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.