Sunday, June 29, 2014

We Love Our Clients!

We don't post these endorsements just because we want to toot our own horn, we are a small firm that relies on 100% referrals for business. It is certainly our nature to want to provide the best level of customer service. We are also aware that in this culture of instant information we have to hold ourselves to very high standards. We keep it simple; honest, transparent service comes before our commission.
"Dear Keith and Christian,

Thank you both so so much for all of your help and support!! We have had the best experience working with you, and are truly grateful to have met people who are not only reliable and professional but are also extremely personable and carrying. We will be the first to recommend your services to anyone interested!

Renovation will hopefully start in the very near future. 
An invite for a house warming to all New Yorkers/Brooklynites will follow:)

Take care,
           Y and J" 

Saturday, June 21, 2014

Pre approval v. Pre qualification

In this market cash is king, the next best thing (to get the attention of the seller) is submitting an offer not contingent on financing.

For those who cannot/won't do the above, a pre approval is the next best thing. It's important to let the listing agent know you are pre approved and all the bank needs to do is order an appraisal (make sure the subject building is on the lender's approved list as well).  Those with enough extra cash will make their contingent offer not subject to an appraisal.

From the New York Times;Promoting Mortgage Preapprovals in Competitive Markets

Wednesday, June 18, 2014

Best and Final is the New Black

I would estimate that 97% of all the apartments we bid for on the behalf of our clients end with a call for best and final bids. For lack of a more eloquent way to put this; it just sucks (if you are a buyer). There is no magic formula for success, but certainly being all cash or non-contingent on financing increases your chances for a successful outcome by at least 60-75% in my humble opinion. If you are going in with a contingent offer, you will have to beef it up a bit if you are made aware that there are cash/non-contingent offers on the table (we must trust the listing agent for this information). So some more speculation on my part; you need to beat a cash offer/non-contingent offer by about 3-5% to have a reasonable chance of success if you are contingent on financing. This is what it will take to get the sellers attention away from the other offers.

One other thought. When presenting your best and final offer, really make it your best, you may not have another opportunity to bid. Unfortunately best and final is not always final,  we have witnessed some crazy scenarios after the fact. Yes, some sellers will kick an accepted "winner" when a disgruntled 'loser" re-bids with a big number. As one seller said to me "I may lose a weeks sleep over this (telling a buyer who's offer he accepted after a call for B and F) that they are now out after accepting a much higher bid. That said, many sellers will stay the course with the bid they accepted as a matter of principle.

It remains a difficult market. Just stay persistent and stick to your guns, we are getting deals to contract at reasonable valuations.

Monday, June 9, 2014

Market Update June 2014

You know where to go for the hard data, this is my anecdotal view of where we stand. 2013 was a strong market for sellers, that said we still were able to get a large percentage of our offers to contract. I was of the opinion that things would temper in 2014; they did not! They actually accelerated at a rapid pace; just as those who purchased in 2012 looked smart, those that pulled the trigger in 2013 looked pretty smart as well. 2014 came in like a lion, right out of the gate we were slammed, 14 offers in January, I think we got two of those to contract.

The market continues to be very challenging for buyers, along with low inventory and what seems like a 10:1 ratio of buyers/listings. It is also just about impossible to get an offer accepted that is contingent on financing, cash remains king, however it is not getting you a discount, its simply getting you to the finish line.

I was just saying to a client that I feel like there is a little let up in this beast of a market, we put about 6 deals in contract over the last few weeks, things were feeling just a bit easier. Then I read that the StreetEasy condo index recorded a negative reading in April, down 1.29%. is this the beginning of a more pronounced trend? I wish I knew, however I don't think so. My thoughts are that buyers are beat up, tired, it's exhausting as anyone that is hunting for a new home knows, how many "best and finals" can one human being endure?

For the most part I am very impressed with the way the NYC brokerage community is handling this market, most with great compassion. Listing agents know what it is like to be a buyer out there and have been gracious, informative and in some cases very creative with taking bids. We participated in what was my first auction, for lack of a better word. We were at the point where typically you would expect a call for "best and final bids", instead the listing agent informed all bidders she would would ask us all for our bids, then post the results via email updates to all participants along with the terms of each offer. This went on for about 4 or 5 exchanges until we had a winner and guess what? That was us! Our clients actually liked the transparency of the entire process, I was skeptical at first but wound up appreciating the process (and not just after we succeeded!) We are all about 100% transparency, so this was very intriguing to say the least.

A sample of one of the emails for the "Best and final auction":

As of right now here are the current highest and best offers. I am sending the same email to everyone so you will see your offer in there.   Please let me know if you would like to raise your offer or your percentage down.  I would like to start wrapping this up so let me know asap if you are planning on raising your offer or staying where you are.  

In order of offer amount:

$610,000 (20% down)
$600,000 (33% down)
$600,000 (27% down)
$600,000 (25% down)
$600,000 (20% down) x 2
$550,000 (50% down)

As I was saying lot's of props to the NYC brokerage community!  That said there are still some real skunks out there and this market makes them stink even more. How they succeed, let alone sleep at night, I can't tell you. But it becomes very clear they care little about their clients best interests or that of the buyers, they are just interested in their own interests. I have been interviewed a few times by the NYS Attorney Generals Office, they are very concerned about any possible anti-trust/anti-competitive practices in the NYC real estate market and have asked me to call them if I encounter any thing suspect. I came very close recently :)

I have not been writing much lately as we are just overwhelmed, normally clients purchase as new clients come on board. These days the ratio is way out of line as it has become very difficult to get to contract. As I always tell clients I have no clue about what will happen in the near term, but I am confident that the long term trend for NYC real estate is very bullish!