Is anyone on this board planning to buy now?

ummm, okay

nyc10022
10 minutes ago
Sales records are public. Not sure how this is being considered "private" info.

What is not public info is the fact that the sellers showed such spectacularly bad judgement that UD uses them as an example of what not to do.

BTW UD, I am a fan but sometimes I think you make mistakes postig here on SE.

"Sales records are public. Not sure how this is being considered "private" info."

Exactly because sales records are public, people can find out who this "greedy" and "silly" seller is, who "held out for $200k on a $2mm apartment".

How would you like to be that seller?

Noah: I don't see an ethical issue, but IMO you might want to show more discretion as a simple matter of self-interest. I think most buyers and sellers prefer to do business with people who won't slam them on a public chat board if things don't go well - especially considering the degree to which an agent becomes privy to a client's dirty laundry.

The sellers' names are a matter of public record, and so are the various asking prices for the Citi Habitats listing and the later Corcoran listing. By adding a few non-public details, you've basically filled out a narrative that makes Mr. B-----y and Ms. G-----s look like fools AND jerks. Maybe they are, and maybe they aren't, but I don't think portraying ex-clients that way is particularly good for your business. (By the way, given that they appear to have dumped their Carnegie Hill co-op to pay full price for the "A" line at Ariel West, your clients may deserve more pity than wrath.)

> What is not public info is the fact that the sellers showed such spectacularly bad judgement

I disagree with that... plenty of spectacularly bad judgement is in the public record.... particularly in RE sales these days.

For what it's worth, the sellers gave the Corcoran broker the following testimonial:

"After having the apartment on the market for several months with a different broker, it was a pleasure to have Suzanne come in, find a qualified buyer and close within two months. She really marketed the apartment aggresively and it obviously worked. In addition her professionalism anhd (sic) knowledge of the market and real estate business truly impressed us."

According to Streeteasy, it took about eight months. Whatever... Two sides to every story, etc.

"I disagree with that... plenty of spectacularly bad judgement is in the public record.... particularly in RE sales these days."

Where in public records can you find that Mr. B-----y and Ms. G-----s turned down a $2.3mm offer for that apartment?

I appreciate lots of UD's insights, but in this case it's simply bad judgement.

West81st - your right. I should have only discussed the #s only as a response to HappyOwners original comment about brokers. And left out the specifics. That was bad discretion on my part. I take ethics very seriously, and when I did that I was simply describing a real life experience from a client who canceled my services. Ethics is a fine line, and I can tell you that in this business, I have experienced forms of unethical behavior so far & beyond what we are even discussing here; that when I wrote that I did not think it was an ethics issue, still dont. Nevertheless, now that I think about it, I should have used more discretion and discussed only the general scenario. It is my bad, I admit it.

That testimonial is quite funny. I guess I failed as a broker then with the bid I brought in.

UD: Stand-up post. Well done.

As for the testimonial, maybe they didn't see your buyer as "qualified". I dunno - people find ways to justify all kinds of stuff after the fact. Best to let it go, and I hope the folks ganging up on you here will do that. Again, thanks for your contributions. I value your perspective.

Well Ive been in this business 4 years now, and this is the first and only mention of a previous client who happened to cancel my services for getting a bid over ask. But Ill admit when I get too involved. I love this forum, you guys know that, and sometimes I get caught up in a discussion. Thats all. I enjoy talking and discussing with people here, and it fills my time and gives me a break from working. I learn from mistakes and this was a mistake. I just didnt realize at the time I posted.

Thanks, by the way West81st

> As for the testimonial, maybe they didn't see your buyer as "qualified".

I have a feeling that its more that they feel like buttmunches and are trying to make themselves feel better...

"407PAS - good luck selling without a broker. There is a reason almost all deals are done through a broker and a good reason that over 90% of deals are co-brokered. "

Agent Rachel,
Thanks for the well wishes, I will soldier on. I do not think that people should stoop to calling each other names on this list. I do not think it was nice for people to call you names. There are real people behind all of these monikers, we should treat each other with more respect.

I don't dispute that the world is as it is and that most people choose to deal through brokers. That's fine. I actually enjoy the process of selling and I especially enjoying meeting people, whether or not a deal is possible. If I employed a broker, I would lose a lot of control over what happens with how my apartment gets sold.

