We Were Compared to Priceline??

I think we have all been there, the sort of uneasy feeling you get when you whip out that yelp coupon at a restaurant for the 'free entree'. Or in this example you purchased your hotel room at a deep discount via Priceline.

I always enjoy waxing poetic on our business model, to me and many others it makes a great deal of sense. It is about creating an alternative vehicle for transacting in real estate for a particular sub-set of buyers. I compare it to the effect that technology had on the travel business, financial services and even buying diamonds. Competition fueled by a desire to evolve.

To get back to the subject of this blog, I politely disagreed with this perspective client. When you use a service like Priceline the end user is feeling the pinch to their bottom-line for that particular transaction (though they should not be complaining. They signed up to participate and it filled an otherwise empty room).

With our business model I absorb the discount while the seller and listing agent all benefit without it reducing the sale price or commission. In fact the seller and agent benefit in two big ways; a happy buyer that is feeling very good about the transaction and the seller is potentially earning more from the sale as the additional grease to get the deal done is coming from me. And we cannot discount the important fact that our clients are very happy campers transacting with a business model they feel was designed for them. This is very key, this is a great byproduct of our model, very satisfied clients that work in partnership with us under 100% transparent conditions.

I created our proprietary business model based on all the negative comments I have heard over the years or read on the Streeteasy forum regarding the process of buying and selling real estate. We essentially did the opposite and gave buyers (and now sellers) exactly what they want. And after I speak with a new client for the first time, that is exactly what I hear.

The proof is in our success, over 50 transactions in 2016! And take a look at our testimonials.

Keith Burkhardt
917.770.4951

Incentives Given To Lead Brokers to Water???

Even in this rather strong seller market there are properties that need a little push to get them sold. Developers feel that incentifising agents with higher commissions or other bonuses will make agents lead you to these properties. Personally I'm not so sure this works. I've always taken the position it is better to simply lower the asking price or provide the incentives directly to the buyer.

What do we do you ask? We give any incentives offered by developers back to our clients. Simple.

You Asked For It: New Listing Model for 2017.

The brokerage business has evolved, both buyers and sellers want more options. When I started The Burkhardt Group over 9 years ago with a focus on buyers, many said it would never work. Last year we closed $80,000,000+ in sales.  This service will be geared towards those sellers that have homes that more or less sell themselves. Where there is not a need for a large firm and its vast marketing reach and finances. 


Listing Service Proposal

Primarily, we are looking for those homes that seem to ‘sell themselves’. If a listing hits the market with multiple bids after the first open house, this is a function of the market, not the listing agents. We want to offer owners of such homes an appropriate brokerage model that accounts for this dynamic and offers an appropriate commission structure.


We will be selectively curating the homes we decide to list and providing you with an accurate valuation along with a strategy that will guarantee a successful and efficient transaction. If you believe you have such a home, please call me to discuss and I will gladly explain why ‘who you list with is’ is just a matter of subjective preference. While receiving multiple offers after an open house can be satisfying, the sobering reality of the considerable transaction cost can most definitely suffocate the elation!

To help remedy that, our basic listing formula has been developed as follows:
3.75% commission, 2.5% to buyer agent (includes us representing a buyer). Direct deals 2% (no buyers agent). Professional photos are provided and the seller pays for floor plans if needed. Exclusive agreements can be cancelled at any time and past clients aren’t protected in the event of a cancellation. This is for full service representation.


Additionally, the following services and amenities are provided:


1)  In-depth valuation report.
2) Detailed feedback on showings.
3) Assistance with staging.
4) Email blast to all REBNY brokers with setup sheet and link to listing pages.
5) A pragmatic selling strategy that ranges from starting listings at market price to slightly soft in order to immediately attract buyers and fuel more frenetic bidding.
6) Three open houses for the first week: Sunday, Monday, Wednesday.
7) Listed in RLS, Streeteasy, Zillow and Trulia.


