Real Estate Myths Explained

Myth # 1
All Real Estate brokers are the same.
Many buyers think that anyone who holds a real estate license is equally capable of assisting them in buying a home. But I would ask them, “Does everyone with a driver’s license operate a vehicle the same way?” Of course not. Both drivers and real estate brokers are licensed by both their state. But just as drivers approach the road differently, so can real estate licensees vary considerably in how they approach their job.

In a similar vein, real estate designations indicate that an agent has completed advanced training, which is usually a sign of higher competence. After all, would you rather hire an accountant or a certified accountant? Still, designations don’t necessarily guarantee a higher level of service.

To by truly successful in this business, we all need to remain committed to personal growth and skill development. That effort includes designations but is also involves something more- an eagerness to constantly find ways to raise the bar. So if buyers, want to avoid the risks involved in believing that we’re all the same, they should take the same advice that most sellers employ- interview as least three brokers before you make an informed decision about who you want to work with.

Myth # 2
The listing agent will look out for my interests.
You would think that all the changes in agency disclosure laws over the years would have altered the way consumers approach buying a home. But in my experience, most buyers, and especially first-buyers, still don’t understand that concept of representation and mistakenly believe that a listing agent will watch out for their interests. Unfortunately, buyers are still more likely to shop for homes rather than shop for a broker who will assist them in finding a home.

Myth # 3
I can find all properties for sale on my own.
As more and more first-time buyers search for and preview properties online, the myth has grown that they can find every property they may be interested in on their own. But not all available properties are advertised. Overnight updates too many online listing sites can lag real-time developments, particularly during hot markets. Buyers don’t really understand how the real estate listings work, nor are they plugged into their local real estate markets to the extent that brokers are.

Myth # 4
If I just wait long enough, I’ll find the perfect home.
There is no such thing as a “perfect” home. Buying an apartment requires compromises, a big dose of reality, and an awareness of market conditions. But I also recognize that many good buyer-clients simply need time to make a decision. (I think of them as “wait-watchers”) I always make a point of asking buyers how they want to proceed. Do they want to do all the watching, letting me step in to help them get the home after they’ve identified one? Or do they prefer that I do all the looking, letting them know if something comes up? Discussing and clarifying clients’ preferences in your/their role can go a long way towards managing expectations and helping you adapt your services to satisfy a wider variety of clients.

Myth # 5
I’ll improve the odds of finding the house I want if I work with more than one broker.
First-time buyers, eager to canvass a market for all possible homes and (again) not really under-standing buyer-representation, can mistakenly rationalize that they might as well have several different real estate brokers searching for them. Before you know it, a buyer ends up seeing the same house with two different brokers, creating, confusion over who is doing what for the buyer and who earns cooperative compensation.

Of course, this possible scenario could be completely avoided if we asked, up front, if a buyer is working with anyone else- and if we explained buyer-representation to buyers, so everyone was clear about who was working together, and how. This is why buyer’s reps are encouraged to get a signed representation agreement with their clients. And as standard of Practice 16-9 of the REALTOR® Code of Ethics instructs, we have an affirmative obligation to make reasonable efforts to determine whether the prospect is subject to a current, valid exclusive agreement to provide the same type of real estate service. So eliminating this myth among buyers may be as simple as following our own guidance.

Myth # 6
Buying an apartment is a simple as agreeing on a price and signing a few papers.
If only I were that simple! However, first-time buyers don’t always appreciate that purchasing negotiations can involve many other issues, beyond price. Nor do buyers realize how many other steps are part of the purchase process after the contract is signed including loan approvals, appraisal, title search, home inspection, etc. Helping a buyer move a transaction successfully from contract to closing takes a lot of effort!

This is anther area where I think it’s vitally important for buyer’s representatives to manage their client’s expectations; including explaining how each step will be handled to finalize their purchase. Are you planning to baby-sit the transaction all the way to closing? Or do you have other people on your team who will help guide the buyer? Regardless of how you assist clients with their transactions, buyers need to know what to expect right up front, so they don’t encounter any unpleasant surprises. To earn their long term loyalty (and referrals), keep them informed- and satisfied- until they’ve settled into their new home, and beyond.

