Stupid Broker Tricks and mortgage tax news

Any brokers have a desire to embarass themselves in public? C'mon, we are all hams.

2nd Annual Westside Talent Night

Wednesday, May 11, 2005
Landmark On The Park
160 Central Park West
7:00 P.M. - 9:00 P.M.

I am so not there.

For all of you new property owners out there I just want to thank you for doing your part in providing financial support to the subways and other forms of public transit.

To fund part of the MTA five-year capital plan, the recently-adopted New York State budget increased the mortgage recording tax in the 12 counties served by the MTA.

The five counties in New York City are Bronx, Kings, New York, Queens, Richmond; the seven other counties are: Nassau, Suffolk, Westchester, Rockland, Dutchess, Orange and Putnam.

The mortgage recording tax increase is five cents for every $100 of debt secured by a mortgage.

Here is a list of the new rates for New York City:
All mortgages securing less than $500,000: New Rate 2.05% Old Rate 2.00%

Mortgage on 1-3 family homes, including individual residential condominiums, securing, $500,000 or more:
New Rate 2.175% Old Rate 2.125%

All other mortgages securing $500,000 or more:
New Rate 2.80% Old Rate 2.75%

In Westchester and Rockland the new rate is 1.3%; Nassau, Suffolk, Dutchess, Orange and Putnam the new rate is 1.05%. The new rate in the City of Yonkers is 1.8%.

The increase in the mortgage recording tax takes effect June 1, 2005.

I am quite sure that the majority of deals being closed in Manhattan fall in the $500,000 or more range. Want to avoid the tax? Close before June.

Bagels, Lox and Cream Cheese. Slashing penthouse prices

This was in Page 6

April 28, 2005 -- THE Village of Southampton has angered the local Jewish community by trying to shut down the town's only Jewish temple for violating zoning rules. Jews who worship at Chabad of Southampton argue that their religious rights are being trampled and point out that a church stands just two doors away. The two sides will square off tonight when the Southampton Board of Zoning Appeals meets. Mark Heller, a Southampton homeowner and lawyer who worships at the temple, predicts a volatile confrontation. "Although this had historically been a Gentile area, many Jewish families have bought homes here and the population is about one-third Jewish now, so it's ridiculous to deny this significant portion of the residents a place to worship," Heller tells PAGE SIX. "We support this town greatly with our considerable taxes, so we should be able to exercise one of the most precious rights as citizens of this country: to worship freely." The Chabad House has been at the location since 1999, but has come under scrutiny only since applying for formal recognition from the zoning board.

People who invented the holy trinity of bagels, lox and cream cheese can't be all that bad. While we are talking about circular carbohydrates, dried salmon and churned milk, I think a slice of tomato adds a little something.

Please leave the Jews alone.


In a recent entry of Curbed

A Curbed tipster writes, "A friend of mine went to go look at the O'Neill Building on 20th/6th and offered up this tidbit...'We were told a rap star bought the penthouse and then two apts on the 5th floor...to be turned into his and her closets. (Each 'closet' for $1.4.M).'

They must have gotten it for cheap because the Grunt has heard on the wire that the O'Neil has begun cutting their prices for their penthouses. It seems they are motivated to drop as much inventory as possible before its too late.

From the Mail bag

The Grunt gets letters from time to time with readers who ask for his opinion on real estate matters. I am going to be presenting them for your education.

My wife and I are in contract, about to close on a purchase of a three-bedroom condo in Manhattan, and we are considering renting it out for a single year until we are ready to renovate it to our specs and move in. It is perfectly livable as-is, painted in generic white, but we want to make cosmetic improvements to our taste.

I know that you have highlighted the need for a landlord to perform a credit and background check on a tenant before the lease, but do you have any other advice? In particular, we are looking for a tenant who will take a one-year lease and not expect to renew -- besides mentioning that fact up front and only offering a one-year-lease without a renewal commitment, is there anything else we should do to make this go smoothly? What do you think about renting the apartment, which is close to [neighborhood],, to one of the [large companies] in the area to use as a crash pad for [employees]?

Below is the Grunt's response.


Dear NAME WITHELD BY REQUEST

Thank you for reading my blog and asking for my opinion regarding your situation. I will do my best to impart as much knowledge as possible.

Congratulations on your upcoming purchase. What you are doing in terms of renting out your condo unit is quite common in Manhattan and you are in a particularly great situation because the inventory in the rental market has been scant due in part to the hot sales market. It has been so expensive to buy that most people are simply staying where they are until the market cools off and there is more sales inventory available.

You should find out what the rental policies are for your building. Although you own a condo and rules are more lax comparing to co-ops from my experience management companies will not let you run roughshod and may require processing fees upward of hundreds of dollars. I have known co-ops that charge upward to thousands to sublet because they want to discourage sublets and investors because those residents are less likely to take care of their apartments if someone else lives in them. Banks are also wary of doing mortgages of buildings that are less than 50% owner occupied.

What are there policies regarding access? Will the doorman hold the key for anyone to see? Do they require brokers to sign in and show their pocket license? Do they allow open houses? You have to find out what the rules before you begin playing the game.

If your apartment is priced properly it will rent immediately. The best way to figure that out is to contact several well know rental firms that have a vast database of listings and can do comparables for your apartment. When you are presenting your apartment to them, please be as specific as possible with the brokers in the descriptions and location of the apartment that way they can find similar ones they can compare too. You can also do your own comparable search by going on the NYT real estate section or craigslist. You should also ask the broker and the management company what apartments rent for in your building. You should definitely talk to residents who have rented in your building. YOU DO NOT HAVE TO PAY A DIME FOR THIS SERVICE! IF SOMONE DEMANDS A FEE FOR THIS TELL THEM TO GO TO HELL! THE REASON WHY THEY GIVE THIS SERVICE IS IN HOPES OF GETTING YOUR LISTING!

TALK TO A LAWYER ABOUT THE RISKS OF RENTING YOUR APARTMENT! PARTICULARLY ONE WHO HAS EXPERIENCE IN REAL ESTATE ISSUES. ALL IT TAKES IS ONE TENANT TO TURN INTO A SQUATTER AND YOU WILL BE LOOKING AT LEAST TWO YEARS IN COURT.

You should determine what type of listing you want to present. An open listing is one that does not belong to anyone in particular. Whoever lists it usually gets 10% off the top of the listing when it closes but they do not control the deal. The great thing about the open listing is that you will get the widest amount of access to the brokerage community. Some brokers like open listings because they can make more money off these listings since the fee goes to them and their company directly without being responsible for the apartment. An advantage of having an open listing is that there will be an army of brokers advertising and marketing your apartment without costing you time or money. Another advantage to an open listing is that you also have the flexibility of renting it out on your own without having to pay the broker. Either way any costs for marketing is on the broker and application fees the prospective tenant’s responsibility. And the agent gets paid by their client.

