Property Grunt

Wednesday, June 29, 2005

This is a really bad idea

This was released from Freestar media who have decided to make their views known about the Supreme Court's decision on eminent domain. Not that I think this will ever come to pass I just do not think its the brightest idea to get on the bad side of a Supreme Court Justice.

For Release Monday, June 27 to New Hampshire media
For Release Tuesday, June 28 to all other media

Weare, New Hampshire (PRWEB) Could a hotel be built on the land owned by Supreme Court Justice David H. Souter? A new ruling by the Supreme Court which was supported by Justice Souter himself itself might allow it. A private developer is seeking to use this very law to build a hotel on Souter's land.

Justice Souter's vote in the "Kelo vs. City of New London" decision allows city governments to take land from one private owner and give it to another if the government will generate greater tax revenue or other economic benefits when the land is developed by the new owner.

On Monday June 27, Logan Darrow Clements, faxed a request to Chip Meany the code enforcement officer of the Towne of Weare, New Hampshire seeking to start the application process to build a hotel on 34 Cilley Hill Road. This is the present location of Mr. Souter's home.

Clements, CEO of Freestar Media, LLC, points out that the City of Weare will certainly gain greater tax revenue and economic benefits with a hotel on 34 Cilley Hill Road than allowing Mr. Souter to own the land.

The proposed development, called "The Lost Liberty Hotel" will feature the "Just Desserts Café" and include a museum, open to the public, featuring a permanent exhibit on the loss of freedom in America. Instead of a Gideon's Bible each guest will receive a free copy of Ayn Rand's novel "Atlas Shrugged."

Clements indicated that the hotel must be built on this particular piece of land because it is a unique site being the home of someone largely responsible for destroying property rights for all Americans.

"This is not a prank" said Clements, "The Towne of Weare has five people on the Board of Selectmen. If three of them vote to use the power of eminent domain to take this land from Mr. Souter we can begin our hotel development."

Clements' plan is to raise investment capital from wealthy pro-liberty investors and draw up architectural plans. These plans would then be used to raise investment capital for the project. Clements hopes that regular customers of the hotel might include supporters of the Institute For Justice and participants in the Free State Project among others.

Tuesday, June 28, 2005

Hello Kelly Goodbye BK Squeeze

On a recent flight from the left coast the Grunt spotted Kelly from the Apprentice 2 on the same Jet blue flight. He sat all the way in the front in row 1A and was accompanied by a very attractive blonde. It was one of those weird situations where I recognized him and he knew that I knew who he was so he made every attempt to avoid eye contact. Which only happened once since I sat all the way in the back. No. I did not approach him or introduce myself. I mean what would be the point? We really have nothing offer to each other and I am sure he gets carpet bombed by real estate agents itiching to do a deal or to at least to say they talked to him. The last thing he wants is some idiot talking to him while he is sleeping on his flight. In my experience you want your flight to be as pleasant and uneventful as possible. I once had a 12 hour flight where I was afflicted with food poisoning and thought the flight would never end

The funny part of was that he chatted a bit with the flight attendants who had no idea who he was until he left the plane.

It was announced on curbed that BK Squeeze has decided to withdraw from the Brooklyn scene and move to the grassy hills of Suffolk. The Grunt would like to wish him and his family the best of luck. From what I read of the entry I honestly feel that he is doing the right thing. As long as he can commute properly to the city and is able to save money for a house, he should be alright. Best of luck to you BK.

Friday, June 24, 2005

Irrational Exuberance: The man behind the book

The term Irrational Exuberance has been used written and heard so many times it will probably be considered one of the great cliches associated with the real estate market of this period.

Robert J. Shiller, the man who coined the term Irrational Exuberance which is also the title of his book, is not exactly the most exuberant guy in the world.

Over some bar food, the Grunt and a compadre were dicussing the market and Shiller's book came up. My friend who is a Yalie refuses to read any of Shiller's work. Back in his Yalie days my friend had a class taught by Shiller who moaned that Shiller was the most boring professor he ever had and ended up dropping his class. We both agreed that the man is brilliant but just about as exciting as paint drying.

The Grunt isn't surprised by that assessemnt. As brilliant as he is, Mr. Shiller barely held his own against the panel of mortgage and real estate brokers on the CNBC special on the real estate bubble.