Anyway, I wish you good luck on all of your deals.

"I do not think that people should stoop to calling each other names on this list. I do not think it was nice for people to call you names. There are real people behind all of these monikers, we should treat each other with more respect."

I don't disagree... but I also consider lying, particularly when it affects probably the biggest purchase of a person's life, a transgression one million times worse. I'll take some name calling and some calling folks on that over peace and folks buying when it does not make sense for them because a broked lied and told them they'd be priced out later.

I think it is pretty clear that Mr. B-----y and Ms. G-----s are complete jerkoffs. Sounds like they got what they deserved - $300k less for their apartment.

I guess I don't understand the lying with regards to being priced out later. I must have missed out on one of the discussions. That line doesn't sound convincing to me as there are always other deals out there. I would settle for all of the numbers in a listing to be correct. I always see the language as taking poetic license with the facts.

I am more upset about how many people in the rest of the country got talked into taking bad loans with little or no money down, first and second liens at closing, etc. I am not necessarily blaming agents as it is pretty clear that there is plenty of blame to go around. Of course, people have to look out for themselves but, still, I can't help but think that a lot of people made a lot of money cheating other people, and all of this cheating facilitated by developers, agents, mortgage brokers, appraisers, loan officers, etc etc.

In one of my previous deals, my potential buyer was given outrageously bad terms on a loan, I don't remember the exact details now, but it was a terrible deal. The woman was a foreigner so it was obvious that the banker saw her coming and was trying to take advantage of her. I convinced her to run away as quickly as possible. I always found it funny that it was buyer and seller against the banker, haha. Once price is decided, I believe the buyer and seller are, generally speaking, on the same side.

> I am more upset about how many people in the rest of the country got talked into taking bad loans
> with little or no money down, first and second liens at closing, etc.

Didn't help that RE broker liars like this one told them RE would go up forever.

Without that misguided sentiment, the rest wouldn't have mattered...

"407PAS - good luck selling without a broker. There is a reason almost all deals are done through a broker and a good reason that over 90% of deals are co-brokered."

And that reason is that brokers have cartel-like control over the information in the market (not to mention illegal price fixing agreements). Control that won't last long in the Internet age. Low volume and increased information flow is a double-whammy to brokers - good luck. You'll need it.

While that last line may seem somewhat sarcastic, and it probably was meant that way, I legitimately do feel sorry for the small percentage of brokers who are honest, and who agree that a closed, price-fixed market is non-ideal. I realize not every single individual involved is responsible for the problems exhibited by the majority.

UD - I should have only discussed the #s only as a response to HappyOwners original comment about brokers.

I have no idea whether your example is a reply to me. Was the offer qualified? Who knows? They seemed happy with the second broker.

In general, sellers who can wait for the temporary period of credit restriction to pass (and the gov't will make sure it passes) will do better. No reason not to hold out.

Current co-op prices are fairly valued on a normal 18-20 price to hypothetical rent ratio. No reason to fire sale them because some broker wants a quick sale for a quick commission.

For me, the problem with the current system is purely based on the cost (6% of the sales price!) and what I perceive as a lack of value for that cost. For my little apartment, we're talking about over $30k of commission, way too much, in my opinion.

Now, I hired an agent once to sell a house in the suburbs and the guy worked his tail off to get the house sold quickly and he did it. He installed sod in the yard, painted all of the kitchen cabinets himself, arranged to get the whole house painted at a great price, found me a good deal on carpet, etc, etc.

I am sorry to say that I don't see any of that work being done for me to get my current place sold in New York. Even if I hired an agent, I would have to clean the place before every open house and then wander the neighborhood like some homeless person while some agent said god knows what about my apartment. No thanks.

I don't see the agents selling their apartments any faster than I will sell mine so I will go it alone.

Now, if the whole real estate industry would adopt a fixed commission structure based on price brackets then maybe we could talk but they will not change and I will no longer pay their prices. I think their services are worth about 10% of their current price, certainly not more than my lawyer earns in the deal.

HO - yes I think it was in response to your comment. The buyer was real, extremely qualified, and was represented by another broker. But it doesnt matter now. Its over.

