, more critical look. Usually I would be talking to an agent and would feel comfortable asking critical questions. But facing the owner, knowing this was the house his parents lived in and his father had tinkered with made me feel a bit uncomfortable. As a broker who represents buyers, I am never afraid to ask the tough questions. It's never personal. I have a client whom I am looking out for and I want to know all there is to know. That said, the listing agent usually understands this and it remains a business conversation, although we may disagree, we understand we are representing different interests.

Back to the house, where an owner and a buyer (me) are conversing without agents involved. As I pointed out the proximity of the neighbors, the condition of the pool and the fact that both bathrooms and the kitchen would need to be replaced things got a little tense. But when else was I going to start laying the groundwork for our offer? We stood in the kitchen and I began my build up to our offer...awkward! Lol. He didn't feel our renovation plans should be factored into the purchase price, I disagreed a bit on this and felt of course there had to be an adjustment, perhaps not dollar for dollar but an adjustment none the less.

Anyway, no need to get into the entire discussion/negotiation. The point is it was quite uncomfortable negotiating directly with the seller. It was his home, of course he was going to take it personally. I really believe the process (most of the time) is more efficient when both the buyer and the seller have representation. I created a company to address the concerns people have with the compensation model but whichever model you use-I think you are best off with your own agent. I know I prefer having my own agent representing my interests, a buffer to relay my comments to the sellers agent.

In a current deal we are involved with, I had asked for a very delayed closing date for tax reasons. I knew the seller would probably not like hearing this but I explained it to my agent who then was able to inform the seller's broker. Of course the seller was not thrilled but at least her agent was able to explain our situation clearly and act as a buffer.When I had tried to discuss this point directly with the owner/seller of the other home, he just balked and said "no way" before I could give him the full picture. What a difference it was to have my agent discuss my needs with the seller's agent without any emotional noise getting in the way. Thanks in part to their teamwork, we are now in contract.

I am the first one to tell you there is no one way to buy or sell a property, this was just my experience and two cents on the issue of agent representation.

Friday, November 18, 2011

Apartment Inspection; Yes, No, Maybe so?

This was my post in answer to a question posed in a real estate forum. I feel like it encapsulates the question of inspection.

I am not convinced an inspection (of a typical co-op) is worth anything more than peace of mind for the money spent. This has also been the feedback from most of my clients that have utilized their service, post inspection. Most of the things that will be uncovered are usually quite obvious. I also don't see the need of an inspector going into the basement of a 200 unit building and "inspecting" the massive boilers.In a co-op that is fiscally sound they will have the means to make repairs on the internal elements such as wiring, plumbing. Most of the important information will turn up in a review of the building minutes and by asking the managing agent for information on the age of the roof, boiler and elevators (though elevators can run for a long time with proper care and rebuilding). Also ask when mandatory facade work will be required next.

If you are purchasing a prewar co-op you will want to know about the plumbing and more importantly the electrical wiring, simply ask the super. many older buildings will have a hard time keeping up with modern electrical demands, some good info here.

For smaller buildings(especially 6 units or less) or condos where you are responsible for the HVAC system I always think an inspection is in order. I would also want an inspection/engineer/architect to have a look if I were doing a gut renovation of any "estate condition" home.

The inspections that I have been part can cost from $500-$1000 dollars. Perhaps a small price to pay for that peace of mind at the end of the day. But don't expect much. That said if a client requests an inspection I would never challenge it, but I do give my opinion if asked.

Wednesday, November 16, 2011

When is it Too Late to Engage a Buy-Side Broker?

In my opinion of course, it is never to late! And in most cases, even after the buyer has had direct contact with the listing broker and has not yet disclosed whether they had their own representation, it is usually still OK. But there are some exceptions. Just recently a buyer contacted me after viewing a property on his own and making an offer because he was suddenly feeling very uncomfortable with the prospect of having the listing agent also representing his interest (dual agency) especially when it was made clear to him he would not receive any financial advantage for going it alone. This all took place after just one viewing and a brief contact with the listing agent.

So he contacted me after a friend told him about my buy-side representation model. When we spoke he assured me that the listing agent had encouraged him to find his own broker (generally most tried and true pros take this approach). I asked because I know getting involved this late in the game can raise some eyebrows. Well, to make a long story short, the broker admitted that she did advise him to seek his own broker but failed to disclose that she would not share the commission. He would have to pay me himself.