Thursday, June 23, 2005

Justices, 5-4, Back Seizure of Property for Development

Here is the article.

A divided Supreme Court ruled Thursday that local governments may seize people's homes and businesses against their will for private development in a decision anxiously awaited in communities where economic growth often is at war with individual property rights.

Justice Sandra Day O'Connor made her opposition clear

Justice Sandra Day O'Connor, who has been a key swing vote on many cases before the court, issued a stinging dissent. She argued that cities should not have unlimited authority to uproot families, even if they are provided compensation, simply to accommodate wealthy developers.

The impetus of this decision was from a lawsuit filed by Connecticut residents. Their reaction to the decision was obvious.

Connecticut residents involved in the lawsuit expressed dismay and pledged to keep fighting.

''It's a little shocking to believe you can lose your home in this country,'' said resident Bill Von Winkle, who said he would refuse to leave his home, even if bulldozers showed up. ''I won't be going anywhere. Not my house. This is definitely not the last word.''

The Justices who voted on this decision stated their justification for their decision.

Writing for the court, Justice John Paul Stevens said local officials, not federal judges, know best in deciding whether a development project will benefit the community. States are within their rights to pass additional laws restricting condemnations if residents are overly burdened, he said.

''The city has carefully formulated an economic development that it believes will provide appreciable benefits to the community, including -- but by no means limited to -- new jobs and increased tax revenue,'' Stevens wrote in an opinion joined by Justice Anthony Kennedy, David H. Souter, Ruth Bader Ginsburg and Stephen G. Breyer.

Justice O'Connor's response was the following.

''Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random,'' O'Connor wrote. ''The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms.''

The Grunt is torn on this issue. I am all for redevelopment and progress. If someone can make a silk purse out of sow's ear more power to them. But what about the homeowners who are SOL? They get screwed pretty badly in the process because they are are out of a home and they need to find another place to live.

I do concur with Justice O'Connor that the parties with the deep pockets will be the one to benefit from this decision.

To all of you homebuyers and investors, you must institute due diligence protocols to the point of night sweats. I mean examine each piece of property from to roof to toehold. Get cozy with the locals and see what the word is on the street. Is a big shopping mall coming to town? If so, where is it going to be located? Who are the people behind the development and who are their contacts in the government? The more aware you are the more likely you will be able to make a decision that will avoid the powers of eminent domain.

Treat eminent domain like a natural disaster. You can't fight a hurricane but you can figure out hurricane season and create and implement a strategy that will get you out of harm's way. That is the same thing here.

Friday, June 17, 2005

Doormen part 2

In a previous entry the Grunt discussed the power of doorman. It's a nightmare situation when the buyer and broker are waiting in the lobby but can't see the apartment because someone forgot put a name down.

It feels like a flashback to the Palladium.


Brokers are full of stories about doormen who cockblock brokers from entering an apartment. However I can't be angry at a doorman for doing their job. If something goes wrong, the doorman is the one to take the brunt of the blame. All they need is one pissed of resident to make their lives a living hell.

Its kind of ironic. In the resident food chain the doorman is simultaneously the king and low man on the totem pole. The Grunt never likes to get into fights with doormen. Its very very bad for business. Also I know they are just doing their job.

Tuesday, June 14, 2005

More bubble talk

The Grunt spotted this article in the Wall Street Journal about what would be aftermath of a bubble.

Greg IP makes several points out why a pop in real estate would be far more devasting.

The key difference is that stocks are purely financial investments. You can sell a stock on a whim, and you don't have to run out and buy another. By contrast, people live in houses, and if they sell they have to move -- which is both costly and time-consuming.

Stocks also move as a single market more than houses do because they are subject to many of the same influences and often are bought and sold as part of a broad portfolio. Houses are more subject to local influences. Stocks can also be sold "short" by people who don't own them, or via derivatives. You can't bet on declining housing prices the same way. That means when houses appear overvalued, it's harder for contrarians to nudge them the other way.

With these driving forces of higher transaction costs and longer transaction periods IP points out another possible result

The stock bubble did speed up the adoption of new technologies and business models such as Internet commerce, and those benefits have persisted even after the tech bubble burst.