Is there a caveat? Yes because unless the brokers are signing in or they are being escorted there really is no way of keeping track of their comings and goings. The Grunt had a rental listing that he was going to show but the doorman prevented him from entering because the landlord instituted a new policy of no showings during the weekends. The Grunt immediately complied with the orders of the doorman and asked what happened. He was told that an agent from a company that will remain nameless attempted access into the apartment but had no authorization resulting in an altercation with the doorman. The Grunt applauds the management company for their policy because there are people who have no business being brokers and the management is taking an active role in protecting their tenants.

Another option is the exclusive listing which is when you appoint a broker to play the gatekeeper of your apartment. It will be the exclusive broker’s responsibility to market and oversee showings of your apartment. The great thing about having an exclusive broker is that you have someone to hold liable if something goes wrong and that you have more control of the situation. The terms of showing and marketing are entirely between you and the broker in question.

A good broker will not only advertise on their website and the newspaper but will also send this listing out to other brokerage companies .Now if another agent from another company brings in a client to make a deal it becomes a co-broke situation where the two brokers have to share the fee. This is where barriers of entry starts to pop up. When the Grunt started in rentals a lot of brokers hated co-brokes because they always got less money. Nowadays the attitude is co-broke or go broke because the lack of inventory on the market has made it harder to rent out apartments.

Competing brokers are usually not allowed to advertise co-brokes. Therefore it is the exclusive broker’s responsibility to advertise the property. Depending on the company, their resources maybe limited.

The exclusive broker will always get a full 15% fee in a co-broke. It is an unwritten rule that the visiting broker will not ask to negotiate on the fee. The rent maybe but the fee is untouched. Therefore the full fee might present as a barrier to entry for someone renting your apartment if they can’t afford it.

You are on the right track with renting out the apartment to a [large company] because you could have the [large company] act as the guarantor to assume full responsibility of your home during the rental period. Another option is to contact rental companies and ask for their corporate relocation departments who will be more than happy to assist you. They usually have exclusive accounts with [such large companies]. Or you could try RELO, which is a relocation service. They can refer you to a broker in your area.


Timing is going to play a key role in determining your lease. Your intention is to renovate your apartment before you officially move in. It would be best to speak to several contractors and present an idea of what needs to be done and what you intend to do. I am not a contractor but having someone living there may have an affect on the renovation process or it may not at all. I do not know. Having a tenant may put the apartment at risk if something gets damaged or if the tenant decides to stay beyond their lease requirements.

Throughout the whole application you must make your terms clear to all parties involved from the broker to the tenants insuring that everyone knows what they are getting into.

In terms of the application I highly recommend you doing your own credit reports. It costs a couple of bucks but you can pass that onto client. Also you should ask for a letter of employment and the copy of some type of photo identification e.g. passport. You might want to do a background check. It’s entirely up to you.

My final recommendation is this: Talk to residents in your building particularly ones that have a 3 bedroom and have rented it out, find out what there experiences were, find out the policies of subletting, talk to brokers and get comparable rents for similar apartments, ask them benefits of exclusive or open listings. THEY DO NOT CHARGE A DIME FOR INFORMATION! Talk to your contractor to see if what you are considering is feasible and will work out for you. TALK TO A LAWYER ABOUT YOUR LEASE , CREDIT REPORT AND THE LIABILITIES OF RENTING YOUR CONDO! DO NOT TRY TO BE DONALD TRUMP! PICK A LAWYER WHO HAS EXPERIENCE IN THESE MATTERS! DO YOUR OWN CREDIT REPORT AND DO NOT TAKE ANYONE’S WORD ABOUT THEIR FINANCIAL SITUATION UNTIL YOU HAVE ROCK SOLID PROOF. IF YOU PLAY FAST AND LOOSE YOU COULD END UP LIKE THIS POOR WOMAN.

I hope this helps. If you have any other questions please feel free to ask.

Grunt

You don't know Jack

In a recent entry of the Gothamist, a troubled reader told her tale of woe regarding two brokers who showed her the same apartment and ended up taking the apartment through the broker who charged a lesser fee. The other broker’s response was that what she did was illegal. The Grunt jumped into the comment fray when some responses presented inaccurate information and ended up in a tete a tete. For your entertainment the Grunt will present that link to you.

Fee shopping can be risky for the client because if they have signed a fee agreement with one broker and the same apartment through a cheaper broker then the client has no choice. I had a client once who was going fee shopping and was willing to pay me if I charged a lesser fee. When I informed my former manager of this he said no dice, either full fee or nothing at all. So if any of you decide to play this game you are opening yourself to a lot of problems. Also if word gets around that you are a fee shopper, agents maybe less inclined to work with you.

There is nothing wrong with fee shopping. Its a free market. But its also a free market for the broker.

A side note, The Jack you ignorant slut line is a play on the famous SNL skit between Jane Curtin and Dan Ackroyd. It was meant in jest.

My latest response to Jack follows below.

I see you have been eating those lead paint chips again Jack.

Your information about real estate is akin to a recipe for pork kreplach. In other words, its wrong.

First of all, the fee is 15% of the first years rent, not 20%. Depending on the agent and management company it can be negotiated. How this number was determined, I have absolutely no clue but it simply was not pulled out of the air.

I should take offense to the comment about agents doing nothing more than opening a door and walking around and not much else. But I realize you do not have the time to learn the facts of the real estate industry due to your strenuous schedule of being a professional tourist taking pictures of bright shiny signs. But I would be more than happy to enlighten you.

The duties of a real estate agents range from marketing apartments, contacting landlords and property management companies for listings, preparing leases, running credit reports, finding comparable apartments for clients and providing pertinent data to clients. It’s a helluva lot more than simply than walking around and opening doors.

By the way what Ivy League school did you graduate from? You were so quick to pick up that I am an agent from my comments. Unfortunately I picked up nothing of value from your words.

I never said the broker is always right. I am just telling it like it is. The customer is very important but some of them can be annoying as hell with unrealistic expectations, bad credit, or the fact they do not have the money to afford the apartment.

If you think finding an apartment with a broker is stressful try being a rental agent. A rental agent has to go through the same experience of everyday of finding an apartment and has to be ready to educate someone who has no idea what they are doing.

If you notice the sharp tone in my comments it annoys me when people who consider themselves authority on the subject just because they had a couple of run ins with some brokers who start shooting their mouth off about the subject. Their words offer nothing but trouble to the rest of society. However its one of prices we pay for our constitution. You know what that is right? Although I find your words misleading I will however defend your right to speak. However don’t expect me to remain silent when you say something that is false. Don’t worry. I take great pleasure in correcting a member of Phi Beta Kappa.

Jack, if you have such a grievance against the rental industry then I challenge to get a license and join up with a firm. See if you can make a difference and be one of the good guys. The great thing about being an agent is that you can make your own hours, which will give you plenty of time to fulfill your vital duties as a day-tripper. Surely a Harvard graduate such as your self can accomplish this task.

