Barbara S. Fox

residencyNY Roundtable – Featured at the REBNY’s 25 Anniversary Awards Gala

Jim Gricar  Halstead Property, President
Dottie Herman  Douglas Elliman, CEO
Kathy Kaye  Trump Organization, Executive Director of Sales and Marketing
Barbara S. Fox  Fox Residential Group, Inc., President

1. The current real estate market is characterized as being “very low on inventory.”  Is this accurate? If so, how do you set realistic expectations for both a buyer and seller in this type of market place?

James Gricar: It varies from submarket to submarket, but yes, we are in a generally low inventory atmosphere.  The Upper West Side, for instance, is the tightest; the Upper East has a bit more breathing room in some categories.   This is, of course, most responsible for the rising prices we’ve been seeing across the board.  Expectation management is what sales is all about, so buyers require extra care and attention right now.  It’s quite likely that as a buyer, you may well lose out on an apartment you love.  Our agents’ advice is “If this is the right time for you to buy, don’t get discouraged.  Keep at it.”  And for the seller, it’s creating an atmosphere of negotiating power and desirability, but not arrogance.

Dottie Herman: Inventory rates are low, but so are mortgage rates. Listing your home now can help potential buyers qualify for lower interest rates on their mortgages. Likewise, buyers who are seriously in the market for a new home can take advantage of the competitive rates.

Kathy Kaye: In today’s competitive landscape, it is crucial to educate both the buyer and seller in advance so they are adequately informed about market conditions. Sellers are watching the strength of the market grow, buyers remain vigilant, and it is our job to manage expectations and set realistic goals for both buyers and sellers. The ultra-luxury sector in real estate has been particularly strong. There are once-in-a-lifetime opportunities coming to market right now and we are seeing buyers react quickly and ultimately reach into their pockets.

Barbara Fox: The market is at an all-time inventory low.  Buyers must be prepared to act quickly in this market environment when they find their dream property.  There isn’t time to mull over decisions right now, and buyers need to be educated in advance by their brokers on the best way to secure the property they want to buy.  Sellers need informed broker advice on pricing their properties in this kind of market — while not overpricing.  Overpriced properties still don’t sell, even in this frisky market.

2. Over the last 3 months, we’ve seen a gradual rise of mortgage rates.  Although we are still at the bottom, it appears as if many borrowers are on the sidelines.  Do you agree, and if so, has that affected the number of transactions that are closing within the luxury market?

James Gricar: I think serious buyers are moving forward, and if financing, often times proceeding to contract without a finance contingency in order to compete with all-cash buyers. For the comfortable buyer with good assets and a high, reliable income, but who still wishes to finance, going non-contingent is an option.  Where it’s roughest is for the buyer who can qualify for a mortgage, but is unwilling (for financial security reasons) to go non-contingent.   The sheer number of cash and non-contingent buyers is so high right now, making the market a frustrating (though not impossible) atmosphere for the buyer who wishes to make his purchase agreement contingent on his ability to obtain financing.

Barbara Fox: If many borrowers are waiting on the sidelines, I haven’t witnessed it. To the contrary, people are afraid the rise of mortgage rates will be greater, and they are anxious to secure mortgages prior to that happening.

Dottie Herman: Although the mortgage rates have been climbing, they are still low when you look at the big picture – and the rising interest rates are actually bringing buyers off the sidelines because they want to lock in at these rates. The luxury market is not tethered to mortgage rates as much as the entry-level market is. Some of the really high-end inventory is bought in all-cash deals.

3. How do you advise a buyer and seller to proceed in a transaction when the property appraises below the purchase price?  What steps should a real estate broker take to ensure the property is being listed at the right price?

Dottie Herman: When a property appraises below the purchase price, the appraiser is not always wrong.  The first step is to take a look at the appraisal for reasonableness because that will determine your course of action. If the appraisal is well supported and reasonable (very hard to see this when buyer and seller have already committed emotionally to the sale), then the broker might consider renegotiating the price to save the deal.