If everything goes to hell in a handbasket, alot of people will want to liquidate as quick as they can. In my previous entries about the perfect storm and outsourcing rental brokers I think the pop will accelerate these trends. When panic hits the streets owners are going to want to sell ASAP and they are well aware of the fees included in selling so if an entrepeneur presents a less costly solution I think defintely the market will go for that.

Looks like craigslist will be getting more business. Everyone invest in Ebay.

Bloomberg does it again and say a prayer for Kathleen

It looks like the Grunt was right on the money. Bloomberg came in at the 11th hour and brought back Olympic hopes. According to the NYT our esteemed mayor was able to get a deal a build a next to Shea which the Mets will pay for.

It looks like we might miss that bubble afterall. Let's see what happens in July.

I read this article on Inman. A broker by the name of Kathleen Yaggi from North Carolina was shot three times by June McCoy. Kathleen is now listed in good condition. McCoy got into a standoff with police and ended up shooting himself. He is listed in critical.

Feel free to email your support to Kathleen at her website. I have never heard of this happening in New York but apparently McCoy had a history of trying to lure female agents. There is alot of insanity that comes along with this business and you take it with a grain of salt. Unfortunately these situations do occur. It really makes me angry when I hear stories like this that happen to agents because all we are doing is our jobs and it is a reminder how vulnerable we can be.

Sunday, June 12, 2005

Return of the Westside

In a recent entry of the Property Grunt, the Grunt lamented of the loss of the west side stadium and the potential loss of the Olympics. However the Grunt held hope that something would be waiting in the wings. Hope springs eternal.

According to a recent article in the NYT, developers are busting through to the westside like Orson Welles at an all you can eat Chinese buffet.

Jules Demchick of the J.D Carlye group places some of the credit on rezoning.

"It's ironic, because Bloomberg wants to be remembered for the Olympics," said Jules Demchick, president of the J.D. Carlyle Group, who is building a 478-unit apartment tower on 42nd Street, between 11th and 12th Avenues. "But he accomplished the Hudson Yards rezoning. That's going to be memorable, because it's going to be a major, major area that will be developed."

The article gives a laundry list of developers who throwing tons of cash like a rabid Christian Slater at Scores, for property to develop on.

Steven C. Witkoff of the Witkoff Group is in the process of buying a large parcel across 11th Avenue from the Jacob K. Javits Convention Center, between 36 and 37th Streets, where he wants to build a 1,500-room hotel on a platform over the Amtrak railroad tracks.

The Rockrose Development Corporation, which has become the largest property owner in the district in recent years, is putting together three large development sites, including both sides of 10th Avenue between 37th and 38th Streets, for as many as 1,400 apartments. The company told community board officials it hoped to begin construction this fall.

According to real estate executives, developers Douglas Durst and Gary Barnett are among the bidders for a site now owned by Verizon, on 11th Avenue, between 34th and 35th Streets, where zoning allows for a large commercial building with apartments in the tower.

Brookfield Financial Properties owns a large development site on Ninth Avenue and 31st Street that is zoned for 2 million square feet of office space, plus apartments, and the company says the loss of the stadium project has not reduced the number of phone calls it is getting from housing developers.

"We're going ahead with the project," said John Zuccotti, Brookfield's chairman. "We have interested developers who want to build the residential right now. They're still as anxious today as a week ago."

Its not all smiles and sunshines though. On a propsed extenion of the 7 train from Times Sqaure there is concern that it might suffer the same fate as the westside stadium.

However there are those who feel that a great step has been taken despite the downfall of the stadium.

In general, though, developers say they are upbeat about the area, no matter what gets built on the stadium site. H. Henry Elghanayan, a principal in Rockrose, the largest landowner in the area, said the administration is taking the wrong approach in lamenting the stadium.

"They're viewing this as a defeat," he said. "They should look at where we are and what we have accomplished, with the zoning and a beautiful master plan. It can and should go forward."

Saturday, June 11, 2005

The Right to Quiet Enjoyment: I hate noisy people

At 9:10 this morning my next door neighbor began blasting their music and has not stopped. I am not in a good mood. I hate noisy neighbors with stereos. It is rude, direspectful and against the law. Yes, you heard me against the law. In New York city when you rent an apartment you are entitled to quiet enjoyment. Playing music this loud is not only uncalled for but illegal.

