Culture

 

Trends & Tides: Agent Referral Fees and Entitlement

05 June, 2017 posted by: CORE

Trends & Tides takes a look at the ever changing environment of New York City real estate – past, present and future – by offering observations, analyzing perceptions and challenging myths, while giving a dose of reality along the way.

There have been many times over the course of my 25-year-long real estate career in which I have sent a friend, family member or customer to an agent in another city with the expectation of receiving monetary compensation for my referral. On many of those occasions, I took on the role of a liaison between my customer and the agent to whom I referred. In the spirit of adding value to a transaction and actually earning my referral fee, I would provide advice, guidance, opinions when asked and even assist with negotiations on some occasions. That said, there were also times where I simply made a phone call to another brokerage in the area in which my customer was searching and was pleasantly surprised months later when I received a check in the mail that could be as high as six figures for merely making a connection. With referral fees typically ranging between 10% and 40% of the broker’s side of the commission and 25% being an unwritten industry standard, the opportunity to make serious income abounds.

So many in the real estate industry believe that simply providing another agent with a qualified, ready, willing and able buyer or seller entitles them to a piece of that commission. Others feel strongly that they should add additional value to the experience in order to “earn” their referral fee. I feel quite strongly that unless you are at minimum vetting the agent with whom you’re suggesting your customer work or staying connected as a liaison and adding value to the transaction, then you are not entitled to a referral fee.

Most recently, it dawned on me when a long time loyal customer of mine called me to tell me that they had gone to contract on a large parcel of land in another part of the country. My initial reaction was “ouch, that stings” as the referral fee would have been upwards of $500,000. I immediately considered contacting their agent to “introduce myself” as their referring agent. Seriously! I was actually going to call and suggest that I get paid nearly $500K for a transaction in which I played absolutely ZERO part. ZERO! I know for certain that many agents do make an effort to insert themselves into deals in which they have played no part. After I calmed down and really considered all aspects of the situation, it dawned on me that I was not in fact entitled to take nearly a half a million dollars out of another agent’s pocket. I added no value and I didn’t even make the connection between the agent and a ready, willing and able buyer.

In short, it is my opinion that adding value to a transaction in which you have referred a buyer or seller is the only thing that entitles you to a referral fee. 


 

Trends & Tides: From the Trenches

05 December, 2016 posted by: CORE

tandt-pic

Trends & Tides’ takes a look at the ever changing environment of New York City real estate – past, present and future – by offering observations, analyzing perceptions and challenging myths, while giving a dose of reality along the way.

Quarterly reports serve their purpose in our ultra complex real estate market but sometimes it’s nice to check out what is happening real time, particularly as the market shifts.

Anecdotal evidence from our own ranks of 180 agents at CORE as well as a peek at real time data from UrbanDigs seems to be telling us something very important: the bridge between bid and ask is narrowing, and therefore contract activity is picking up. Last week saw an unusual number of signed contracts here at CORE for this time of year and daily listing reports show that as many as 70-80% of currently active listings are reducing prices. The combination of these two factors tells me that sellers have softened and are finally ready to let go of old price expectations and meet buyers at a palatable price for all.

As we approach 2017, more will be revealed, but if buyers and sellers continue to have a meeting of the minds, sales volume should pick up. Only time will tell.



 

Trends & Tides: Ten Trends Over Ten Years

30 March, 2016 posted by: Douglas Heddings

199_Mott_Street_2_09

Trends & Tides’ takes a look at the ever changing environment of New York City real estate – past, present and future – by offering observations, analyzing perceptions and challenging myths, while giving a dose of reality along the way.

There is one thing for certain about most trends in real estate and that is by definition that they rarely remain in vogue for long. Let’s take a moment to examine ten trends in real estate over the past ten years in honor of CORE’s ten year anniversary. Some have come and gone and others remain, at least for now:

  1. Granite has been replaced by a plethora of different stones and materials.
  2. Jacuzzi bathtubs are now steam showers.
  3. Eat in kitchens have given way to the open kitchen concept.
  4. The Upper East Side is no longer the only neighborhood for the uber wealthy.
  5. The arrival of Billionaire’s Row and the $20+ million pied a terre.
  6. The gentrification of neighborhoods such as Harlem and the Lower East Side.
  7. The birth of new neighborhoods like Hudson Square, Nolita and Nomad.
  8. Additional green spaces (Hudson River to The High Line).
  9. An unparalleled influx of global wealth.
  10. Investors’ perspective of  Manhattan as a single neighborhood.