Barbara Fox: If a property appraises below the purchase price, it could mean that several things could have happened:  1) the appraiser relied on information which was not up-to-date with current market conditions; 2) the brokers didn’t provide adequate comparables for the appraiser;
or 3) the property was overpriced in comparison to other comparable sales (not unusual in the current market climate).  It’s a broker’s responsibility to advise his sellers about accurate pricing and to discourage overpricing – all justified by a study of comparable apartments in similar locations both recently sold and currently available for sale.

James Gricar: Proper pricing is key, but bear in mind that brokers use closed comparable sales to determine an asking price.  Those closed comps are reflective of deals that were struck 2 – 6 months ago.  With the market rising as it has been, choosing the proper price requires thorough research and frankly, some hypothesizing.   In terms of appraisals, we’re seeing less of an issue at present.  ‘Non-appraisals’ are generally more a feature of a declining, rather than escalating, market.  In 2009 and 2010, non-appraisals were a daily occurrence.

4. Certain buyers prioritize amenities in their search for a residence.  Which amenities are the most sought after, and why?

Kathy Kaye: Amenities are still incredibly important to today’s buyer and the offerings are more expansive than ever. In the ultra-luxury sector, buyers now have access to world-class chefs, restaurants, incredible spas and a number of other five-star offerings. At the Trump Buildings, for example, Trump World Tower at 90 stories boasts amazing views, an incredible fitness facility and is home to Megu Restaurant. Trump International Hotel & Tower at Central Park West is the only Forbes Five-Star and Five-Diamond hotel with a Five-Star and Five-Diamond restaurant in New York. These are just two examples which are the types of incredible offerings that are available to buyers today. Traditional amenities will always continue to be attractive such as a full service concierge, outdoor space and full fitness facilities.

Barbara Fox: I believe the amenities most desired by buyers are:  attended buildings (doorman and/or concierge or elevator attendant), washer and dryer either in the unit or allowed in the unit, fitness room pets allowed in the building.

James Gricar: This is, as you can imagine, very budget specific:  the more money a buyer spends, the more he or she expects in terms of amenities.  I think sexy building amenities are great and very useful in selling the ‘lifestyle’ of the building.  But in my experience, the amenity most buyers want is simple:  useable, well laid-out space.  That’s something every buyer, regardless of price point, seeks.

Dottie Herman: Big kitchens, SMART technology, high-end finishes, and concierge-style services (such as room service and spa amenities) are becoming more sought-after features.

5. What areas of the city excite you the most in terms of development potential, and are their certain projects that you are eager to show?

James Gricar: I’m particularly excited about the Hudson Yards/Far West Side   As a loft owner in the neighborhood myself, I look forward to more neighbors and services.  I think it’s the go-to value proposition in city real estate right now.  Gotham West and the surrounding condo conversions in the west 40’s are of particular interest.
Dottie Herman: I think the area around Madison Square Park and NoMad is really booming right now. There are some very high quality new development projects on the market like the Whitman and 10 Madison Square West that have seen tremendous interest over the past few months and I believe they are setting the pace for a very dynamic market in that part of the city.

Barbara Fox: I really love the fact that fabulous buildings are going up in the most unlikely spots around the city.  I like to watch the gentrification of those areas over time.  That’s exciting to me!

6. Have you found any success in using social media to market a luxury property? If yes, can you share the experience?  How important of a role does social media play in marketing real estate?

Dottie Herman: Social media is a very important component when it comes to marketing properties. It’s a great way for agents to communicate their listings en masse with an engaged audience. Platforms like Facebook and Instagram lend themselves so well to fabulous real estate photography. I have heard of agents getting solid offers based on a picture they posted on their social media sites. It’s really pretty amazing.

Kathy Kaye: At the Trump Organization we have a very unique platform, in the sense that our community via the Trump Family has a following of over 3 million people on Twitter alone. Hundreds of news stories are generated from 1 single tweet. Recently, we unveiled a new ultra-luxury development in Mumbai, India and we broke the news via Twitter. It is an incredibly powerful tool and one that can be highly effective to generate buzz and awareness worldwide. Additionally, we have spent quite a bit of time exploring the new opportunities in the interactive space and as such, will be launching a new cutting edge luxury property application for iPhone/iPad that will be a unique tool for our brokers and their clients.

Barbara Fox: We post all our new listings on our facebook page.  It gets the word out quickly but I don’t think it is, as yet, integral in our business model.