But most importantly, we will never give you any bull. Instead, we always offer straight talk on what's happening.

In Summary

Remember that 95% of the selling comes from the buyer’s agent; what does the listing agent do? Call me for a detailed explanation of how the brokerage business functions and why correct pricing and current market conditions are 90% responsible for an efficient transaction.  


We revolutionized the buy-side experience, adding value in dollars and sense. We are now ready to do the same with the listing experience.


Best,
Keith Burkhardt


917.770.4951

Real estate commissions cannot be fixed and are always negotiable.

Great Read from Urbandigs:2017 off to a Great Start!

This certainly mirrors what we are currently experiencing. The market is very active, buyers will bid aggressively for quality homes that are priced correctly. The cream is rising to the top however not everyone is coming along for the ride.

New condo inventory is not moving as quickly as similar resales, however pricing remains firm and developers are excercising patience. There is some room to negotiate, however surprisingly limited to a few buildings. Some new developments have begun raising prices (50 Greenpoint Ave). We are seeing some wiggle room on buildings that have been on the market for 6 to 12 months and are struggling to move that last bit of inventory. However you are getting the scraps and they're not cheap. If one of these unsold units works for you, you're in luck.

https://www.urbandigs.com/blog/2017-off-to-a-good-start-but-watch-out-for-condo-yoy-price-trends/

We Are Starting 2017 off Strong! Which Means Our Charities Are Also Benefiting!

We continue to financially support the good work of The Henry Street Settlement and New Life 4 Kids!

 

   

Mini Market Update

There's no weather report in Aruba, it's always the same. Today is no different in the NYC real estate market. It continues to rip!

The latest 'is this really happening' moment; all cash offer for 3 bedroom in the seventies near 1st Avenue. I'm told I'll have to wait a week before the seller will make a decision. Hey come on, we're all cash, this is a condo in a generic building by 1st Avenue! Nope, you'll wait.

Certainly new development sales are not quite as crazy. But you better be in early for the cream-of-the-crop listings in these buildings, they will be in contract sooner than later. Concessions? If you're willing to pay the asking price, you may get a financing contingency or perhaps some contribution towards the transfer taxes. But this is not a shoe-in by any means.

There certainly are some apartments in some locations that aren't resonating with the masses. And you pinch yourself when you arrive at an accepted offer under a traditional negotiating process. It does happen.

Low rates, the promise of a roaring economy, equity markets on fire (we're all feeling good when we look at our brokerage account). A very Layman's account of this phenomena; there's just a whole lot of people who want to own New York real estate and not a whole lot of it to go around. To be continued.

Keith
917.770.4951

Our End of Year Newsletter. What's Next?

January 28, 2017

Happy New Year!

Now that another 365 days are behind us, I thought I would provide you with some thoughts on where we've been, where we are, and what I think is in store for 2017.

To begin with, 2016 was a very good year for us which means it was a very good year for our clients. We managed to get about $80M in deals closed with about a dozen more contracts outstanding as we moved into 2017. If such a thing as a "normal" market exists, 2016 came pretty close to representing one. I believe it was the character Gordon Gekko (who paraphrased Ivan Boesky) proclaiming "greed is good", but with our model, normalcy is good (declining slightly with a dollop of seller anxiety even better!)

2014 to early 2015 has proven to be the toughest years for buyers. However, the good news is that although the going was tough, prices have, for the most part, actually risen since that time. So don't read this and think "Damn, great I overpaid." It is my opinion that no one who has purchased since The Burkhardt Group began representing buyers in 2009 has overpaid. I remember all of our sales and I can recall everyone operating with a cool head relative to time and circumstance.