When I first moved into this building I was immediately assaulted by an audio barrage from an upstairs neighbor. Taking my landlord's advice I politely asked the gentleman upstairs to lower it down. His reponse was sure and for the next two years he harrassed me by not only playing his music loud but also stomping on the floors.

It was only after the super intervened that I got some quiet. Despite the fact I was never rude or disrespectful to him he considered me his arch enemy for life. He finally moved but was replaced with another obnoxious bastard. This time I took the law into my own hands and called 311. After two visits by the cops, the tenant knew his place. However the super got wind of what I did and requested that I don't do it again since police cars around the building present a bad image. Since then I have not called the cops due to noise problems. But I am conflicted since I am harassed by the behavior of this neighbor but at the same time I have an amazing super and do not like piling on the workload. However if my neighbors continue to act like this I will be forced to deal with this situation through legal means.

Currently I have another audio challenged neighbor who had a party on Saturday night which included a live trombone player and enough bass to kill Flava Flav.

Please do not get me wrong. I could care less what a person does in their own apartment. Their lifestyle is their business. But once their personal business affects my lifestyle than I get pissed. It is wrong when someone does that. To me it is tantamount with someone telling to convert to their religion.

I realize why landlords do not like to get involved with the noise issue because it is a complete exercise in futility when you are dealing with a subject that is completely subjective and leaves no real evidence of any wrong doing. Also it is just annoying dealing with a jerk off who feels it is their right to afflict tinnitus on the whole building's population.

Noise is something that landlords should not simply brush off. It is a quality of life issue that needs to be dealt with. As I have stated before a tenant is entitled to quiet enjoyment. If it is being violated it is a bad thing. That means the tenant has a right respond legally to anything that violates their rights. And in New York City, tenants have a large arsenal of laws at their disposal.

Landlords, I urge you to take advance action when meeting with potential tenants. Make them understand any type of disturbances will not be tolerated in your buildings and also make them sign noise riders where they agree to adere to the standards of quiet enjoyment.

I actually feel a great sense of pity for those who constantly need to be barraged by skull splitting bass. From my experience it means the following.

1. They are too poor to go to a club.
2. They are lonely.
3. They do lots of drugs.

But my pity only goes so far as does my paitence.

For those of you who have been unjustly given this affliction I recommend calling 311 and informing of them of your situation and they will send New York's Finest to make your neighbors understand that playing loud music is a bad thing. I STRONGLY ADVISE NOT ADMITTING CALLING 311! IT IS BEST TO STAY IN THE SHADOWS. WHEN IT COMES TO MUSIC PEOPLE GET CRAZY. Btw, Bloomberg, I love you for this. ALSO PLEASE CONTACT A LAWYER AND FIND OUT WHAT OTHER RIGHTS AND OPTIONS YOU HAVE!

I do not advise knocking on the door and using diplomacy because you have no idea who you are dealing with behind that door. Let me put it this way. When a police officer responds to a domestic call the first thing they do before they knock on that door is to iniate defensive protocols because they have no idea what is waiting behind them. You should exercise the same. That means if you are woken up at 3am in the morning by rave music and knock on your neighbor's door bear in mind your neighbors may be under the influence.

If you do decide to talk to these people please bear in mind they will either be responsive to your needs or they will retaliate with extremem prejudice. Usally it's the latter.

It is in my opinion landlords will be more aggressive in dealing with loud tenants when they realize that the police are showing up on their properties more often and could indicate to the general public that there is something wrong with the property that requires their presence. Hence, making it less desireable. Remember, for landlords its all about the Benjamins. If there is something that is a threat to their financial gains, they will move hell and high water to resolve it.

To the people of New York City who like to turn on their stereos full blast. My advice is to invest in an ipod and a good set of head phones. What you are doing is illegal and the technology exists that can prove you are violating the quiet enjoyment of others and can be considered a health risk for those who are physically sensitive to noise.