James Gricar: We have an extensive social media operation at the firm headed by a marketing and tech wunderkind, Matt Leone.  He and his team not only market property via social media, but are tireless in creating endless social media opportunities for our agents. And our corporate presence is quite robust as well.

7. Buildings are on the rise…literally!  Several new projects are setting height records in New York City.  What is your opinion on these massive structures?

Kathy Kaye: It is incredible to see the recent changes in the New York skyline. The designs are increasingly cutting edge and pushing the architectural boundaries while catering to the desires of today’s buyers. This is happening not only in New York but in major cities around the world. For example, we have recently announced a new building in Vancouver which is a perfect example of a highly advanced style. The property is an Arthur Erickson design with an actual twist that will undoubtedly reshape the skyline in Vancouver. Developers today are more resourceful than ever, and as such are taking city living to new heights in New York and beyond.

Barbara Fox: Mayor Bloomberg created a fertile environment for growing our city over the past 12 years.  Since we can’t add any additional land to Manhattan Island, the best and only way to grow is UP!

James Gricar: Call it mid-western of me, but to me New York City equals skyscrapers.   While height, light, and density are things we need to regulate (and do, incidentally), I believe that New York needs to remain the most vital and exciting vertical living experiment in the world.  We started it, we should keep building it!

Dottie Herman: New York is a place where people come to reach for big things, so I think that these tall buildings echo that spirit. Aim high!

 

REBNY 25TH ANNUAL RESIDENTIAL DEAL OF THE YEAR AWARD

As a media sponsor and proud partner of REBNY, residencyNY Magazine congratulates the Real Estate Board Of New York on a fantastic event, and salutes the many winners, both with and without awards, that make our community special.

Jeffrey Rothstein of Douglas Elliman receives Henry Forster Award for lifetime achievement. Heather Stein of Brown Harris Stevens Residential Sales receives top sales prize.

All photos by Gotham Photo Company.

Miriam Harris, Executive Vice President of Real Estate Transactions at New York City’s Economic Development Corporation presents the proclamation from Mayor Michael R. Bloomberg that declared October 24, 2013 REBNY Residential Division Day.

Miriam Harris, Executive Vice President of Real Estate Transactions at New York City’s Economic Development Corporation, presents the proclamation from Mayor Michael R. Bloomberg that declared October 24, 2013 REBNY Residential Division Day.

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Jim Gricar, Sara Rotter, Diane Ramirez and Richard Grossman

Stephe Kliegerman

Stephe Kliegerman

Dottie Herman, Jeffrey Rothstein, Diane Ramirez, Judith Oston, Abby Gellert and Jim Gricar

Dottie Herman, Jeffrey Rothstein, Diane Ramirez, Judith Oston, Abby Gellert and Jim Gricar

Lisa Larson and Frederick Peters

Lisa Larson and Frederick Peters

Ellie Johnson, Suzan Kremer, Alfred Renna and Nan MarElia, J. Roger Erickson

Ellie Johnson, Suzan Kremer, Alfred Renna and Nan MarElia, J. Roger Erickson

Heather Stein and Peter R. Marra of Brown Harris Stevens

Heather Stein and Peter R. Marra of Brown Harris Stevens

Diane Ramirez, Judith Oston Barbara

Diane Ramirez, Judith Oston Barbara

Barbara Fox and Lori Huler

Barbara Fox and Lori Huler

Heather Stein, Suzan Kremer, Lisa Larson and Judith Oston

Heather Stein, Suzan Kremer, Lisa Larson and Judith Oston

 

Jeffrey Rothstein

Jeffrey Rothstein

Dottie Herman, Suzan Kremer, Ken Haber, Neil B. Garfinke

Dottie Herman, Suzan Kremer, Ken Haber, Neil B. Garfinke

Suzan Kremer, Luis D Ortiz

Suzan Kremer, Luis D Ortiz

James Gricar, Gerald Makowski

James Gricar, Gerald Makowski

Ilan Bracha and his team

Ilan Bracha and his team

Ryan Serhant, Jessica Campbell

Ryan Serhant, Jessica Campbell

Sarah Williams

Sarah Williams

Jeanne Oliver Taylor, Rich Cave, Gregory Frank, Nik Kolidas

Jeanne Oliver Taylor, Rich Cave, Gregory Frank, Nik Kolidas

Gerald Makowski, Diane Ramirez, Peter Grazioli

Gerald Makowski, Diane Ramirez, Peter Grazioli

Michael Sorrentino, Gary Malin, Alicia Marenzana, Jay Heydt, Corlie Ohl, Danny Charles, Peter J. Sobeck