"In general, sellers who can wait for the temporary period of credit restriction to pass (and the gov't will make sure it passes) will do better"

I have a problem with this simply because we will never go back to the platform of credit and securitization that was in place during the boom years. Instead, heavy regulation is coming to ensure this never happens again. Sure the credit distress we see now will pass, but who knows what the world is like at that point, and what businesses died off. Look at corporate bonds right now compared to treasuries. Big time distress there and in commerical paper market still even after all the new facilities. CR talks about the A2/P2 spread today

http://calculatedrisk.blogspot.com/2008/12/a2p2-spread-blow-out.html

We are going to see many companies go away, unfortnately, as a result of this crisis, insolvent banks, tight lending, cash hoarding, balance sheet repair to stay alive, and soft consumer spending as the consumer is tapped out. This is a consumer recession that will lead to a business recession after. House prices will stabilize at some point, and reflect a L like patter for a number of years. Most people still argue this and expect a V shaped housing recovery. That wont happen because the platform of credit will not be remotely close to what it was during the boom. Thats the difference.

If you have a porsch, and replace the engine and guts with that of a pinto, well its not really a sexy porsch anymore. Deflation and contraction of credit is in place now and house prices are adjusting. For now its a matter of stopping the spiral at any cost, and who knows what pain this might bring us. Do people really and honestly believe that all this stimulus comes for free?

They say we have been in a recession for a year now. The economy is just getting worse. The only thing that would make me buy is if I could get a much bigger apartment than mine for the same money I can sell mine for. The prices don't seem to move down, so I think I will stay put.

UD -HO - yes I think it was in response to your comment. The buyer was real, extremely qualified, and was represented by another broker. But it doesnt matter now. Its over.

I'll take your word for it. No accounting for results in a retail commission business.

But I didn't say house prices were going to soar soon. Just that they should not crash based on current price/rents. Few deals will be done low, and then only now due to distress and illiquidity that will pass due to government helicopters. And that current normal co-op prices were justified relative to rent. If all risk assets revalue for higher future risk premiums than they could fall more, but they are not bad long term purchases at current prices. Neither are stocks or bonds, though they may also fluctuate short term. And the implied rental return is essentially tax free.

Sellers should hold out for more or less around recent comps and let buyer's life situations take over.

happyowner, you seem to think that only buyer's have "life situations." sure, there are some sellers who have no real need to sell, but the market is determined, now as always, by the inexorable supply of apartments provided by the notorious three ds: death, divorce, and debt. until people stop dying, splitting up, or borrowing, i think we can safely assume there will be plenty of sellers who do not have the luxury to simply hold out for an unrealistic price for as long as they want.

((the market is determined, now as always, by the inexorable supply of apartments provided by the notorious three ds: death, divorce, and debt.))

Yes, and let's add another important one to the mix: job loss/relocation. As more companies downsize or relocate positions to other areas of the country, folks will invariably find themselves forced to sell their apartments.

I think that 407PAS has an excellent point. When my parents sold their house in the suburbs the broker bent over backward to sell the house, truly earning her commission of 6%. No one in the family even thought to argue the commission structure because we felt that the value was evident. When I bought my new construction condo- the broker didn't even bother to read the prospectus and clearly didn't know much about real estate, despite being quoted in the NY Times on occasion. She got paid handsomely for posting to the NY Times web site and setting up some viewings. Had I not loved the apartment (it sold itself) I would have never used the broker. My apartment is a duplex- so I asked her if it was dual/multi-zone heating, she didn't know. When I asked her about what R-value insulation was being installed (I didn't have the prospectus at this stage- but it was in there), she didn't even know what I was asking about. When I asked her how the floor was constructed- she didn't understand what I was asking about. Now you could say that all of these things were isolated to one broker- I would normally agree, except that when I went to view other new constructions, I routinely encountered the same thing. I know in the case of my apartment the broker did receive the full 6% commission, but I felt that I was clearly paying for her awful services built in to the price of my apartment.

