A Word about "Buyer-Brokerage." Click below.....




Needless to say, there is a lot of mis-understanding about Buyer-Brokerage, but, at the end of the day, if your broker isn't asking you to write them a check up front for their time and service, I cannot imagine what the hesitation is.



NEWSLETTERS

Greenwich Residential Newsletter  

Palmer Point Newsletter - August, 2007

Havemeyer Park Newsletter

FORMS

Exclusive Right to Sell Listing Agreement

Exclusive Agency Listing Agreement

Exclusive Right to Lease Listing Agreement

Residential Property Data Input Form

Keybox Authorization Form

Residential Lease

Property Disclosure Report

Buyer Broker Form

MARKETING

When considering selling, owners really have to come to grips with who your buying market really is. Too many sellers think an Investment Banker is going to buy their home, when it is really more suited to the local contractor - for conversion to a two family! This is critical when it comes to marketing your property. It is going to do little good to advertise your two family home in the Wall Street Journal or the New York Times. Ditto for homes under $1 million.

Too few Brokers and Sellers consider who their real target market is. They typically go on a wing and a prayer!

ACCESSIBILITY

Probably the most underappreciated aspect of selling your real estate - accessibility. Too many sellers make it too difficult to show their real estate. You MUST have a keybox on your home in order for it to sell. Insisting that your broker go open the door and accompany the showing or selling broker is the kiss of death. This is a spontaneous business, and the more difficult it is to show your property, the fewer people are going to view it.

In practice, residential brokerage is a last minute business in which brokers don't have the luxury of being able to schedule appointments 24 hours in advance with any sort of precision. Sellers have to understand that they are going to have to be flexible in this situation. Besides, no one wants to hear the nickel tour by a droning broker about the "features" of a house. Save it, and spare us.

Conveyance Taxes  - What you should know, and why you should be contacting your State Representatives and Senators about it.

Town of Greenwich Tax: $2.50 per $1,000 or so-called " mill. "

State of Connecticut Tax: 

1st $800,000 - .005 or .5%

Any portion over $800,000:  .01 or 1%.

Sellers in Connecticut have to understand that there are significant tax implications when you sell your real estate.  

If you have loads of money, who cares? But, if you need every last dollar, it is very significant.




Greenwich Falls

Buying the listing or the home listing continues to be a problem in local real estate. This is the practice of telling people that there home is worth $100,000 more than the last broker who came through the door. Be aware! This accounts for why houses sell for 20% - 50% less than the asking price. Well, what happened? Answer: The market took an unpredictable turn. Whoa!  

TENANTS' RIGHTS LEGISLATION

CT passed a new law protecting you if your property goes into foreclosure. First, the foreclosing entity must observe the lease, as leases in general re law "run with the land." If you don't have a lease, you get two month's time to find a new place, then it's the bank's. Banks would probably be stupid to kick a good, paying tenant out, though.

RENTING IN GENERAL

Residential leases are becoming a pain to deal with, as they are twice as time consuming as negotiating a sale. The pay-off to the broker is paltry. The headaches are huge, and everyone wants to blame the brokers for everything. 

Legal Update:

The Connecticut Legislature has passed a law barring Landlords from taking pre-paid rent for anything longer than one month. So, you cannot pre-pay the first six or twelve months of a lease. Why? Supposedly, this protects unwitting Tenants from Landlord abuse. Supposedly.

Brokers are also being advised by their associations and the Connecticut Association  of Realtors not to draft leases. We are not sure how many brokers are going to take this advice, however.

Landlords, tenants, and brokers need to remember to account for all of the terms and conditions in leases. The Greenwich MLS preferred lease is quite specific about commissions for possible lease extensions and sales. Frankly, if a Landlord doesn't want to give a broker commissions on either of these eventualities, the broker shouldn't do business with them. It's that simple.

As indicated in the column to the left, brokers are increasingly doing very little to accommodate their fellow brokers, especially in guaranteeing them continuing compensation for extended lease terms, or, for that matter, the initial lease term. All leases should have provisions for brokerage compensation in the event the current Tenant buys the rented property.

Real Estate Update

As the Wilcox & Company Update below indicates, Greenwich still has off the charts average single family home sales compared to its neighboring coastal municipalities. 

Click on the image below...

As is also indicated, is the huge difference between the average selling price of homes in Westport and Fairfield; Fairfield coming in at about 50% of Westport. Fairfield, of course, sports real estate taxes that are about 35% higher than Westport's. Just don't tell Fairfield brokers about it.