Michael Sorrentino, Gary Malin, Alicia Marenzana, Jay Heydt, Corlie Ohl, Danny Charles, Peter J. Sobeck

Shlomi Reuvini,Pamela Liebman, Paul Wexler, Bess Freedman, Gene Martinez

Shlomi Reuvini, Pamela Liebman, Paul Wexler, Bess Freedman, Gene Martinez

Mickey Conlon and Tom Postilio

Mickey Conlon and Tom Postilio

Rich Cave, Nik Kolidas, Cheryl Eisen, Gregory Frank, Harry Armon

Rich Cave, Nik Kolidas, Cheryl Eisen, Gregory Frank, Harry Armon

Andrea Daniels, Deborah Lupard, Karen Gastiaburo, Lisa Larson, Marc Palermo, Claire Groome and Doug Williford

Andrea Daniels, Deborah Lupard, Karen Gastiaburo, Lisa Larson, Marc Palermo, Claire Groome and Doug Williford

Heather Stein

Heather Stein

Eric McCarthy , Kristin Thomas ,Wendy Maitland, Ari Lefauve

Eric McCarthy , Kristin Thomas ,Wendy Maitland, Ari Lefauve

Nicole Beauchamp

Nicole Beauchamp

January/ February 2013 – residencyNY Roundtable

Kenneth Scheff Stribling & Associates, Managing Director,  Executive Vice President
Neil Binder  The Bellmarc Group, Principal
Barbara Fox Fox Residential Group, President
Margaret Trautmann Daniel Gale Sotheby’s International Realty, Licensed Associate Broker

1 – How should a consumer choose a lawyer for their purchase transaction? What are the 3 most important factors to consider?

Barbara S. Fox:  A consumer should always use a lawyer for a real estate transaction who is recommended by someone who has had recent favorable dealings with the attorney.  Or, get a referral from your personal attorney — or better yet – from your real estate broker!  Three important factors to remember are:  1) Use an attorney who is familiar with Manhattan apartment closings, particularly if a coop is involved.  2) Use an attorney who is located preferably in Manhattan and readily available if needed.  3) Make sure the attorney has another lawyer to serve as a backup in case he/she is away and something with regard to the deal needs to be attended to immediately.

Kenneth Scheff :  I think the three most important factors in choosing a lawyer are:  1) Whether the lawyer gives you a sense of confidence; whether it’s someone you can talk to.  2) A second factor would be whether they have the time to work on your transaction in a quick or timely manner because I think there are some truly excellent lawyers that are slow and that can be very detrimental and could cause you to lose a deal.  3) The third factor ties into the confidence factor.  Are they familiar with the New York City market and where the market is right now in terms of sense of urgency?  Do they understand what’s commonly done in negotiated points of a contract?

Margaret Trautmann:  Choosing a lawyer for your purchase transaction is very important.  The best is to get at least three referrals from a licensed and experienced real estate broker and interview each, keeping in mind these factors:  1) If this is a major property, be sure that the attorney you are considering is connected with an appraiser.  This will ensure that he/she will understand what is needed for the transaction to proceed as smoothly as possible, and that there will be nothing overlooked (for example, extra lots).  2) You truly get with you pay for!  If you are thinking of cutting corners and hiring an attorney just based on price, keep in mind that the results can be disastrous.  Price should not be a factor at all.   3) Make sure that the attorney is a “Deal Maker,” not a “Deal Breaker;” your attorney should be comfortable dealing with and speaking directly with the selling broker.  Your attorney should be someone who understands the area in which you are purchasing/selling, and should have knowledge of the village/town laws and codes.  A very good attorney from New York City may not be thoroughly knowledgeable about villages on Long Island, so be sure whomever you choose is well-informed.