 

What are some other trends that you have witnessed over the past ten years?

 



 

Trends & Tides: Perception vs. Reality in Manhattan Real Estate

02 March, 2016 posted by: Douglas Heddings

x2 (2)

‘Trends & Tides’ takes a look at the ever changing environment of New York City real estate – past, present and future – by offering observations, analyzing perceptions and challenging myths, while giving a dose of reality along the way.

Here is a selection of email subjects found in my Inbox in just the past 10 days:

  • “Seller Says Sell”
  • “Priced to Sell”
  • “Price Drop”
  • “Price Reduction”
  • “Price Improvement”
  • “New Asking Price”
  • “Price Slashed”

The obvious perception of anyone receiving these emails would be that the market is softening and perhaps even tipping in favor of buyers. Just ask a buyer currently searching for a Manhattan property if this is in fact their reality and more often than not you will hear a resounding, “NO!” In fact, take a look at UrbanDigs most recent analysis of the days on market in multiple price points that make up Manhattan’s real estate landscape. A quick glance at all of these price points show a clear divide between the market above and below $5M. I would argue that agents representing sellers in the higher end of the market have had a greater tendency to overprice than those in the under $5M market.

So what IS happening? Buyers are no longer blindly bidding on overpriced properties and some real estate agents, scratching to survive in an ultra-competitive market, have continued to escalate prices to a level that has finally become unpalatable to the consumer. Sellers who have priced their property in line with current market conditions, comparable unit sales, etc. have seen greater success than those who have listed with agents who sold them a dream. The perception of a softening market isn’t reality, it’s more a story of overpriced inventory searching for more realistic selling prices. Unfortunately for the price dropping sellers, they have likely left considerable money on the table by not pricing properly right out of the gate.



 

Trends & Tides: Leading the Evolution of Real Estate

04 November, 2015 posted by: Douglas Heddings

290Mulberry_pan4_

‘Trends & Tides’ takes a look at the ever changing environment of New York City real estate – past, present and future – by offering observations, analyzing perceptions and challenging myths, while giving a dose of reality along the way.

Leading the evolution of real estate. A big and bold statement indeed, but what exactly does this mean at CORE?

The first to generate a real time market report.

The first to curate a public architecture exhibit to market a property.

The first to produce a documentary film to sell a project.

The first to sell out a project with only a social media campaign.

The first to offer our agents in-house home stylists to prepare their listings for market.

These are just a few of the many firsts for which CORE is responsible and I can assure you that many more are in the works. These are all excellent examples of the real, concrete (pun intended) ways in which we are constantly striving to evolve the real estate industry.

But evolution is often more of an abstract and intangible process. This is where I believe CORE is truly experiencing some magic. From our collaborative culture to our fresh and creative solutions, CORE consistently embraces change. This paired with the highest level of integrity and a mutual respect allows us to remain at the forefront of the development and advancement of the real estate industry.



 

Trends & Tides: CORE’s Collaborative Culture

07 October, 2015 posted by: Douglas Heddings

IMG_5221

‘Trends & Tides’ takes a look at the ever changing environment of New York City real estate – past, present and future – by offering observations, analyzing perceptions and challenging myths, while giving a dose of reality along the way.

I began my real estate career in 1992 with an Upper West Side “mom & pop” brokerage company when agents carried over-sized index cards and a pocket full of change to make appointments from pay phones. I remember the excitement when I purchased my first gigantic Motorola flip phone with its huge telescopic antenna. That monster cell phone was a game changer, but not because I could now make appointments more easily. It was due to the fact that my colleagues and I were now able to communicate with each other in real time which vastly improved the buying and selling experiences of our customers. It was as close to real time property updates as we had experienced to date and the input we all shared on our property searches was beneficial to both the agent and the customer.

Fifteen years later when I opened my own company, I created a profit sharing business model which aligned everyone’s interest with each other and, most importantly, with the interest of each agent’s customer. It was collaboration on steroids and once again the consumer was the beneficiary of the entire team of agents, rather than just an individual. As someone who believes wholeheartedly in the power of collaboration, I could have never imagined just how selfless and powerful the collaborative culture at CORE could actually be!