Share and Share alike

I came across this entry on "Shared Utilities" from the Realtygram Blogger



Here is the summary from her blog.

"the tenant called the gas company because he was concerned about...the gas furnace malfunctioning. The gas company inspected everything and noted that the furnace was fine, but that one of the radiators was located in the other half of the duplex. The tenant then demanded that the gas service be switched over to the landlord. The gas company... had no choice but to do this.

"[PA] statute provides that from the date of notice to the utility, the landlord is obligated to pay the utility bill and that the service cannot be thereafter metered in the name of any tenant until the foreign load is removed. ..the statute suggests that the utility may only pursue the landlord for the arrears on the utility, not the tenant. Therefore, the landlord was placed on the hook for not only for future gas bills under a yearly lease (preventing him from raising the rent to cover the extra costs at least for a year) but also the tenant's profligate use of the gas in the past. No remedy existed for the landlord against the tenant.

"As described above, this scenario is generally known as a "foreign load" problem. Tenants hear about this from time to time, and they will look for areas where, if they turn off their fuses/circuit breakers, common area lights (for instance) turn off. Then, they spring it on the landlord."

THESE LAWS MENTIONED APPLY TO PENNSYLVANIA! I HAVE NO IDEA IF NEW YORK STATE HAS SIMILAR LAWS. MY RECOMMENDATION IS TO CONSULT A LAWYER WHO IS EXPERIENCED IN THIS SUBJECT AND AREA OF YOUR CHOOSING.

Although this blog focuses on Pennsylvania real estate law, I do recommend it for its great articles and anyone interested in becoming a landlord should read through them. Some of the articles have helpful tips including this one on handling abandoned property.

I realize I am being rendundant about consulting a lawyer but I can't stress this enough. The laws play a critical role in determing the success or failure of your property. Ignorance or the inability to comprehend the law is no excuse and you will get laughed out of court if you use that as a defense.

A lawyer once told me that when you litigate that is when the lawyers have failed. Litigation is something you want to avoid as much as possible but it is a fact of life for landlords. But when it does happen you better know your rights and you better have put in the proper propection in your leases.

Babs on the Bubble

This is not a joke. Straight from the Real Deal

Corcoran, who sold her company to conglomerate NRT in 2001 for $70 million but retains the post of chairman, also weighed in on the prospect of a housing bubble.

"Of course there's no bubble," she said. "I think the bubble theory is nothing more than an intellectual expression of people's typical worry that good times can't last forever. When your marriage is going well, you worry there's a problem on the horizon. I think it's more psychological than fact."

Sigh. And this is from a woman who admits to investing conservatively according to the New York Times.

"I'm a rather timid investor," Ms. Corcoran said. "I'm always trying to buy for a bad market."

Ms. Corcoran likes to buy small buildings, "usually three- or four-story town houses with tenants in place." In a typical deal she gets financing for up to 75 percent of the purchase price and seeks properties where she knows that she can cover her monthly costs, even if rents are low. If there is a little profit left over after mortgage payments, taxes and other expenses, so much the better, but enhancing cash flow is not the goal. "I'm looking for a retirement fund so I can sell the building 10 or 20 years out," she said.

Broker Busybody and other fun things

Today I was doing an open house and while I was talking to the buyers in the elevator a fat squat white woman loudly interrupted me saying that what I said wasn't true and as she left she said I should do my research. I tried to laugh it off. But it really got me pissed because I am familiar with the building and the way she acted was full of malice. I found out from the doormen that the busybody is a broker in the building who used to make major bucks selling and buying in the building but apparently she is entering the willy loman /old Gil/Shelly the machine phase in her life.

I ran into her again in the elevator and when we got out I yelled out loud to the BIC about the history of the building in front of the Busybody, he responded that he heard someone challenged you on that. I pointed out the Busybody as she was leaving he shrugged that she was just a miserable broker.

I hate brokers who start trouble for no reason. No wonder she is not the hot dog she once was. Who would want to work with such a negative little wretch?


The open house was slow probably because of passover however it did not limit its entertainment appeal. A woman came in demanding why the apartment was so expensive. It became this bipolar conversation where I tried to explain the market and she would shoot back that she did her research and then she would say I am not here to do your job your the expert in this field.

I was not in the mood to play games with her so I brought her down to the BIC where she engaged in him in her devil talk.

The most amusing moment was when a resident came to look at that aparment. She was in the same line but on a high floor. When she heard the price she almost had a heart attack. She had closed on her unit in July in the 400 price range. The current apartment was on the market for 300 more.

Afterwards I went to show one of my rental listing. The client asked if the fee could be reduced. I laughed at her and explained not in this market. She was a sneaky one because she put an application on an apartment already. But it was worth laughing at her. I always had to bite my tongue as a rental broker when I was asked these types of questions.


Nasty stuff in the NYT. Not only about open houses but a woman using her influence in the condo board to force a neighbor to sell to her. Real estate is dirty. The Grunt accepts that. But to take advantage of an eldery woman pisses off the Grunt to no end. Ann H. Cook may deny any wrongdoing and the board is practicing CYA by not disclosing but its damn obvious that she was playing dirty pool.

The Closing Day Disaters article was hilarious. The Grunt can relate. At one closing the buyer and seller were at each others throats because the buyer kept asking to see the apartment to take measurements for renovation purposes before the closing.

After the closing went down, the buyer got pissed because the seller ripped out the kitchen cabinets and the buyer wanted them back depsite the fact that buyer hated them and was going to gut the kitchen anyway. The buyer just wanted to piss off the seller.

A lawyer once told me about a closing that nearly imploded. This buyer put an offer on an aparment on the condition that a set of large antique mirrors that were in the apartment would be part of the deal. The owner agreed and the offer was accepted. Closing day arrived and the buyer did the walkaround and much to her horror the mirrors were gone.

Her broker had forgotten to tell the lawyer to include the condition regarding posession of the mirrors in the contract. The seller did not and freely absconded with them and was not giving them back.

The buyer was in tears, her mother was on the phone screaming for her to walk out. The lawyer took the broker aside and told him point blank he was on the verge of losing the deal if he didn't do something. The two brokers put their heads together and agreed to each give up a signifigant portion of their commission to the buyer to cover the mirrors.


Btw, Joyce Cohen informed me that it was "a figment of my imagination" that she would be calling me out on my last entry. I stand corrected Ms. Cohen and once again I am humbled by the Huntress herself. When will I ever learn never to second guess such an esteemed member of the press?

More Open House Hijinks

The New York Times recent article on How Not to Behave at an Open House goes to show how Curbed and the Property Grunt are on the cutting edge of real estate journalism because as far as the Grunt knows Lockhart was the first on the scene and the Grunt was right behind him writing about the wacky hijinks that occur in open houses way before the New York Times. I have no doubt that my email will full of replies from Joyce Cohen of how wrong I am. But I am willing to risk it.