Neil Binder:  There is no question that an attorney who is well acquainted with residential real estate transactions in New York City is essential to a smooth transaction.  Otherwise, a responsible attorney who is not acquainted with this field is going to be hypersensitive to every possible permutation and will take more time to review documents and engage in research to ensure that he is conforming to the laws here.  An attorney knowledgeable in New York City real estate will also be aware of the customs normally followed.  The result is that the transaction will proceed more smoothly and probably at a cheaper cost.

Many attorneys lose sight of their role in serving their client. They believe that they are not merely acting as a legal protector and advocate, but also as a business advisor. This can often cause a considerable level of confusion in a deal that would otherwise have been an easy transaction. I have seen deals where counsel has refused to permit his/her client to engage in a transaction because a building’s maintenance was high or the reserve fund was low. I have also seen transactions where counsel sought to renegotiate the deal when it was perceived that the price was too high. Many times the result is a fallen deal. A lawyer should remember that his/her duty is to advise clients of the legal risks associated with the transaction so that the client can make an informed decision.

There are some attorneys who believe that it is important to be adversarial to the other attorney. Thus, the transaction becomes a battle of egos between the respective counsels, more than a transaction on behalf of their clients. Obviously there are times when a strong hand has value; however, it should not be the beginning point to the conversation. A good attorney will look to build rapport with the other attorney and focus on problems as mutual challenges that both attorneys should seek to resolve for the benefit of their respective clients.

2 – Is social media an important part of your business plan and how do you see it impacting your future business?

Margaret Trautmann:  Social Media plays a very important part in my business plan and has already impacted my business dealings. This current and future generation has been brought up with technology: cell phones, computers and more. It is important to be able to give the instant attention and gratification they desire. Keeping up with changes in communication is extremely important.

Neil Binder:  There is no question that social media is an important part of the future of the real estate brokerage business.  Since being a salesperson is a “people business,” the goal of the salesperson is to reach as many people as he/she can. However, merely having a Facebook account is hardly enough. The agent must build up the size of their networks to encompass as many people as possible and communicate meaningful information that people will be inclined to read. Six degrees of separation is true – for each person who is a friend, you can count on six more opportunities. If you build a reputation, you build a referral business.

Barbara S. Fox:  It is important and I’m sure will become increasingly important, particularly with our younger generations.  At the moment, I don’t believe the impact it may have on the market is fully felt.  But it’s a great way to get the word around about things – specifically new listings.

Kenneth Scheff : I think it is an important part of many of our agent’s plans for the future and a lot of our agents are using social media now.  On a very simple level, it seems easier to keep track of your contacts through Facebook and Twitter, rather than having a long list of names in a contact folder in Outlook. Somehow, it just seems more organic to reach more people through the new social media, and we’ve also had some interesting successes with our agents who are from other parts of the world. Once they join Facebook, they get back in communication with people who are on other continents and it has led to a surprising amount of business for us.

3 – It’s no secret that there is significant interest in NY Real Estate from foreign investors.  Are these investors driving up prices?

Neil Binder:  Foreign investors are heavily focused on new construction. Thus, this segment has been strongly supported by this activity. In the resale market foreign investors have been a significant participant for some time; however, the percentage of this market relating to foreign money has remained somewhat stable. The big aspect driving the current market is low interest rates, perceived favorable value in prices and lifestyle decisions.

Margaret Trautmann:  Without a doubt, foreign investors are significantly interested and have driven up the prices. There is such value on the North Shore of Long Island that these foreign investors see and understand the value and are willing to pay more. They do tend to be tough negotiators.  However, at the end of the day, if anyone really wants the property they will buy it.

Kenneth Scheff: I think they have an impact.  Sometimes when people talk about foreign investors, they talk about people who have foreign passports that actually live in New York already.

If you’re talking about purely investors (meaning they live in other countries and do not want to use the property as a pied-à-terre), they really are just investing in the property to rent it out and then sell it (they might not even see it).  I would say they are a small part of the market and their significance might be better characterized as building-by-building; for some buildings that has been an important factor in selling them, and for other buildings it has not.

On the other hand, if you’re talking about how many people who buy a condominium (usually it’s a condominium) have a foreign passport and either are living in New York or plan to use the apartment as a 2nd or 3rd home, I would say that plays a very significant part of our market.  It has had a definite impact leading to increased prices in condominiums while keeping that gap between condo and co-op prices significant.

