REAL ESTATE, IT'S TIME TO WAKE UP!
Throughout my thirty years of working in real estate, leading the marketing efforts of both firms and properties, I’ve learned to pitch and catch from whatever side. But there are certain things that good brokers just don't do. Here are some real examples. For privacy sake, I've left out names or details that might indicate the person or the property. I'm not here to embarrass anyone, just merely pointing out bad practices.
THE WORST RENT & SELL STRATEGY
A broker places a property on the market for rent and for sale. Given the current rental climate with so many major landlords offering incentives and concessions, the broker doesn’t advise the client to pay for the fee. Now, that’s perfectly fine if you are confident it will rent quickly. But months go by and there is almost no activity. So they reduce. Nothing happens. They keep reducing until the asking rent is now below a 10-year low for the building. Meanwhile, the asking price for sale is at its highest ever! The unit finally gets a tenant at a low rent, but the apartment remains up for sale at the same record breaking price.
If the owner’s intention is to sell, wouldn’t it make more sense to keep the rent high and pay a fee? What investor would take a property at a high price with low rent? Moreover, as the property goes from stale to comatose on the market for sale, it is severely negatively affecting the value not only of that particular apartment, but of the entire building. Meanwhile, the broker is accumulating listings he/she knows will not sell. Why not? All he/she is doing is posting it online and on very rare cases when it needs to be shown, an assistant does so.
SOMETIMES THERE IS ONLY ONE SIDE TO A MULTI-STORY
I was showing to a purchaser a unit in a particular building that, as it turns out, had two entrances. The broker’s assistant told us to meet her on the side of the building that wasn’t impressive at all. As if that wasn’t bad enough, when we got to the appropriate floor, this particular entrance led to a long trip down several hallways before reaching the front door of the apartment. After a quick look inside the apartment, we were told we could exit through the "other side.' Not only was this side a shorter distance from the elevator, outside it also had an architecturally impressive façade. I personally thought it was one of the best we had seen, but the damage from the first impression already proved fatal.
GOING, GOING, GO……ING?
I call a broker about a listing. They tell me to bring my client as soon as possible underscoring that they have multiple interests/offers. “It will go within a week,” I'm told. Or I show a property and they tell us that they have several offers and are close to a deal. My savvy clients and I take this in stride. Sometimes there is god reason to move aggressively and expeditiously. But more often than not, it’s just an amateurish sales tactic. What happens when something that has several serious interest/offers does not move months or weeks after it was supposed to? The level of appeal, interest, and perceived value plummet. Their calls later trying to entice us to a deal just sound desperate. Don't say you have offers unless you do.
DIRECTING A DEAL TOWARDS A CLIFF
A client of mine was interested in purchasing an enormous “one-bedroom,” highly-priced apartment that had a rather strange configuration. After examining the floor plan, my partner and I realized that the odd layout had to do with lot line windows. Essentially, we concluded, it had no legal bedrooms. When I brought it up to the broker representing the seller, I was first told that he was unaware whether the windows indeed were lot line. (He lived next door!) It would later be acknowledged, when asked directly a second time, that the room “technically” could not be called a bedroom, but that it had been used that way for a “long time.” As the misrepresentations continued, our concerns only grew. The fact is both the seller and the broker know that what they are doing is fraudulent, and whether it’s a bank appraiser or an attorney doing due diligence, or an engineer/architect inspecting the unit, this issue will eventually surface. So why hide it? Instead, acknowledge it so that the purchaser can focus on the many other beautiful qualities of the space.
Years ago, I was interviewed by a seller who has had her apartment on the market for four years. Two of Manhattan’s top brokers before me had the listing for two years each, and they failed to sell it. So she asked me what I would do. I told her the first thing I would do is to remove her beautiful shutters that are covering all her windows. She was horrified. Her neighbor next door, she explained, had built a monstrous HVAC system that sat on the top of his roof, obstructing her previously gorgeous view of the river. I explained to her that, in my opinion, covering it up gives prospective buyers even more reason to fixate on it. On top of the less than stellar views, her closed shutters made her home much darker than it was. She insisted on leaving them closed, but I eventually convinced her to let me take it down for one month. It didn't take that long. I also told her I would strike out every reference to a “river view.” I would much prefer that buyers be pleasantly surprised when they see a glimpse of the river than expect a great view only to be disappointed . We sold it within a couple of weeks. What did the buyer like about the space? It had great LIGHT.
I GET PAID TO BROKER NOT JUST TO TAKE APPOINTMENTS
As owners of our own company, my partner and I go on appointments with the actual intent to do a deal. We don’t permit ourselves or the members of our team to spend the day just coasting through the day aimlessly. We believe there are many important things that one can do in life. So either do something with commitment and purpose, or do something else.
My partner and I were showing the crown jewels of a new development. Prior to the appointment, I informed the broker who was handling the project that my client was decisive, quick, serious, but has little patience. So in preparation, I already discussed with the client several key things including the suitability of the layout, where the project was in terms of the market, etc. But I emphasized to the broker that we needed someone at the sales office who would be able to address any other questions the client had. The broker understood and promised to be at the appointment to present the project.
Conflicts happen. On the day of the appointment, the broker as well as the lead sales director were both unavailable. But we were assured that the person who would meet us would be able to handle the showing and presentation. When we arrived at the sales office, we were told the person whom we were supposed to meet was not available. Then we were passed around like a hot potato. The experience in that sales office was somewhere between entering a Banana Republic and a used car dealership.
When the salesperson finally arrived, it was quickly clear no preparation was made at all. Throughout the presentation, there was no mention at all of the units we were particularly interested in. It was a generic showing. The salesperson spent more time pressing iPads and lighting the miniature model. The litany of finishes were recited without the context of uniqueness or utility–I could have been showing a studio cookie cutter apartment and no one would have known the difference in both style and substance. When my partner and I tried to redirect by asking specific questions pertaining to the unit, the salesperson was not certain how to answer them at all. The client literally began to lean on a counter out of pure boredom.
This may not make a difference to the sales office staff that gets paid to show up, or perhaps to the brokers who accrue listings. But to us who perform exhaustive work on behalf of our clients, this kind of showing is devastating. Not only does it make us look bad for wasting our client’s time, but it makes the development look worse.
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