It’s an excellent article and I hope people realize what brokers go through when we put on these lavish productions to sell a home.

One of the quotes caught the Grunt’s eye

Window shoppers seem to commit the most serious lapses. "People who have nothing better to do with their lives but look at apartments on the weekend - those are the people who come in and use the bathroom," Mr. Orenstein said. (Note to buyers: always ask permission to use the bathroom, and never - repeat, never - draw olfactory attention. Parents, this includes diaper changes.)

This happened to the Grunt at a recent open he was holding. A broker came in with her daughter to look at the apartment and asked if her very young daughter could use the bathroom since they had just come from a party in Central Park. Grunt couldn’t refuse and showed them the bathroom. When the Grunt was letting in another group of buyers into to the apartment, he realized that the mother had left the bathroom door open allowing everyone to see her daughter go about her business unattended. The Grunt was horrified and politely and firmly asked the mother to stop what she was doing and shut the door.

Of course I realized that the mother had no intention of bringing a buyer at all but treated the open house as a rest stop. Learn some manners people.


It is however a hopeless situation for brokers.

Joanne Tavis, a senior associate broker at Halstead Property, observed one well-heeled buyer sample from a bowl of cherry tomatoes and then stuff his pockets with them on his way out. "What was I going to say, 'Stop, thief, tomatoes?' "

There is only so much a broker can do and it is common knowledge that open house agents have to exercise a tremendous amount of restraint at open houses which visitors often take advantage of.

Coming Soon: Rental Survival Guide

Ok folks. The Grunt has been getting his ass kicked since Wednesday over a deal and it doesn't look like its going to end. But I promise to you good readers that I will put out the rental survival guide.

Do not mess with me

I have had a really horrible day. All I have to say is this. Certified checks are non-negotiable when it comes to first, last month's rent and security deposits. DO NOT TRY TO BE CHEAP AND TRY TO NEGOTIATE A PERSONAL CHECK! AND DO NOT PISS OFF THE BROKER! YOU COULD LOSE YOUR APARTMENT IF YOU ARE NOT CAREFUL!

Going to bed.

Poachers beware: I will beat you with a chair

The Grunt recently had a near psycho broker experience while doing an open house. Now as I have stated in my recent entry about open houses, they are a useful tool in not only selling a listing but also acquiring buyers and more listings or they can be complete hell.

Fortunately this was not as bad as what the McNulty's had to deal with.

In the classic movie Highlander, immortals engage in duels with katanas and cutlasses and the winner takes the power of the loser by decapitating them. One place they do not do battle is holy ground aka, church or temple.

Open houses are treated with the same reverence as holy ground. It is a professional courtesy that brokers do not conduct business at an open house out of respect for the host broker. That means not handing out business cards, discussing with their buyers the pros and cons of the apartment in the presence of other buyers or engaging in any type of activity that they might disrupt or take away business from the open house. In the Grunt's mind an exclusive is not just about money but it represents the blood sweat and tears a broker has put in to get that listing. Getting an exclusive rarely happens over night. It takes years of mailings, talking to owners and tons and tons of rejection. Even when a broker gets an immediate exclusive it is a result of their toil in the past. That is why the Grunt maintains a firm policy of diplomacy when entering an open house even if the agent hosting it is a complete ass monkey.

At one open house the Grunt welcomed an agent from a brokerage that the Grunt never heard of and was accompanying a couple. All was well until the agent in question asked a pair of buyers that were leaving the open house if they had representation and gave them her card in front of the Grunt.

The Grunt was about to, as they say, put that agent into a world of hurt. But thought better of making a scene and berating the agent in front of a group buyers and chose discretion as a better part of valor. But the climate turned icy cold courtesy of the Grunt who went Iceman on her ass. The agent in question left with her buyers and tried to butter up the Grunt on how good the place was. Grunt smiled fakely and slammed the door.

It doesn't end here. This over bleached blonde, leather skinned victim of the Jersey shore proceeded to cause more trouble at another open house. At this open house the seller was present and the agent gave her business card to the seller in front of the seller's broker. The wench was lucky that she left with a full set of teeth because doing that is tantamount to urinating onto someone's new Ferrari in front of their face. The seller responded by handing off the card to the seller's broker.

Leatherface pushed her luck further by joining in a conversation between the selling broker and another owner who was interested in selling their apartment. Apparently leather face’s buyers were not important enough for her to attend to. The selling broker, in a nice manner, told her to go to hell.

The Grunt will be the first one to admit there are areas of gray where people need to make judgment calls. But there was no gray here. The poaching agent was reaping the benefits of the work of the hosting agent and was being disrespectful to the owner's home by treating it as their own personal office.

In retrospect I realize this broker was playing a scam by having her friends act as buyers, they served as her cover so she did not look like a broke down transvestite hooker trolling for johns in the meat market.

The Grunt will not post the agent's name because the Grunt is a big believer in karma. What you reap is what you sow. No permanent damage was done to the Grunt also posting her name will not stop other idiot agents from conducting themselves in this unprofessional manner. However to all the hardworking brokers out there please be aware of this type of behavior.

I guarantee that if this dumbass agent keeps pulling this scam she will run into a broker who will not be civil as the Grunt. I know of brokers who will come out guns a blazing (not literally) at people who look at their listings the wrong way.

To quote Preacher

When I'm done with you, you're gonna wish your daddy pulled out early.

This is what is in store for this broker if she steps on the wrong toes in her theft of buyers at open houses. If you don't believe me Leatherface try pulling this on William Talcott May. I am sure you will enjoy his reaction.

This is not the way to get buyers ladies and gentleman. You get buyers through referrals, open houses and listings. The only thing you get by poaching is a ton of bad will, a bad reputation and bad karma.

This is just another symptom of the overabundance of untrained and ignorant agents. Hopefully once the bubble pops it will be an end to all of this insanity.

Endure the Undurable or please shut up.

There was a recent article in the New York Times about Steve Butler who was on the verge of baseball greatness as a left handed pitcher and first baseman of the Westminster Christian Warriors won a Florida state championship in 1992, then USA Today's mythical national title. Mr. Butler’s abilities were of legend. He was Westminster Christian's best player and All American edging out two of his teammates, Doug Mientkiewicz now playing for the Mets and the Yankees A-Rod, Alex Rodriguez.

So where is Steve now? Pitching for the Astros? The Florida Marlins? None of the above the closest he comes to baseball is working as an athletic director at an elementary school and putting a suburban youth sports league together. This is not a bad thing. What he is doing is a noble profession. His perspective about his life is less than noble.

"I don't want to say I'm in pain," Butler said. "It's more regret. Obviously, if I had a chance to do it over again, I would do it differently. Without a doubt."

According to Butler his biggest mistake was playing basketball and twisting his ankle, which resulted the speed of his fastball decreasing significantly because of the air brace he wore during his senior year. The scouts also noticed his performance was lacking and he was not picked up. Alex however was having a field day, which ultimately crushed the pride and spirit of Mr. Butler who could not deal with the fact that his teammate was eclipsing him.