Barbara S. Fox:  Foreign investors are definitely finding Manhattan real estate a good investment.  They are keeping the prices, particularly in new condominium buildings, supported, and even driving them up because of the lack of product currently available in the city.

4 – Referrals from past clients are critical for growth.  How do you maintain those relationships after closing?

Kenneth Scheff: We’re extremely good at that.  At Stribling we’re able to do that by acting in an extremely ethical, considerate, gentlemanly or ladylike way during the transaction, so the clients remember that they had a good experience.  After that, we maintain a nice warm relationship with the buyer by staying in touch, and having a drink or meeting for a coffee every once in a while.  I’m not suggesting that in every transaction, or even the majority of our transactions, the broker and client become good friends, but I am saying that in most of our transactions there is a feeling on both sides that they could be friends if they had time and needed new friends, thus, creating a more organic relationship.  In terms of what we do, people do send notes, people pick up the phone, send e- cards or newsletters.

Barbara S. Fox:  I personally never forget a good client and always try to stay in touch with my clients over the years.  I have clients I sold apartments to 20 or more years ago, who come back to me because I’ve stayed in contact with them over those years.  At Fox Residential Group, we stay in touch by sending a corporate holiday gift to our clients, customers, and others who have served us well over the past years.  We also send regular mailings and emails of articles and our newest listings that may be of interest to them.

Neil Binder:  The value of a referral is that you are not an unknown to the buyer, and he comes to you with a recommendation about the quality of your service. This is the key to building a solid reputation.  The key to building this referral base is by keeping your old relationships fresh. Send them a mailing from time to time, particularly during the holiday season. Let them know what’s going on in real estate by sending them a newsletter or market report.

Margaret Trautmann:  Keeping relationships after closings has gotten to be quite a bit easier with social media. There are monthly updates as to what is happening in the market and what I have been up to that I send out at least once, if not twice a month. For example, “Just Listed” or “Just Sold” information, market reports for their areas and “The Heartbeat of the Market”.

5 – Helping a client find that perfect dream home is a very rewarding feeling.  What was your most memorable moment?

Barbara S. Fox:  Every time I see a customer’s eyes light up when they look around an apartment – and like it — is a memorable moment for me.  I equate finding the right apartment with finding the right mate – there’s a chemistry which is instantly felt.  After many years of doing deals, I’ve never lost that special feeling when I’ve connected a customer to a property.

Neil Binder:  I have spent over 15 years building on a patent I created, Selection Portfolio, which is a means by which properties are compared according to specific criteria:  location, building, floor, view, space and monthly cost. Using this criteria I set up a special program, Selection Portfolio Valuation, which permits us to compare like apartments in a given neighborhood at a similar price.  I have spent an enormous amount of time trying to get it right.

One day, an agent came into my office. His foreign buyer was interested in an apartment and he wanted my advice on what to do. I listened to his concerns:  he didn’t know what to bid on an apartment and he sought direction. I went to the computer and printed out a Selection Portfolio Valuation report. The agent looked at the analysis and decided to bid based on the price the report recommended as the proper value. After the agent presented the report to the seller, he too was in agreement.  I never even saw the apartment, but I still made the deal. Great moment!

Margaret Trautmann:  After 23 years in real estate, I have to say that my most memorable and rewarding transaction has to be the purchase of my son and daughter-in-law’s home. The trust and faith that I would understand and listen to what it is they wanted in a home was touching. The home they purchased was the first one they saw. The house came on the market just before they were able to buy. But upon seeing the house, they realized that this was the home for them. To this day, they are so happy with the choice!

Kenneth Scheff:  People have very vivid dreams and we do want to make them happy.   We want people to feel like what they’ve purchased was a good idea – it made them and their family happy, and was a good investment.    I want to reframe the question a little bit to say that what’s most exciting for me is when we go through a process with our buyer and they become educated in the market.  Buyers then sometimes learn that what they initially thought they wanted may not actually be their true dream home, or it may not be realistic.  What we’ve helped them do is appreciate what they can find and get, and they realize that this really is their ultimate dream home.