Anchor Associates

May 2013 residencyNY Roundtable

Diane Levine Sotheby’s International Realty, Senior Vice President/ Brokerage Manager
Frederick Peters Warburg Realty, President
Tresa Hall The Corcoran Group, Executive Vice President, Director of Sales
Gary Kiyan Anchor Associates, Senior Manager

 

1) What is the most important attribute you like to see in a seller when listing their home?

Diane Levine: With sellers it is important for them to have a plan for where they will be moving to next.  When a seller wants and needs to get on with their lives, whether because they are moving for a reason, like an addition to their family or a job promotion they are more receptive to the offers that they receive.  They will focus on what the buyers present to them vs. just thinking I want to achieve “x” amount.  Their thinking shifts from I’d like to get a certain amount  and I’d think about selling to what are the buyers willing to pay at this point in time.  When agents  have a handle on the seller’s real motivation and time frame, they have a better chance of persuading the seller to act.

Frederick Peters: Realistic pricing – hands down

Tresa Hall: The two most important attributes to look for in a seller is their motivation to sell and their willingness to price the property to sell.

Gary Kiyan: When a seller has  realistic expectations of what the market can deliver that always makes it better when creating proper marketing, and in the negotiation process for bringing about a solid transaction. In addition when the seller understands the partnership aspects of the relationship when it come to more linear points like staging, touch up work and showing schedules, these basics create deals.

2) What are some of the key qualities a prospective purchaser should see in a real estate agent?

Frederick Peters: Several qualities: you need to find an agent who can fully contextualize your purchase economically. So it must be someone with a breadth of market understanding who is capable of giving you adivice about what to go for and how aggressively to go for it. These days, with so many properties going into multiple offers, that information is critical. A good agent should also always help you to prioritize your need and determine where you have flexibility – is it size, is it location, is it price? That guides the search

Tresa Hall: A purchaser should expect that their agent is diligent is searching for properties and educating them as to the information that they have found on websites.  They should also expect their agent to communicate regularly and respond immediately to their phone calls, emails, or texts.  Their agent should be a good negotiator and should be knowledgeable in every aspect of the real estate transaction.  They should feel comfortable that they can trust their agent.  And they should believe that the agent has their best interests at heart.  They need to know that their agent CARES about them.

Gary Kiyan: A consumer who has or is willing to be educated as to the true state of the market is always great to work with; in addition, a purchaser who understands the partnership and agency relationship aspect of the procedure is something I relish as well. Real Estate sales negotiations is an art form, so when a purchaser can work in harmony with the agent I find that great transaction come from this approach, which points to the concept of trust, which is not the easiest thing to find or achieve in a “caveat emptor” business. In this market a buyer who understands the pace of the deal and or the transaction is another blessing when it is present, these are the qualities of my dream purchaser.

Diane Levine: Prospective purchasers will do best with a real estate agent that can explain what is happening in the real estate market, knows details of the apartments that they are suggesting for the client, listens and ask questions of the buyer so that they help the buyer identify what they want and need and who work diligently to make it happen.  The best agents care more about their clients vs. just doing a deal, they are hard-working and determined.  They return your calls and are actively guiding the buyer to proceed in a certain way, as the looking and buying process proceeds.

3) What are some of the most sought after locations today? Why?

Tresa Hall: There are many sought after locations in NYC today.   Chelsea and many of the downtown areas are extremely desirable in today’s market, in part because of some of the new developments.  Brooklyn Heights, Williamsburg, Park Slope are sought after now.  All of these areas are popular for their neighborhood feel, easy access to transportation, restaurants and are considered to be “hip”.   Following new developments is the indication of sought after locations.

Gary Kiyan: Well the way the market is at present; locations with inventory are popular! All real estate humor aside, in my present environment I am dealing with many first time home buyers so, I saw a number of transaction from Murray Hill to the upper eastside in deals from 750k and down. In addition we saw strong demand in the financial district for one and two bedroom activity. Of course downtown in general shows strong demand ( which is typical) for Soho, Tribeca and the West Village remains in tact however with a shortage of product and the high demand has created a very fast paced and competitive environment, which must be navigated.

Diane Levine: New York City is the place to live—we have everything and more.  As an international company, the Sotheby’s International Realty agents get enquires from around the globe.  Foreigners are interested in neighborhoods that they have heard about abroad like Columbus Circle\Lincoln Center, Greenwich Village or Soho, which give them access to the excitement of the City.  If they are investors, they are also interested in value and growth.  Many are now asking more about Brooklyn and Harlem.

Frederick Peters: This is an impossible question to answer, as increasingly all of New York is sought after. There is no undesirable location in Manhattan any more – it just depends on what you want. People are fighting over brownstones all over Brooklyn. Each neighborhood has its charms, and whether it is artists in Bushwick, young professionals in Harlem or Beaux Arts lovers in Bed-Stuy, there is a place for everyone.

4) What is your take on some of the reality shows that portray NY real estate brokers.  Are the shows accurate?

Gary Kiyan: Well it certainly shows that we are in an entertaining, fast paced industry, this type of venue presents a bit of a personified version of the best and worst qualities of the  Real Estate professional, while I have seen similar scenarios develop on some of the more high profile transactions I have participated in, some of it is beyond the realm of many of the day to day deals I see. As long as there is some voice or attention to the fact that, honest professional service and consultation is the true cornerstone of our business I am comfortable with the shows.