I think it’s obvious what the problem is. Its not that life gave him a bum deal. Mr. Butler is a big baby. Because the obstacles that he has faced is nothing compared to some great athletes of his time. Lance Armstrong was facing death from cancer and now holds the record for winning the Tour de France. Did you think Babe Ruth was a legend overnight? For every homerun he probably had a ton of strikeouts. Michelle Kwan has the Gold medal snatched from her fingers more time than I can care to remember but she is still out there.

Butler is not sure if he can make his dreams come true. He said he would need six months to train, lose a lot of weight, to quit his job and neglect his youth league.

What Mr. Butler is truly afraid of is failure. All of the barriers of entry can be overcome with a proper attitude and the desire to do better. But Mr. Butler has become so conditioned to being a loser has been that he has no will to fight for what he wants.

If he wants to be a service to these kids and if he truly loves baseball he will either let go of his past and move on with his life or he will drop everything and give it one more shot. Either way he has a lot to live for. He’s only 29 and he is quite healthy.

If Mr. Butler thinks his life sucks he should read the recent issue of Time magazine of wounded gulf war veterans. There are people who lost limbs, suffer from severe burns and a case of posttraumatic stress disorder that prevents one veteran from leaving his family farm. Those are people who have every right to simply give up. But do they? No. They take the offensive. They refuse to lie down even thought their lives have changed drastically. They still have the will to keep fighting for the life they deserve. Bit by bit these brave souls are slowly putting their lives back together.

One of my favorite episodes of Star Trek the Next Generation is called Tapestry which starts with the assassination of Captain Jean Luc Picard and he hangs between the balance of life and death when Q shows up and presents Picard a flash back of his life which as a young man at the academy who gets into a fight with some Nausicaans in a bar over a dom-jot game and ends up being stabbed in the back. In one of the rare moments of his career, Picard shows a deep sense of regret and shame over the incident, which was a result of him being a brash and arrogant young man.

Q offers him the chance to change his life and Picard jumps at the opportunity. He goes back in time and prevents the incident from happening much to his disgust from of friends but all is not well when he returns. Riker is Captain and Troi is his first officer while Picard is of considerably lower rank. He tries to explain to them that he is capable of more but they counter that his record shows otherwise. That is when Q pops up and explains the ramifications of Picard’s Faustian bargain. When he was severely injured and had to get a mechanical heart Picard made a vow to be the best Starfleet officer he could be. He realized that the situation was his own doing and that he had the power to be a better person.

Because Picard avoided that incident, in this time stream Picard is more interested in maintaining the status quo and not taking risks to better himself.

Picard realizes that incident played a key role in making the man he is now and demands that Q send him back to play out that moment in time which Q complies.

The point is that who is to say if Mr. Butler had not made these so called mistakes and done the right that he would be on the path to fame and fortune. For all we know if he had done the right thine he could have had ended up in the same place or worse. The point is we don’t know and all we can do is learn and move on.

You are all probably wondering why I have such venom in my heart for this man. Because of the disgust and anger I have for him is the same for myself. I have often caught myself in his position of thinking of could have, should have, would have. Not just in real estate but in my life itself. You say to yourself if I only did this, if I only I did t that and the result of this routine is self paralysis. And I know many people who have done this to themselves.

The Grunt’s foray into real estate has been a maddening journey of rejection, aggravation and tedium that has been sprinkled with very few moments of joy. But the Grunt is sticking it out. Even during the times when the Grunt wanted to give up there was always another day for another victory. The Grunt is the champion of lamenting the past, of drowning in the despair of lost opportunities. The Grunt is so good that whenever a moment of utter regret sneaks up on him, he is able to recognize it and put it aside.

I am unsure where this journey will take me but I do know that if I want to progress in anyway I need to have the proper attitude of simply going forward and never giving up till the end. Do I get tired? Sure. But I can rest when I’m dead.

"The kids I coach, they'll come up to me and ask if I played with Alex Rodriguez, and I'll say, 'Yeah, I played with him,' " Butler said. "I tell them that those who are talented are in a special situation. They need to grasp it and take hold of it."

He should follow his own advice.

Plagiarism in the blog world

This was recently posted on the Realtygram Blogger

This work is licensed under a Creative Commons License. Technorati and Feedster users are seeing double today. Double posts of TheREALTYgram Blogger articles are showing up since an anonymous blogger at Real Estate Blog started posting my articles in full, complete with headlines and text, sans source material and without any attribution to the author (Frances Flynn Thorsen). It appears that the "new" host for my material is using RSS feeds for its blog; I will make an appropriate change to my setup to restrict the length of the articles that can be appropriated in this fashion. There is no "contact" point or information about the author of the Real Estate Blog, although there is a column of Google ads to accompany the "found news." Tacky, tacky, tacky.

It is very bad form to pass someone else's work as your own. If you are going to use someone's else's material please acknowledge it. The Grunt would not be here without the help and inspiration of bloggers like Frances. What really gets me angry is this parasite is probably making money off someone else's work without their permission or payment.

Grunt's policy on this type of behavior is the same as NATO "An attack on one of us is an attack on all of us."

Mind your manners. Or someone will mind them for you.

A call for questions for rentals

The rental seaosn is about to go into full swing and the Grunt is creating a rental survival guide. If you have any questions regarding rentals in the city feel free to email me.

Aparmentratings: A force to be reckoned with

Several weeks ago the Grunt was contacted by Jeremy Bencken regarding his most excellent site Apartmentratings.com and mentioned it would be featured in the New York Times. Grunt waited eagerly and was not disappointed with this excellent story regarding the site and a lawsuit that was filed by a landlord who felt comments left by reviewers of their property were of a libelous nature.

Congratulations to Katie and Jeremy. This is a service that is a long time coming and provides a great resource for renters looking for apartments. It’s brilliant because the content is provided by the users and the site is presents it. The Grunt wished he thought of this first and perhaps the Grunt wouldn’t be running around like a maniac on the weekends and instead spending it in Lincoln Center.

The user functionality is fantastic since the GUI has the feel of the Zagat’s guide for restaurants. The Benckens have a lot of experience in user acceptance testing because the Grunt is unable to find any stone unturned. The map is a great feature and pretty much every base is covered in terms of user needs which also include property managers since it allows them to respond to comments.

Mr. Bencken said that this isn't the first time he has been subpoenaed - it has happened in three other cases brought by landlords - but that, so far, he has not been named as a defendant. The 1996 Communications Decency Act, he said, protects him from liability for comments posted by third parties. Eugene Volokh, a professor of constitutional law at U.C.L.A. School of Law, said that courts have "overwhelmingly" supported Mr. Bencken's view.
To discourage lawsuits, Mr. Bencken posts the Communications Decency Act on a section of the site reserved for landlords.

That's a nice touch. You should kiss your lawyer for that advice.