Getting the police knocking on your doors is the least of your problems. You could be dragged in court by the tenant or landlord for various reasons including driving out tenants or for medical expenses. Remember this: A LAWSUIT ALWAYS SHOWS UP ON YOUR CREDIT REPORT AND IT IS THE FIRST THING THAT A LANDLORD LOOKS FOR. IT IS ALSO GROUNDS FOR REJECTION WITH A CO-OP BOARDS AND EVEN CONDO BOARDS ARE JUMPING INTO THE ACT. WHAT COMES AROUND GOES AROUND. PISS OFF THE WRONG NEIGHBOR AND YOU COULD DRASTICALLY LIMIT YOUR HOUSING OPTIONS FOR THE FUTURE!

Friday, June 10, 2005

Bubble Talk

Below is an email Karen Hoyt recently sent me an email regarding the whole bubble situation.

Let me ask. Why do you think there is such a "bubble?" I think that there is some "inflation in the market" but supply and demand has always been a part of our economics. When the demand changes then we will see a decline or "leveling" out. Everyone that had Micro- or - Macro Economics understands this. But for now as you can tell the demand is much greater than the supply in most markets. Talk to my girlfriend in Houston TX whose house is listed at 199,000 and can not sell her 3500 sq ft 1 year old home and that is what she paid for it.... I think that the media targets the area that home prices have increased substantially like this area... but the home prices have been undervalued for 10 years and are now having what I call a market adjustment. Still for me to buy a $190 w/a pool in an upscale golf neighborhood is still under market to most areas but 2 years ago I could have bought it for $95 because it was a sleepy town with undermarket real estate that was undiscovered. So in comparison to other areas in the state this area is STILL undervalued for what you can buy. Yet most people don't know about it. I recently purchased ON the golf course a town house that has 2500 sq ft 3 bed/3 bath for $170... where else can you get this?? So we are no where near the "top " of the market here.... send me your investors! I'd be happy to help!

ps ... feel free to post!

Which I did and responded with thisis.


Here are some articles that may be of interest to you.

Washington Post

I have plenty more where that came from.

But I definitely will put up your post. You do raise some strong points about this whole bubble situation and I am open to other perspectives. I think we are on a bubble because of interest rates are going go up among other things.


Then she responded to my reponse. Warning! Its rather lengthy.

First you can not look at the fact that interest rates are rising....Because some how they fell. Make sense? When I started in real estate in 1990 interest rates were just under 10% I remember doing a million VA loans because the VA's rate was 7.5. There was no 100% financing except with VA loans. Now I hardly ever do them due to the VA funding fee. The economy was not in that great shape back in the 90's. I remember telling sellers that they would have to bring money to the table at closing because they only owned their home 5 years and appreciation was nill. We sold real estate on the basis that it was a tax advantage. Not an "investment." Interest rates started to slowly decrease because of the sliding economy. Once they were lower the re'fi boom took place. You have to realize that our industry is a very ~creative~ industry. Mostly the loan industry. Once one certain business dries up another is formed. As the re'fi business dried up a few brillant loan companies decided to offer 100% financing 80/20 loans 90/10/10 etc to find those buyers out there with NO MONEY DOWN. Once they went away, and the rates still declining more re'fi's took place. Now just when it seems as if anyone who could buy a house did is now done.... comes more lower rates and guess what "hey honey, what do you think about us buying a little condo on the beach somewhere....we can put nothing down OH and I hear I can we can get an interest only loan....and we can rent it out to snow birds in the winter when we are not using it... you know honey, like an investment."

Now that the re'fi market has just about dried up, and we have a million lenders and a million sub-prime lenders willing to lend to anyone increased the market pool of people who can buy, whether it be a 2nd home or rental property (thanks to Carlton Sheets and his groupies). So we now as it seems have a huge supply of buyers and no houses to supply thus increases the value, thus multiple offers, thus flippers in new construction. Builders want 10% down which investors have. A lot of home buyers don't so the investor buys it flips to the buyer who is doing interest only no money down. It is a win win for both parties. Except the 2nd buyer pays more for the home. Which leads us to today's market. Now to review todays market we have now Negative Amortization loans, no DOC no INCOME VERIFICATION loans. You don't even have to have a job or assets to buy a home in today's market. How is this the "bubble's" fault? Back in the day you had to have a job, show like months worth or pay check stubs. Have excellent credit. Have paid your taxes as a citizen... that has all changed. We have EXPANDED the buyer pool but not the Housing pool (as fast). Until the builders build more houses than there are buyers will we see a decline in value. In your area in NYC there is NO more land. So that drives the prices. Where I am there is plenty of land to build on, as long as there are no Scrub Jay's living on your land. Interest rates have to go up. What goes up must come down and vice versa. It is called the economy. Rates do not go up or down just for the real estate market but for a lot of other factors.