Agents sharing their business plans, marketing strategies, collaborating on deals and generally treating one another with the respect of a loving family is what I have come to love about CORE. These are the intangibles that not only greatly benefit our customers but make CORE the most enjoyable environment for those of us lucky enough to call CORE home.



 

Trends & Tides: Discretion Pays Dividends

09 September, 2015 posted by: Douglas Heddings

DSCN6686

‘Trends & Tides’ takes a look at the ever changing environment of New York City real estate – past, present and future – by offering observations, analyzing perceptions and challenging myths, while giving a dose of reality along the way.

From the drama of “reality” shows like “Million Dollar Listing” to the excessive “sharing” of real estate porn across social media channels, never has real estate been more a part of pop culture than it is today. Take a gander at the Instagram of one of your favorite real estate agents or tune in to an episode of any of the plethora of real estate programs on television and you will no doubt learn many intimate details about not only beautiful properties but also, and all too often, the owners of those properties. Discretion seems to have taken a back seat to narcissism. Now let’s talk about me…see what I did there?

Many years ago I sold a property to a wealthy family who was making the purchase for a parent so that they could all be located in the same building. The purchaser, a very private person, worked for a big name firm and couldn’t have been more pleasant throughout the transaction. However, the company for which I worked at the time had a policy to submit all closings to various publications for press. Unaware of this policy, I was surprised to later learn from this client that their transaction had been covered in a major publication. I was shocked and disappointed, but not as much as the buyer. Despite having no knowledge of the press coverage, I was never able to regain that buyer’s trust as they have since bought and sold several properties without my representation.

In today’s social media rich environment, it is a real estate agent’s duty and responsibility to err on the side of discretion and always consider a buyer’s or seller’s right to privacy. A responsible and discrete real estate professional will NOT post to Instagram, Facebook, Twitter, Vine or any other social media site any information that is deemed to contain private information. We are in the real estate business where we are often dealing with very private people spending very private sums of money on their homes, artwork, furnishings, etc. – all of which should be honored as private transactions.

DISCRETION will pay much greater dividends in the long run than any amount of name dropping or sensationalism around a property or its owner.



 

Trends & Tides: Emotions – The Intangible Market Predictor

26 August, 2015 posted by: Douglas Heddings

101_West_24th_Street_21B_r_03

‘Trends & Tides’ takes a look at the ever changing environment of New York City real estate – past, present and future – by offering observations, analyzing perceptions and challenging myths, while giving a dose of reality along the way.

“The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” – Warren Buffett

Back in 1992 when I entered the Manhattan real estate market professionally, I made a conscious decision to join the residential industry over commercial. I thought that the sale or purchase of a home consisted largely of an intangible emotional component which attracted me. Twenty-three years later, emotion continues to be an immeasurable factor omnipresent in almost every residential real estate transaction. Unfortunately, panic and impatience are all too often emotional drivers when the proverbial “sh– hits the fan”. I saw it in the decision making of buyers and sellers when the Dotcom bubble burst in 2000, after 9/11 when our country and the world was shaken to its core, and again after the Crash of 2008. And it is way too soon to predict, but there is little doubt in my mind that some buyers and sellers will be hitting the panic button much too soon as a result of the debt crisis in China and the ramifications felt at home and across the globe.

No one has a crystal ball and no one can possibly know how the Manhattan real estate market may be impacted by such a disruption in a flawed global economy that is still in its infancy. Even history can only tell us so much as never have the world’s financial markets been so intricately tangled as they are in 2015.



 

Trends & Tides: A Matter of Taste in Food and Agents

12 August, 2015 posted by: Douglas Heddings

11141722_1000893516612121_8531897765259601725_o

‘Trends & Tides’ takes a look at the ever changing environment of New York City real estate – past, present and future – by offering observations, analyzing perceptions and challenging myths, while giving a dose of reality along the way.