If the brokerage industry wants to keep its commission structure it has to do more to provide value- perhaps this downturn will shake out the worst realtors, but who knows. I feel that the For Sale By Owner Community hasn't been as successful as the brokerage community not because the brokers have provided so much value, but because the FSBO community has failed to find the best way to do business. I haven't spent a lot of time thinking about FSBO and I know the discount broker model hasn't worked well, but imagine there is a fortune to be made if someone found the right model for FSBO's. I wonder if someone has set up a company that caters to FSBO's a la carte- i.e. a service that provides flat rate fees for real estate photography, a flat fee for copywriting/marketing plans, a flat fee for creating a web site for the owner that is specific to cater to buyers, a flat rate for pricing/valuation advice, a package deal for all of the above, etc....just a thought.

let's be clear: broker commissions are not maintained by the market. they are maintained by the aggressive lobbying efforts of the realtors associations, who more or less own the state legislatures. selling real estate is not brain surgery or the law or even driving. there is no reason it should be subject to the sort of licensing and service requirements that keep prices high and discourage competition--they essentially destroy the possibility for price competition among brokers. it's an incredibly sleazy situation, and it has nothing to do with the market for broker services.

even if a new model is introduced, it would need the support of the FSBO's here to have any chance or else it will get squashed by the big brokerage players! There has been discount models introduced, but they havent generated great volume and thus died out, for most part.

You guys cant expect to have a great new idea be introduced, and just take off! There needs to be a real push to use the new service so that it is viewed as a threat by the big boys, and at that stage, there is a chance the model will get the publicity and exposure it needs to change the system here! But this new model hasnt come forth yet. Trust me, Im trying to think of it, and its not as easy as just introducing a flat fee turnkey product.

semerun,
You have come up with a lot of good suggestions. It's funny, I was also thinking about how the services could be broken down and monetized in different chunks but I know it will be hard to see any real change like this happen in the industry.

To be honest, there are very few FSBO sellers in New York so I doubt if anybody would take us seriously as a threat to the traditional model. I think you would have to see a large number of people starting to go FSBO in order for anything to change.

let me try and get this back on topic.

12 months ago, I told myself I might buy in 12-18 months. Partially assuming there would be some discounts, partially assuming I could commit living-wise (as opposed to maybe some travel).

12 months later - and the personal stuff hasn't changed much - I'm back to 12-18 months out, if not more. The initial decline, once it hit, was fast enough that now I'm thinking we've got some ways to go. I just resigned my lease for a year, and I figure I won't even think of looking around till next year.

So, short story, I'm probably even less likely to buy now...

glad we are back on topic
Particularly after seeing the discussion here, and considering my low rent apt ~2.3k for a 1500+ sq ft with heat and maintenance included, in the UWS, it is not clear to me that even a 30-50% drop from current prices makes it worth it to buy -- the clincher was looking at a few UWS coop prices and changes in the same apt price from 2001 to now.
While I have only checked 4 randomly selected cases, the average appreciation only works out to 10% per year. Of course this seems at odds with my perception that prices have been rocketing over this period. The 10%/year for 7 years = a multiplier of 2.08, so that is not terribly inconsistent with perception.
On the other hand, we do see a lot of new developments and condos that are much more expensive than these lowly coops that are now within my reach, and perhaps when these are factored in the average neighborhood prices go up a lot more.
Now we have a lot of inventory coming on, + the financial +jobs crisis.
A 50% drop takes us back to 2001.
It does not seem inconceivable.
So, if the prices go there, it does seem like a buying opportunity, until you realize that the maintenance + heat costs in many of these apartments exceed what I pay now for an apt that would easily market for $1.6-1.8 million today.

$2300 for a 1500+sqft apt on UWS - hmm, it would only make sense to buy if you could get that for 200k.

nyc10002 - You have a lot of company, trust me. I guess that puts the old ' but, there's sideline money out there waiting to buy if we drop 10%' saying to rest!

I personally enjoyed that one, and still do.

Absolutely. And I think I called that one out when it was said.

And, its not the sideline buyers staying put that are the problem... its all the folks now trying to jump TO the sidelines...

i'll be ready to buy once BB parks his helicopter in my building's backyard and pay his respects, like he does with AIG, Citi and the like. he will end up doing with the potential first time homebuyer. don't laugh, it's more likely than you think.

today i let my imagination fly... a new scheme seemed possible to get rid of part of the inventory overhang: providing new owners to the GSEs REOs (70k and 50k i believe). a public & free raffle among non home owners (preferably living within state limits) shown in PBS. it'll provide a boost to the declining homeownership rate, a boost to PBS viewership, a much needed decrease in inventory overhang and the feeling that at least some taxpayers are getting something back. i don't see why this would be more crazy than Paulson's Ebay auction of toxic assets. it's also easier to implement.