A site like this will be priceless in Manhattan since it will allow people to find the apartment of their choice without the usual hassle of finding a rental.

The information, he said, should also be useful to investors who are looking for details on the rental income produced by various properties. There is no way to confirm the rent data, but Mr. Bencken said he couldn't think of any reason that tenants would lie in providing the information on rents.

Jeremy, everyone has a reason to lie. For instance a landlord who owns a set of crappy properties could pull a pump and dump by using the comments section and talk up about how great the building is and lure unsuspecting renters. It could also be used as a weapon to hurt an apartment building by trashing their reputation by its competitors or disgruntled tenants which is the argument of the Troy Hills Village owners.

The Grunt has been a mark of this type of tomfoolery when he used city search to find a good restaurant and ended up in an overpriced tourist trap.

This site will definitely be disliked by rental brokers since it takes away their biggest weapon in their real estate arsenal which is information and it will also keep brokers on their toes if they attempt to prey on the ignorance of clients by passing off crappy apartments. Apartment hunters will also have a better idea of what the market has to offer in terms of price instead of relying on the opinion of a broker. The Grunt likes this feature because the Grunt has dealt with so many unrealistic clients who are seeking something that does not exist and need to be educated by seeing what is really in their budget.

Every medium has a risk for abuse. The last thing the inventors of email thought their medium would be used for was spam for male impotency drugs. As far as I can tell Apartmentratings.com has followed every rule in the book in limiting any abuse by users which include deleting comments that violate any laws.

The Grunt can guarantee that there will be a war between this site and the Manhattan real estate industry if Apartmentratings.com expands in rating residences for sale and brokers. If Apartmentratings.cominstalled a feature allowing users to do sales comps on this site for Manhattan, it would make Barbara Corcoran drop a brick in her Gucci girdle because the skill of providing comps is often used as an opening line to get the loyalty of a buyer or seller. That is why brokerage companies guard their database of listings with the zeal of a cold war era MI 5 agent. It is from this database that brokers are able to formulate a set of listings that fit the requirements of buyers and sellers. Take that away from them and you are taking a two by four to their knees.

Co-op boards are the Skull and Bones of Manhattan. They answer only to themselves and if you are rejected by one they usually never give you a reason why. It’s sort of like Vegas. What happens in a Co-op board stays in a Co-op board.

A Co-op board would be foaming at the mouth if their inner workings were exposed on this site because their property values would plummet if anything unsavory was exposed. It would also give justification for the residences to vote in a new board if they feel their board is not up to the task of managing their building.

The flipside is that the applications of success are endless. If a site was created to rate brokers and co-ops, best rated brokers would get a ton of listings and customer traffic and the best rated residential buildings would increase in value since they would be the most popular ones to buy into.

Regardless of the volcanic possibilities of this site can cause I truly feel that the benefits outweigh the risks. Renting and buying a home is a daunting task especially in this market. I am a big supporter for anything that helps consumers, however users should treat this site as one of many tools in their search for an apartment and exercise a strong policy of due diligence by examining every aspect and point of view by talking to residents and other resources that are related to the building of interest.

"Our goal," Mr. Bencken said, "is to help consumers make better decisions." The site accepts advertising, but not from apartment owners. "That would be a conflict of interest," he said. Advertisers include moving companies, roommate services and sellers of renters' insurance.

It looks like they are on their way.

The cat is out of the bag. There is no turning back. Apartmentratings.com is the first salvo in the changes that will occur in the real estate business. Either get with the program or get left behind. The Grunt does not plan on being left behind.

Identity theft: Federal Trade Comission to the Rescue

On a recent entry by the Realtygram Blogger the Federal Trade Commission has initiated the Fair and Accurate Credit Transactions Act aka FACTA that will go in effect in June which will further aid consumers in the fight against identity theft.

The great thing about this act is it places the burden of responsibility upon the parties that engage in business of credit reports particularly in the disposal of credit reports. According to Facts on Facta

Disposal of Consumer Reports

In the past, the practice known as “dumpster diving” has provided identity thieves with a wealth of personal data. Irresponsible information disposal by businesses has been cited in numerous instances of fraud. Now, under new FACTA provisions, consumer reporting agencies and any business that uses a consumer report must adopt procedures for proper disposal.

The FTC, the federal banking agencies, and the National Credit Union Administration (NCUA) have published proposed regulations to implement the new FACTA Disposal Rule. To see the comments submitted by the PRC and other consumer organizations in response to these rule proposals,

At one rental office the Grunt knows one manager never purchased a shredder because the manager was just too cheap. Its not uncommon for credit reports to be still in the possession of agents and are stored in their unlocked desks. The Grunt knew one agent that went through almost 30 files of clients and destroyed the credit reports and other personal information by hand when they were leaving their company/

According to the Federal Trade Commission features of FACTA will include measures that will allow victims of identity theft to stop and repair the damage that has been done to their credit.

A provision that will require credit reporting agencies to stop reporting allegedly fraudulent account information when a consumer establishes that he or she has been the victim of identity theft;


A provision that requires creditors or businesses to provide copies of business records of fraudulent accounts or transactions related to them. “This information can assist victims in proving that they are, in fact, victims. For example, they may be better able to prove that the signature on the application is not their signature;” and,


A provision that will allow consumers to report accounts affected by identity theft directly to creditors - in addition to credit reporting agencies - to prevent the spread of erroneous credit information.

The Grunt's advice is the following, when you are applying for an apartment adopt a chain of evidence strategy of keeping track of where your credit report is going whether it starts from agent or landlord. Get a receipt for the credit report if you are paying for it as evidence of a paper trail and a copy of the credit application. Also ask the agent in question who will be handling the credit. If you are a victim of identity theft and circumstantial evidence shows that it occurred during the time frame of your application you at least have a paper trail and can hold someone accountable.

Also get your own copy from the agent; after all you paid for it. If you are getting one through a landlord or property management company they may not be as willing to part with the credit report. My advice is to consult with a lawyer what your rights are when dealing with a landlord/property management company.

Know FACTA and the FTC information regarding it cold so you know that your rights are not being violated. If you want to keep an agent on their toes ask if they have a paper shredder and if they don't have one grill them on why and that they are in danger of violating federal law. One of the advantages of using a broker is that they are beholden to certain laws but some agents need to be reminded of that.

Identity theft is serious. The Grunt knew of one person who had the misfortune of inviting one in their home. It was not pretty.

Entering a World of Hurt: Real Estate Taxes

Here is a developing story on the mortgage tax situation.

It looks like the mortgage tax has gone up .05% (5 basis points) in Manhattan and 11 others counties*. The increases were included in the new State budget which was passed on time for the first time in 21 years. Although Governor Pataki has until April 21 to veto it, the hike is now being collected by the title companies.

New York is not the only place getting hit by the toll keeper. Last night NBC news featured a story on how real estate taxes are pricing out older people out of their own homes.