We had a contentious election that looked to be wrapped up by Hillary until late summer. Around this time, perhaps coincidentally, we saw the market start to sputter. We talked to clients about the seasonality effect (NYC is a market of distinct seasons), but we could not ignore what I referred to as 'pre-election anxiety.' Then it happened, I fell asleep on election night at around 10pm and when I woke up and turned on my phone, there it was: "Donald J. Trump has won the election." We then saw the other side of that anxiety, the post election version. However, once equities started their move up, we saw a surge in buyers come out of the shadows and bid like there was no tomorrow. We logged in thirteen offers about a week post 'The Donald' with only three getting to contract. Bidding action was hot, all of a sudden offers we thought were a lock were being challenged by all cash, above ask non-contingent deals-- in December of all times!!! I had no rest in December.

In 2017, I see a steady market with what I think will be a slight bias towards buyers. There is no reason to think this market will 'crash'. That said, there are very few folks who can accurately predict a collapse; look at how many missed the signs pre-2008. Why fear a disruption anyway? It's always been an opportunity. The only thing I know for sure is the market goes up and down with the long term trend being up. Yes, it stinks to own any asset in a falling market, but as long as you can afford your payment, you can literally ride out the storm in the comfort of your own home.

Also, without getting political, some of the new administration's policies and people seem to be pretty pro-business (sarcasm). Will this unleash the dormant, so called 'animal spirits' of the American economy? Time will tell.

Over here in our little world, we are picking up where we left off last June (before the election anxiety/summer doldrums). We have a significant number of clients who remain committed to purchasing real estate. I am receiving a lot of emails and calls from buyers who are excited that they are seeing more listings available and are excited by the prospect of negotiating under 'normal' conditions instead of stressing about submitting a highest and best offer. Some of these buyer have been in hibernation since 2015 and are now ready to get back in the game.

I was happy to read Noah's summation of 2016 on UrbanDigs as I felt it was very much in line with what we were experiencing and communicating to our clients during this time. I have linked to his blog post here.

In summary, we saw some softening with new developments and were able to either negotiate a bit on price and/or closing costs on some units. Still this was the exception, not the rule.

I definitely felt that we made some very good deals on homes priced above $4M. Without naming names, I think all the buyers we represented did exceptionally well here.

We sold more studios homes this year than in any previous year and almost all below $500K.

We saw less softness in homes below $2M, however, it was a much improved market compared to 2014/2015. And when I say improved, I am referring to the ability to get to contract with less stress and interference from other buyers.

Overall, 2016 was a nice healthy market for our clients and we believe we will see more of the same for 2017.

UPDATE:

I wrote the above about 2 weeks ago, and here's what we are (in short) currently experiencing: a very,very strong market. Since the initial writing of this current newsletter, the real estate market has shown improved strength and thus we have struggled to get recent offers to contract. It is very competitive out there with renewed calls for 'highest and best' offers on many properties. This is not a completely widespread trend though, the strength we are seeing is mainly confined to the higher value properties. To clarify, in 2007/2014 we saw aggressive buying across all classes of homes (including pure crap). This current hot streak is limited to best in class homes, this is where we are seeing all the hyper-action.  So, let us see where this rally will take us, all things considered, this could be a very interesting year.

Dow 20K certainly was adding fuel to the fire. However President Trump is a wildcard and who knows what he'll tweet next or what executive order will be signed. When it was all about business the markets were loving what they were hearing and reacted. I think the President will learn (maybe the hard way) that running a private company and the US are very different things. One has to proceed prudently as all things are more interconnected than ever; where there is an action, there will be a reaction. Some (mainly re brokers) like to make the argument that a volatile stock market is a good reason for owning real estate. However in NYC the two are closely intertwined especially since down payments are significant, comp can be related to stock price and co-ops require large post close reserves. It is too early to know where we are going, but I think we need to pay attention to a number of things here. That said, I am hopeful for positive outcomes for the country. 

Thanks for doing business with us. 

Sincerely,

Keith Burkhardt
The Burkhardt Group
www.theburkhardtgroup.com
917.770.4951

304 Park Avenue South 11th fl.
New York, NY 10010