It is nearly impossible to go a single day without stumbling upon a “best of” or “top ten” list of some sort. Intriguing reading for sure. In fact, as the husband of the Food Director at Food & Wine, I am the beneficiary of traveling to multiple cities in F&W’s efforts to determine the year’s top ten Best New Chefs in the United States. Yes, we often eat a couple of breakfasts, 2 to 3 lunches and another 2 to 3 dinners…IN ONE DAY!!! No kidding. We eat a lot of delicious food, but only 10 chefs can be selected from cities all over the country to represent the year’s best and most innovative. Food & Wine has perfected the art of their search for “the best” by developing a grass roots system. They are so good at this that they also have lists for the best coffee bars, burgers, pizzas and more. Now, think back to the last time you asked for a recommendation for a great restaurant, a good burger, a decent slice or even a solid cup of joe. You probably don’t have to think hard because most of us regularly ask for the suggestions of friends, family or colleagues when it comes to items such as these. But now, think back to the last time you grabbed that recommended slice (you must try Caesars on the UWS of NYC) only to be incredibly disappointed that it was just too cheesy, saucy or the crust was just wrong for your taste. Or how about that hailed cup of coffee (I prefer Café Grumpy) that was so bitter you could barely choke it down? Or perhaps there was the highly praised burger (my favorite is at J-Bar in Aspen…with truffle fries of course!) that was squeezed between so much bun that it was almost unbearable to eat? Are you catching my drift? Or am I being obtuse?

Taste matters! Not only when it comes to food and beverage but perhaps even more so when it comes to dealing with the people who are going to take on the responsibility of assisting you with one of the largest sales or purchases in your portfolio. Each year, REALTRENDS via an advertisement in the Wall Street Journal, ranks the top 1000 real estate professionals in the country. That said, I personally know many of the top agents on these lists and as the Director of Sales for more than 120 agents, I promise you that no single agent can fulfill the “taste” of every consumer. What these lists don’t measure is efficiency, ease or difficulty of transaction, ability to overcome obstacles and perhaps—most importantly—the financial gain or loss of the buyer or seller. Ranking real estate professionals based solely on their dollar volume would be as if Food & Wine ranked their chefs on the number of covers (people) that they served, the profit of their respective restaurants or even the average price of their bestselling entrees. It would hardly tell us anything about the food or the dining experience to use these measurements, just as measuring the sales volume of a particular sales agent tells us nothing about the experience of their buyer or seller in a transaction.

When it comes time for you to buy or sell an asset as important as a home, definitely consider the references of friends and family, but also be mindful that we all have different tastes and it may take more than just a referral to ensure that your agent isn’t too cheesy or saucy!



 

Trends & Tides: New Disclosure Forms Aim to Protect Consumer

17 June, 2015 posted by: Douglas Heddings

241_FifthAve_PH_09 (1)

‘Trends & Tides’ takes a look at the ever changing environment of New York City real estate – past, present and future – by offering observations, analyzing perceptions and challenging myths, while giving a dose of reality along the way.

On October 1 of this year, any real estate transaction involving a mortgage will have new disclosure forms and timing requirements for those disclosures that some say may delay the transaction process.

Here is what is happening in a nutshell:

The HUD-1 Settlement Statement, Good Faith Estimate and Truth-in-Lending disclosure forms will be REPLACED with a Loan Estimate and a Closing Disclosure. The Loan Estimate is how a borrower will apply for a loan. The purpose of the two new forms is to consolidate information to make it easier for the consumer to compare and contrast the estimate of costs to the actual costs of the loan.

The actual information here isn’t changing much but the reporting timeline requirements are. The Consumer Protection Safety Board will require that the Loan Estimate be sent to the prospective borrower within 3 days of completing an application. The borrower will have 10 days from receipt to review and determine if they wish to proceed with the application. The Closing Disclosure which shows all costs to be paid by the borrower must be given to the borrower 3 days prior to closing allowing them to review and address any discrepancies with the Loan Estimate. This is good news for the consumer, but could indeed cause delays. An APR change by more than 1/8%, a change to the actual loan product or a pre-payment penalty during that 3 day waiting period would trigger another 3 day waiting period and would likely delay closing anywhere from 15-30 days while any discrepancies are remedied.

The most important factor to consider here is that the timing requirements will be determined by the US Postal Service date stamp on the envelope for each document. For that reason alone, it is imperative that everyone dot their i’s, cross their t’s and manage expectations to either avoid or prepare for any unnecessary delays.



1 / 2 / Next

CATEGORIES

ARCHIVES