What is the cause for the higher taxes?

The average American home now costs $191,000, up 12 percent in the last two years. Property taxes are also going up, rising by an average of 10 percent since 2001.

During the economic boom in the 1990s, state governments piled up surpluses, but now they're strapped for cash and have less money to pass on to local governments. So localities are forced to spend more of their own money on police, fire departments and schools.

"We're still on pretty tight strings, so we're continuing to make efforts to provide services with the limited funds that are available," says Bert Waisanen with the National Conference of State Legislatures.

Presented on pg 56 in the book The Warren Buffet Way by Robert G. Hagstrom, Jr.
Buffet's position on inflation was

"Buffet maintains that inflation is a politcal not an economic phenomon. Because there is, as yet no permanent restraint on government spending."

The distribution of federal funds is definitely based on politics not on needs. If it was based on needs the mortgage tax would not be raised in New York and Wisconsin would not be getting enough to bankroll to half the state. It just shows that some lobbyists are better than others.

All of you real estate investors remember, you are ripe for the picking for the state once you start to own. If they are in need of cash you will be one of the first groups they will turn to. And when the government's mug is empty they will hit your barrels to get their fill.


So remember real estate is not the ultimate investment that those Robert Kiyoskai cultists touts it to be. Not only do you have to deal with taxes You are more vulnerable to predatory forces including squatters, lawsuits and other unsavory elements that wish to drain you of your financial resources.

So what does one do? Learn the how you can prepare for this situation. Watch Suze Orman, be frugal, watch your debt, take care of your health. The list goes on. BUT YOU ARE THE ONE IN CONTROL OF YOUR OWN LIFE AND ONLY YOU CAN PROTECT YOURSELF. ACCEPT THAT RESPONSIBILITY AND YOU WILL BE ON YOUR WAY.

Praying for Peter

When I was a kid the first person I remember on ABC news was Frank Reynolds then he passed away and was replaced by Peter Jennings. I always admired Peter because he was so calm, cool and collected. He was the like the James Bond of news. I just imagine after the news ended he would invite everyone for debriefing and cocktails in his office.

Peter Jennings announced that today he was diagnosed with lung cancer. The Grunt loves you man and prays for a quick recovery. You are the last of the finest and I forbid you to lay down. You are going to fight this tooth and nail and you are going to win.

Give a prayer for Peter.

Bubble, Bubble, boy are we in trouble, part 2

An owner recently posted this comment on the PropertyGrunt regarding my bubble entry

What does your theory have to say about people who bought a 2BR in 1997 for what then was a decent price and what now seems a ridiculously low one, but cannot afford to trade up to a 3BR at current prices? (In other words, it doesn't help a bit that our apartment has appreciated 2x-2.5x; the 3BRs are stratospherically out of our range.) We are bursting this apartment at the seams, but I can hold on as long as I know that someday I might be able to buy a 3BR ! I am anxious for any crumb of wisdom you have.

The quandary that this reader finds themselves in is unfortunately quite common at this time. They have an apartment that has greatly appreciated in value due to the market and that they bought it almost ten years ago. However the good fortune the sellers are experiencing have stymied their efforts to upgrade to a bigger space due to the fact that this insane market has put that 3 bedroom out of their budgetary reach.

However all is not lost dear reader. There is a possibility of finding that 3 bedroom but you need to be aware of certain things.

Although the market is hot, at this moment certain classes of apartments are more popular than others which include studios and one bedrooms. People are looking for starter homes, anything they can get their mitts on that they can afford. So far I have not even had one buyer who wants a three bedroom. Not that they do not exist they are just far and few from the Grunt's perspective.

This is a good sign because it is most likely that a significant number of 3 bedrooms have been sitting on the market for awhile so sellers maybe a bit concerned. So if there is a three bedroom that you have your eye on but is out of your price range, the seller might be more open to a lower bid if there has been no offers.

If an owner wants to sell an apartment it has to be priced correctly and often that can only be determined through trial and error. From my experience I have had listings that have not moved in months and when the price is reduced it moves immediately. So no harm in watching and waiting.

I think the best deals are the pied a terre three bedrooms since they are not being utilized for the owner to justify their cost. If the owner recently purchased the apartment as a pied a terre they may need to unload it if their financial resources are spread too thin. If you are the only game in town they maybe more partial to negotiating on the price.

The ideal situation is that when the bubble pops, the buyers dry up and you find an owner that needs to sell since they can't afford to hold on and weather the storm. Bear in mind what affects them may affect you since you are also selling.

I want to make it quite clear that you should not base your decision on this entry. My recommendation is the following.

1.Talk to several good brokers and find out what the status of the market is for three bedrooms and two bedrooms and get comparable prices.

2.When you are looking at the 3 bedrooms find out which ones have been on the market longest and figure out whether they are pied a terres or not. The ideal situation is to find an owner who does not have the luxury of waiting out the storm. Price your apartment to what you feel is best. But you have to be aware of market trends. If its not priced properly it will not move. Be ready to compromise whether you are selling or buying.

3. You are a broker's dream because you are both a seller and buyer therefore they can double their pleasure off of you. If you sign up with a exclusive broker you can make it clear to them that if they want to sell your apartment it is contingent that they find a three bedroom that fits your requirements. I guarantee that they will go through hell or highwater to accomplish this because of the lack of inventory on the market makes your apartment quite valuable to them.

4. To quote Monty Python and the Holy Grail "RUN AWAY!" If you can stand it. Sit back and relax and wait till things cool off.

Best of luck good reader. Keep us all posted.

Resuscitating your credit.

The Grunt has touched upon the subject of credit particularly why its so important and how you can screw it up.

A recent New York Times article shows how one can repair their credit through rapid rescoring.

Your credit is the foundation of your financial health. A good credit score is a key to open the door to the basic needs we take for granted including housing transportation and communication. Take care of that puppy by paying your bills on time and not having credit card debt. Do not play if you can't pay. And remember. CREDIT CARD DEBT IS NOT GOOD DEBT TO HAVE AROUND! GET RID OF IT AS SOON YOU GET IT OR TRY TO AVOID CREDIT CARD DEBT ALTOGETHER!

Quickly Improving A Credit Rating
By JAY ROMANO

HOME buyers in search of a mortgage know that their credit history will play a key role in the outcome. And anyone who has tried to improve a credit score is probably aware that doing so can take months or years.

But it is sometimes possible for a borrower to raise his credit score in just a few days, using a strategy known as rapid rescoring.

"I've had a fair amount of success using rapid rescoring for clients," said Oded Ben-Ami, a senior loan officer for Sterling National Mortgage in Great Neck, N.Y. "And the couple of hundred dollars it costs is negligible compared with the benefits of getting a better interest rate, quicker approval and a higher maximum loan amount."

Mr. Ben-Ami said that when a borrower applies for a mortgage, the lender orders the borrower's credit score from a credit bureau. That score is based on information compiled by one or more of the three nationwide credit reporting services - Equifax, Experian and TransUnion. (Since each service collects information independently, each could have different information on file.)