Another interesting development in the brokerage community is the cuts in commissions listing brokers are foisting on participating brokers - big problem and not too intelligent. This practice started in Westport and quickly spread to Fairfield. It's reported that many listing brokers take a 6% commission and try to pay cooperating brokers 2%. That's not a very smart thing to do in a market like this....

Speaking of broker cooperation, I wouldn't say it's at a very healthy level. A lot of friction out there. It's mainly because of the dearth of brokers who actually know how to evaluate real estate. When you have two brokers who are fairly ignorant of the evaluation process, the result is big delays in making a deal. This is also the main reason real estate takes so long to sell. Leasing is a little better, but sales are always a problem. For evidence, look no further than the Helmsley Estate in Greenwich being listed for $125 mil, and selling for $35 mil. Who knows how many deals in between went by the boards?

Pricing continues to be a problem for both brokers and sellers. I say brokers are the big problem because they influence 85% of the pricing decision. The proof is in the pudding with the numbers for Greenwich, CT in 2009. Actual median SALES prices of homes sold were 25% less than the median ASKING prices. Furthermore, the average selling price of a single family home in Greenwich in 2009 was 18% less than the average ASKING PRICE. This tells a pretty big, but typical, story - overpricing continues to plague the Greenwich market.

I spoke to a broker the other day about a home she has listed in Old Greenwich, and I reminded her that she had the house listed for $1,000 per sq. ft., and that the prevailing non-new construction selling rate was around $645 per sq. ft. She didn't really seem to care. This is endemic throughout the brokerage community. Sorry.

Broker obsequiousness continues to be the problem of the day. Most real estate brokers just can't stop themselves from telling owners what they want to hear, and, in the process, creating unreal expectations. This accounts for slower sales and a very depressed volume of sales.

I remember when many of the big brokers in town were bemoaning the 50% drop in volume in early 2008, and wondering why? They knew the answer, but were in extreme denial. Brokers continue to keep prices too high, particularly at the high end of the market. Take the Round Hill Road area - please. The Helmsley Estate at 521 Round Hill Road, was always worth about $50 mil, but the listing broker went ahead and listed it for $125 mil. Well, you make the call. If you aren't in a hurry to sell, what the hell?

Brokers, who shall remain nameless, but we all know who they are, continue to price new listings at $1,200 per sq. ft., when Round Hill has consistently shown selling resistance at $1,000 per sq. ft. In fact, unless it is brand new construction, you will not get anywhere near $1,000 psf. By the way, there was just a foreclosure on Round Hill Road across from Moorland Road. Not a good situation. New construction in the RA-4 Zone in the Round Hill Road area never exceeded $800 per heated, livable sq. ft. This concept continues to elude many of the "In" brokers in Greenwich, which begs the question as to why some of the "big" brokers even get these listings in the first place. Odd, very odd.

Here is Wilcox & Company's latest New Construction Newsletter for Greenwich proper. 

Greenwich New Construction


Another issue to behold is the sales ratio of the homes put on the market in 2008, YTD, and it is appalling. Only 37 % of homes are selling that are put " on the market. " Something is very wrong with this, and we all know what it is; the public continues to use brokers who are all too easy to take on over-priced listings in the false hope that maybe someone will come along and pay a big price for the listing.  

This Greenwich Update dates back to March of 2008, but shows how high the average and median prices for a single family homes got.

Greenwich Update


Riverside and Old Greenwich continue to see the most "New Construction" sales in Greenwich. This is very good news in a market that has been problematic.

Riverside New Construction

Old Greenwich also continues to be strong in the new construction category. The popularity of Old Greenwich as a coherent, waterfront community is what is key in understanding OG. Riverside, while very desirable, isn't as attached to a village, as OG is, hence OG's popularity.

Old Greenwich New Construction

General Conditions:

New Construction of Office Product in Stamford continues to be the thing to watch.

Are they, in fact, finishing the RBS Building, or are they dragging their feet. The Anatares buildings on the Manger Electric site are in a go slow mode. Harbor Pointe, or whatever it is being called now (Antares), is going full steam ahead with a 400,000 sq. ft. office building on lower Washington Boulevard. The residential development is still in the ground preparation phase, and is not going to be a quick sale. Building and Land Technology is running this project now, and they are, in fact, reputable, high quality builders (Carl Kuehner). They are out of Norwalk and own three buildings just south of the Merritt 7 Corporate complex.


It is indeed a little slow out in the lower Fairfield County real estate market, with sales volume down anywhere from 35% - 50 % in individual towns and cities. Greenwich's volume is down by about 38%, comparing the 1st quarter of 2007 to the 1st quarter of 2008. The good news is that the Stamford/Greenwich area has been pretty slow for some time. Things have got to pick up - there is still a default rate of residential real estate activity that will always occur due to transfers and other family needs.