Diane Levine: We, working in the real estate business in New York City, are lucky to be able to see the most luxurious apartments and to represent many of the most diverse, interesting and wealthy people from around the world that want to live in our city. The reality shows allow us to share these special spaces and  what our business is like with all that it includes: the excitement, stress and sometimes unusual behavior.  Although it is never “real” to condense a process that can take months into 30 minutes (If only our deals moved so quickly), it would be great to tell all involved we need to be done by the next commercial break.   Watching these shows have brought some great new talent into the industry.

Frederick Peters: Well, we have participated for years in “Selling New York”, which did a pretty good job of portraying the highs and lows of real estate brokerage as a career. I have been unenthusiastic about the mac ho/shark portrayal of agents on “Million Dollar Listing”, but I guess it sells ad space.

Tresa Hall: I don’t really call these shows “reality” shows.  I don’t think they necessarily shed an accurate light on real estate agents.

5) Imagine that interest rates increase from 1 to 1.5% above their current levels.  What impact will that have on the purchase market?

Diane Levine: Being in the business over 25 years, in the past, I saw a buying frenzy when interest rate first start to raise as buyers tried to jump in before rates went higher, followed by a flattening of prices, as buyers felt they couldn’t spend as much because their monthly payment would be more.  However, in New York City now since at all price points more and more buyers are “all cash” and not depended on financing – all bets are off.

Frederick Peters: Even at 4 or 4.5% interest rates will still be historically low. It would undoubtedly remove some purchasers from the mix, but with inventory shortages at their current acute levels, it would probably not have too chilling an effect on the market. And honestly, a little LESS intensity in the market would be a welcome experience for buyers and agents alike.

Tresa Hall: I believe that a small rise in interest rates would encourage the buyers to move more quickly before the levels were raised more.

Gary Kiyan: We are in a market where the lending rates are some of the best we have seen, and these rates along with the hope of an improving economy are definitely having a favorable effect on the market place. I do not personally think that 1-1.5 percent will kill the golden goose, however as interest rate rise it will gradually effect some pricing and when the point come that overall inflation kicks in, which is typical on the backside of a recovering economy, at that point we may see some deeper effect in the market.

The bottom line is; the less expensive an overall transaction is, more people can buy. So, while the luxury market may go unaffected, the median and lower parts of the market feel the effect more as interest rates rise, yet at a  1-1.5 percent increase I would still be confident.

6) Are you seeing an increase in demand for second home purchases?

Frederick Peters: I don’t think we currently see much of an increase. Ever since the recession began, flight capital from Europe, South America, and Asia has been making its way steadily into the US. That continues to happen at a high level. Bricks and mortar in New York seem very appealing to wealthy multinationals looking for a safe place to invest. In addition, we see many well-off Americans buying second, third, or fourth homes here. But I don’t know that this is an increase in demand. I think this demand has been here for a while.

Tresa Hall: We have definitely seen an uptick in purchases in the East End (Hamptons, Sag Harbor, Amagansett, Montauk and the North Fork).  Second home purchasers are definitely back in the market.

Gary Kiyan: Yes, actually I am seeing demand in almost all aspect of the Manhattan market, these types of deals are on the rise as well as empty nesters downsizing and taking advantage of market conditions. We see a risein second home purchases for the domestic and international market place at this point in time.

Diane Levine: As the manager of the Downtown Manhattan office of Sotheby’s International Realty, I have the responsibility of reviewing board packages on all our deals.  Most of the packages I reviewed in the first few months of this year were for primary residences.  There are a lot of first time buyers jumping in at points up to $2.5M.  Agents are reporting that many clients would consider buying up, if they could find something (hard in this multiple bid market).  Since you asked about second homes, I checked with our Hamptons offices and they have been reporting an overly brisk sales , significantly higher than the same time frame in 2012.  Most of their sales are second homes.

7) How do you advise a purchaser who is involved in a transaction where there are multiple bidders?

Tresa Hall: I would tell them that they should give the absolute highest price that they could and if they lost the bidding war at that price, then they wouldn’t be distraught at losing it.

Gary Kiyan: So many deals are going through this process right now and managing the purchasers expectations of the market are key in our present environment. It is a bit of an art form to give the purchaser an experience where they know the agent is vigorously representing them, when there is not that much give on pricing. Indeed, some buyer have to lose a unit during negotiations in order to understand the true will of our present market conditions. If I think a property is fairly priced I will advise my purchasers to be mindful of this point and refrain from attempts at hardball negotiations. Make reasonable offers if not full price and above asking price in some situations.

Diane Levine: As soon as there is more than one “real” buyer, the advantage shifts to the seller.    In order to level the playing field, a buyer and their real estate agent need to be prepared.  Buyers need to review and be prepared to present themselves financially in the best light -what they can spend, how much they can borrow.  When a property which meet the client’s needs hits the market, the buyer needs to act swiftly. The sooner they get in to see it, the earlier they can complete their due diligence and make an offer.  When bidding goes over ask, after the agent provides input as to current value of the unit, the buyer needs to think long and hard to answer- at what price if they lost it would they be kicking themselves.  By sharing details of other current negotiations, the agent needs to help the buyer truly understand the speed with which they will have to move.  In the market we are in, the buyer often may have to decide on the biggest purchase of their life are being in busy open house for a few minutes.  And we think our job is stressful.

Frederick Peters: Go high. And write the seller a letter about how much you love the property. It is amazing how effective those can be!