The score calculated by the bureau, known as the FICO score (for the Fair Isaac Corporation, which developed it), is then used to determine not only whether the individual qualifies for a particular loan but also the interest rate that will be charged.

Since credit scores are so important, Mr. Ben-Ami said, it always makes sense to ensure that the information on a credit report is accurate.

But if a borrower discovers errors, it can take months of back-and-forth correspondence between the borrower, the creditor and the credit reporting service to correct them for free. Since mortgages often have to be secured within 30 to 45 days, it is often impossible to change a score quickly enough. But with rapid rescoring, a score can be changed in days.

Gerri Detweiler, a Sarasota, Fla., credit specialist and the author of "The Ultimate Credit Handbook" (Plume, 2003), said that with rapid rescoring, the loan officer, working with the lender's credit bureau - which charges an extra fee - can improve a credit score by considering new information.

Usually, she said, that is done by correcting erroneous information. If a report reflects a judgment that should not be there, and the borrower can offer written verification from the creditor who filed the judgment, the credit bureau can eliminate it.

It is also possible, Ms. Detweiler said, that negative information is being carried long after it should have been removed. "Collection agencies are notorious for reporting accounts for longer than they should be reported," she said, noting that accounts sent to a collection agency should be dropped after seven and a half years.

Lenders and credit bureaus will also work with a borrower to find other ways to improve a score quickly. A major factor in the FICO score is how close a person is to his or her credit limit, she said, so it may be possible to increase a score by spreading existing debt over several accounts or paying down debt on an account near its limit.

Ms. Detweiler said that since it costs anywhere from $30 to $120 to correct an individual item on a single credit report, it could cost several hundred dollars to correct multiple items on more than one report. "But in terms of the ultimate cost of the loan," she said, "that could be a small investment with a huge return."

Ryan Sjoblad, a spokesman for Fair Isaacs, said that if a borrower with a score of 674 qualified for a 7.82 percent mortgage, that borrower should be able to get a 6.13 percent rate with a 700 score. On a 30-year, $300,000 mortgage, the monthly payments would be $2,163 and $1,824 respectively. Over the life of the loan, the interest paid would be $478,806 and $356,569 respectively, a difference of $122,237.

You are always in our prayers

The Pope was the only one that the Grunt ever knew. I wish you Godspeed, friend and hero of the people.

Bubble, Bubble, boy are we in trouble.

There has been massive media coverage about the real estate bubble. All one needs to do is look at Curbed.com and Inman news and see the laundry list of articles preaching us to repent for our sins in refinancing, buying and selling. And if you have seen my recent entries I touch upon the subject of the coming of the storm.

Do I believe the bubble is going to pop? Yes and it’s been a long time coming. All of the factors are coming into play, high oil prices; the election is over, a weak dollar and Greenspan hiking up the rates.

How will it play out for all of us? This is my take.

The buyers will dry up for obvious reasons. Low interest rates were an incentive to bend over for obscenely high prices in the Manhattan market. Without those incentives there is no reason for buyers to engage in the Battan death march of open houses every Sunday. The low inventory was already a barrier entry for foreign buyers but the weak dollar lured them across the Atlantic like Michael Jackson to a cub scout meeting. But once the dollar becomes stronger the foreign buyers will be fleeing Manhattan like an acquitted Robert Blake. God, I love metaphors based on current events.

There is the argument that it will turn into a buyers market because a significant portion of the apartments that have been bought were second homes therefore unessential and costly making selling a more viable option.

But the Grunt thinks this argument is moot. Manhattan buyers are not stupid. From the Grunt’s perspective the buyers are with great means with vast financial resources. Even in a down market it wouldn’t make sense for these new owners to put their property back on the market if they are going to lose money on the sale especially if they fought tooth and nail to find it. Instead they will pull their properties off the market and wait for a comeback.

Even in this seller’s market some sellers have begun to change their minds because what is out there is overpriced and does not fit their tastes. They would be better off just to wait.

Maybe they will be stuck with the mortgage payments and other costs. But if they were smart, and anyone who buys in Manhattan usually is, they probably did the numbers and figured out how to make it work so they can hold on to their properties without taking too much of a hit.

The casualties of this cannonade will be the brokers. Already we face a drought of inventory in the real estate market and the bubble bursting will simply exacerbate the situation. It’s hard for brokers to make a living when there is nothing to sell or buy.

Please understand that I have no empirical evidence to back this up. It’s a theory based on my own personal experiences and intuition. I could be completely wrong. Or I could be on the money. Bottom line, let’s be careful out there.

Btw, Eyewitness Up Close is on at 10:30 regarding the West Side Stadium

REBNY on ABC TV

If you want to see the President of REBNY, Steve Spinola, wax poetically about the winning bid for MTA railyards.

Steven Spinola, REBNY President, and New York Jets' President, Jay
Cross, will be appearing on Diana Williams' Up Close, discussing the recent
MTA selection of the New York Jets' Bid and the West Side Development,
on Sunday, April 3rd at 10:00 AM on ABC, Channel 7

It should be interesting to watch. BTw, daylight savings time ends this Sunday so change your clocks.

A salute to a Normal Life

The whole world is now on Pope watch after the Pontiff took a turn for the worst yesterday. As twisted as it may sound, the media world has been preparing for this for quite awhile. Around the Vatican deals were negotiated to rent out the hotel roofs for camera crews to get the best shots of the area. Obituaries were being prepared years in advance for this event because the media wanted to be ready at a moment’s notice.

The Grunt has been thinking about spirituality a lot particularly with real estate. Spirituality and real estate are two subjects that people usally do not associate with each other but I see a very strong connection to both. Real estate can be quite trying at times since you are dealing with a variety of factors that are out of your control. From angry buyers to sellers who are unwilling to budge on prices to the interest rates that are now beginning to climb up causing tension in the market.

I was recently interviewed by Brian Blum who is a writer for Classifed Intelligence that is a subscription based service that covers the interactive classified advertising market. Brian did an excellent job with the article. Unfortunately you have to subscribe to the service in order to read it. Come on. Its worth it.

His blog, This Normal Life, displays his fantastic writing skills and his unique take on life. I found an entry catching my eye titled Why Aren’t You a Winner? that starts out with a friend of his being asked this question when he was raising funds for a new company and discusses it with Brian who has a simple yet brilliant comeback to the questions which is:

Why aren’t you a winner, asked the VC to my friend? That’s the wrong attack. The real question is, why don’t you see that you already are?

Which is the reason why the Grunt is saluting Brian Blum. His blog is a sanctuary for great thought and insight. I think of him as a blogger rabbi and its nice place to go find some peace and meaning when things get La Vida Loca.

Recently his daughter Merav has become ill and has been hospitalized. Please join me in praying for a quick and speedy recovery for his daughter.