Myth # 7
Getting a mortgage should be quick and easy.
Many first-time buyers question and resent the whole lending process. Then ask, “Why do I need to provide that?” and “Why do I need to jump through all these hoops?” In my experience, their resentment has less to do with thinking they’re entitled to a mortgage, and is more about feeling annoyed and impatient.

Again, we can help smooth the process by explaining that, especially in the recently-turbulent mortgage market, lenders need to take important precautions before extending credit. Even if your buyer is seeking a loan from a bank where they’ve been a long-time customer, the fact remains that their mortgage will very likely be sold off in the secondary market to an investor who doesn’t know them, but expects to see complete documentation on creditworthiness.

Myth # 8
All mortgages are essentially the same.
Given all the recent attention on borrowers who are struggling to live with ballooning adjustable-rate mortgages, you’d think that more first-time buyers would be attuned to the notion that mortgages are not all alike. Perhaps it’s more important than ever for buyer’s representatives to help them understand the complexities in choosing a mortgage.

The key questions are: How does one rate compare- to another over the long haul? How long will you be in your home? What are you long-term investment goals? Does a 15-year versus 30- year program measure up against your goals? Does an adjustable rate mortgage make sense, and if so, what’s the best time frame? First-time buyers often don’t look at enough options before they buy. IN assuming that all mortgages are the same, they deprive themselves of making a fully-informed decision.

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Contact Joseph R DeLorenzo – jdelorenzo@townrealestate.com or 646-244-8555

The Skyline is Changing Again

220_exterior.jpgCurbed.com came out with some great coverage on the ever-changing skyline!

The Extell-Vornado catfight over 220 Central Park South finally ended last year, paving the way for Vornano’s long-talked about plan to tear down the structure and erect condos in its place—and oh, what condos they will be. An angel tipster spotted renderings and a detailed video of the future Robert A.M. Stern More

Outside its Cold (-5°); at least the Market is Hot. Q4 Report came out today

Q4 Report thumbnail.2Today it was -5°, with the wind factor in NYC; but at least the NYC Real Estate Market is Hot. Again, my apologies for such a cheesy headline, but how could I resist?

Regardless, our Q4 New York City Real Estate Market Report just came out, and here are the key takeaways:

  • Low inventory: available residences in Manhattan decreased in number for the twelfth straight quarter (three years).
  • Demand is aggressive and on the rise: more contracts are being executed now than at the same time a year ago, a trend that has been ongoing for eight quarters (two years).
  • Short supply and high demand meant higher prices: the price per square foot in Manhattan reached $1197, a five-year high (just 5% off the all-time high of $1261 in Q2 08)
  • New development sales are pumping up luxury sales and resulting in dramatic price gains at the high end.

Q2 Corcoran Report

Q2 2013 Market Report schreenshot

Q2 Corcoran Market Report just came out and the key findings are:

1. Market activity continues at six-year high.  More closings and signed contracts took place than in any other quarter since 2007.

2.Inventory continues to decline.  There have been nine consecutive quarters of diminishing inventory – a 52% drop since the Q1 09 peak.

3. Prices increased by 5% (ppsf) over a year ago, thanks largely to increasing value in the condominium market.

 

FULL REPORT HERE

 

My recent Loft Sale with Tin Ceilings Featured on CNN Gallery

middletonMy recent Loft Sale at 108 Reade Street in Tribeca was featured on a CNN Gallery highlighting home decor. The Blue Tin Ceilings were some of the most unique I have seen!

READ THE FULL STORY HERE…

If you forget your keys, now you can simply go to 7-11 and have a digital copy made!

Can’t wait to see these start sprouting up… What a crazy idea and what will they think of next! – JD

In olden times, people actually knew their neighbors, interacted with them on a regular basis, and stored spare keys with them. This never happens anymore now that human relationships are passé. Which is why, starting this week, KeyMe kiosks — which keep a digital file of your key and can cut you a new one when you get locked out — will begin popping up at 7-Elevens around Manhattan.

READ FULL STORY HERE…