What is not so sure is the impact of the RBS relocation to Stamford, CT. There will be some benefits, but the impact won't be as great as the average " blue skies " broker contends. These overly soapy predictions about " bonuses " and " corporate relocations " are simply not true. It is time for the brokers, who just repeat the company line, to say nothing, and sell the down market.

PRICING CONTINUES TO BE A MAJOR PROBLEM FOR SELLERS -

EVALUATION of real estate continues to be a problem for real estate brokers. Many are just not that proficient at giving you an accurate picture of what something is worth.

They continue to believe that " It only takes one buyer to come in and fall in love with the place, for my price to be achieved. " Pure foolishness. " My house is special, so I will eventually get what I want." My this, My that - My nothing.

Rules for Pricing -

If sales volume is down by 16%, you better cut your asking price by 8%.

If you need to sell and the prevailing Days on Market for your price range is up 30%, then you should cut your price by 10%.

People who have to get x for their property are doing nothing more than engaging in fantasy. " I have to get this, or I won't sell. " Good, go list your property with someone else before you get more realistic about things. Then, come talk to me.

A lot of sellers have this line about a broker's committment to their sale or lease - the broker's being enthusiastic enough to properly represent the property, despite the fact that the broker has given the seller the straight dope. Such sellers are engaging in denial, straight out of a Psychology 101 course. Rationality and Common Sense are gone with these people. They are looking to blame the broker for their woes - and their lack of fantasy fulfillment. This borders on the lunatic. All of this plays into the nonsense of brokers continuing the craziness of putting up with untold amounts of crap for no money down.

Update:

Well, supply continues to outstrip demand, as summer and the continued Wall Street mortgage and asset backed securities woes continue. In many neighborhoods, you can now see two and three homes for sale at one time. Highview Avenue in Old Greenwich is a good example, where four homes were put on the market between $1.3 and $1.8 million in two weeks time.

One thing that many brokers and owners continue to complain about is the lack of signage on homes for sale. Greenwich outlawed signs a few years ago, saying that it cluttered up the environment. They have a point, but at what cost? Signs are a valuable tool in alerting the public and, particularly interested potential buyers, that a home is available for sale or rent. No signs takes away any sense of spontaneity, which is a hallmark of the real estate business. Signs additionally notify brokers from all over that a home is available. In a crowded market, signs are a valuable reminder that the place is still for sale.

Brokers and Sellers asking far too much for their properties continues to be a real problem for sales. The time it typically takes to sell a home is going up and up, and the sellers are nervous. They tend to blame their broker, but they should take responsibility for their plight. 

The market, in general, has been run up to all time highs, and it isn't only actual demand that has caused this. Brokers are more and more the biggest factor in the pricing of and expectations for real estate. There are now historically high numbers of real estate salespeople in the U.S. It doesn't take a McKinsey management consultant to tell you the number of brokers selling the product at hand has no relationship to its price. Bottom line: when you have so much overcapacity in brokerage services, as we clearly do today, the competition to list properties among this group is going to result in price inflation.  

One factor many ignore in the softness of housing prices, especially in cities such as Stamford and Norwalk, is real estate taxes, which are anywhere from 1.2 % - 1.5% of putative value. In Westchester County, real estate taxes are a minimum of 2.0% of value. The Towns with real estate taxes climbing the most rapidly are Wilton and Fairfield, where homeowners are seeing 1.2% - 1.4% rates on their values; very similar to their neighboring cities.

An issue that still plagues real estate people is what the actual square footage of homes is. The problem: Brokers don’t measure the heated, livable square footage of homes, and price the real estate accordingly. Instead, they add in the garages and storage areas to make the home look like a better value. Smart buyers insist on the real numbers. Remember, all properties are going to require an appraisal as a condition for acquiring a mortgage. You can ask, and even negotiate any price you want, but, at the end of the day, there is going to be an appraisal done on the property. If it comes in low, you can expect to hear about it. Low appraisals is the second biggest reason real estate deals fall apart; the first: failed building inspections.

DISCLOSURE(S)

At issue, particularly in the condo world, is the Owner Disclosure. And, what is the most important area, as well as the area of most concern to the CT Department of Consumer Protection? Financial disclosures relating to Special Tax Districts, Assessments, and increases in Common Charges. These items should be addressed by the owner on page 1 of the CT Homeowners' Disclosure Form, as well as the listing broker. Any attempt to thwart the disclosure of these or other items to a buyer or a buyer's representative is illegal.