Let's just say this did not go over very well with my client.

I want to keep this short so I will spare any additional details. My point is: if you plan to engage a buy-side broker or are even considering it, it is important to make your intentions known to the sell-side right away or at least at your initial physical contact. Don't jeopardize your right to your own representation, even if you just make it clear that you have not decided on a broker yet but do plan to bring one in. This simple gesture will keep the door open and alleviate any potential issues down the road. I would advise at the very least while at an open house to write in "Broker to be determined".

As a listing broker I have had the experience of working with a client who starts a negotiation...only to have a broker suddenly appear to represent them. Sure it can be annoying but I always took the position that they were entitled to it and NEVER would have suggested I would not co-broke/share the commission. As a listing broker I wanted the best for my seller; I also wanted the buyer to be happy. If you are successful in this business you are thinking about the big picture. At the end of the day I would guess that 95%+ of all deals are done with two brokers anyway.

Look, I understand why a listing broker gets annoyed when a buy-side broker is brought into the game late. I have been there. But sometimes a client just doesn't understand that purchasing an apartment without a broker directly representing their interests in NYC can be daunting especially after reading the Agency Disclosure. I can assure you with 99.9% certainty that you will not gain an upper hand financially or any other way by going it alone. So take your time and find a buy-side broker that you are comfortable working with. A good broker can be a great help when it comes to finding your home, understanding its value, weighing the pros and cons and putting together a solid strategy to negotiate the best deal.

Remember, the listing broker can not provide you with any critical information about a listing they exclusively represent. Of course you can also go it alone if you choose but just remember to do your own due diligence thoroughly because you will only hear the positives from the list side since they have a fiduciary responsibility to the seller.

Saturday, November 12, 2011

Entrance to Tigers House Jupiter Island, Florida

I know this is a bit cheesy but I am a big fan so couldn't resist a photo op on our ride towards Hobe Sound.

Wednesday, November 9, 2011

Big Wave Surfers! A Little Break From Real Estate

A Portugal Monster!

There are Options; Which is Right For You?

3 ways to pay lower real-estate commissions - MSN Real Estate

The customer has to come first in a real estate transaction, both the buyer and the seller. When a broker aligns themselves with what is best for their clients, everyone benefits in the long run. By always putting my clients best interests first I have built up a strong 100% referral business and a very loyal following. If at anytime a client feels I am not adding any value to their transaction, I will step aside with no questions asked. And if I ever were to get a feeling their needs would be better served without my involvement, I would explain why and remove myself.

We are in the service business and a good broker will have enough business that they can focus on the ultimate needs and satisfaction of their clients even if it will cost them financially in the short term; I focus on the bigger, long term picture.

My clients are thrilled by the level of service they receive along with the rebates that maximize their purchasing power and reward them for their participation. I stress this is model is not for everybody and there are certainly many very qualified agents who provide a more traditional service model. But having choices is always good for the totality of business, always good for the consumer. The US Department of Justice agrees; they take Anti-Trust violations very seriously and have been systematically suing Multiple Listing Services around the country to compel them not to discriminate against alternative business models that benefit the consumer.

It's a big sandbox and there is room for all of us; if you are good at what you do you will succeed in this business regardless of what kind od brokerage you work for. I understand the plight of the broker in NYC with all the perks and pitfalls that it comes with, I have worked as a broker here for almost 22 years.

Happy home hunting!

Monday, November 7, 2011

This Rebate is Buying a New Kitchen!


I will celebrate after I sleep! Been crazy busy the last few weeks. BTW your rebate check is paying for my new kitchen! You have to see it when it's done.


Last four weeks have been fast and furious! Four closings, two new signed contracts, walk through's, board packages and a couple of stressful board interviews (especially for my clients!) You'll never hear me complaining about too much work. My clients continue to make some very good deals, we have had some very successful negotiations completed.

But What I really love is when a client gets their dream apartment and in this case the commission rebate will pay for a new kitchen. If I had a Secretary I would certainly have him answer our phone with "It's a wonderful day at The Burkhardt Group!" Lol.