Housing Markets go up or down due to not just interest rates but a lot of other factors such as schools, crime, medical facilities etc. Look at Houston again... seems like no one wants a house up there unless it is brand new construction.Yet I can sell 1965 year old houses with aluminum wiring and only 1400 sq ft all day long in this community because people want to live here. A+ schools, low crime, close to the beach and a quiet small community that is wonderful to raise your children in. I am no economist, but I don't believe in a real estate "bubble." Market and location determine the value of properties along with supply and demand. I sold houses in excellent neighborhoods all day long at 9 %, if people want to be in a certain area they will buy, regardless of the rate or price. I don't think we will see any huge "bargins" if the market softens, people are too smart these days. I think there may be a leveling off as supply increases and demand decreases. Personally I think the "speculative buyer" may be the one that feels the pinch when they can not flip the home for slightly more than what they paid for it and then they have to pay capital gains, commissions, closing costs only to find themselves in the hole. I am not a huge supporter of "flipping new construction." Investment properties for the long haul or rehabs I support. I love nothing more to sell a crappy home to an individual who is going to beautify the neighbhorhood by rehabbing this eyesore and putting a great new loving family in it. My two cents...hey it was free.

Then I recently got this comment in my blog

"I have heard on the wire that there will be no pop in Manhattan because of the lack of land... "

That was said in Tokyo too, 16 years ago. They crashed, and crashed HARD.

I remember that Japan had a bubble economy but I am unaware of how bad real estate got hit. Whoever wrote this could you please provide evidence of this statement? I am just curious of how bad the crash was.

The objective of this entry is to to let loose with the bubble talk. I mean everything. Whether you believe there is one or its complete bunk. I want you all to lay it all out. Bubble anxiety has been at a fever pitch and it doesn't help to keep it all in. So click on my comments and write down your opinion of why or why not a bubble will happne and back it up with whatever you can think of. And feel free to be as open as you want.

Wednesday, June 08, 2005

The Olympics: The flame is dying out

Unless you have been living in a cave you have probably heard the the Westside stadium is a no go. If you want more background on it go to this Curbed link because I am sure as hell not going to go into it. I am not going to point fingers or monday morning quarterback why it was blocked. The Grunt will give his opinion on what will happen next.

The Grunt feels that any hope of avoiding a bubble is now laid to waste. Having the Olympics would have made New York City bubble proof or at least create the perception that it was invincible with the positive press and the huge amount of development.

The Grunt realized early on that if the Olympics were to come to New York, property values would skyrocket not just in Mahattan but all areas closely surrounding New York City. All you have to do is look LA in 1984 and see how well they did when the Olympics came to town. Would there have been causulties in the Olympics came it New York? Yes. A signifigant portion of the population would been priced out, displaced and would most likely end up living somewhere in Buffalo.

But now it seems that any Olympic hopes have completely faded and there is talk of a strategic withdrawal according to this link.

All is not lost since another project is probably waiting in the wings ready to take over where the Olympics dropped off. And its not over yet. Who knows. Maybe at the 11th hour Bloomberg will turn this around.

Monday, June 06, 2005

Lawyers and landlords.

In this weekend's New York Times Real Estate secetion Pat Healy did a fantastic article on lawyers who embezzle from their own clients escrow accounts.

There has been a pattern of real estate lawyers who have violated the trust of their clients by pilfering from their escrow accounts and down payments. Motivation ranges from gambling debts to just plain old greed. A game of musical chairs is played by unscrupulous lawyers who rip off of one account and then cover up their tracks by transeferring to the victimized from another escrow account creating a nasty cycle of abuse.

The article makes several points that I wish to address the first being that solo practices seem to be more vulnerable to these situations.

Mr. O'Donnell, the prosecutor, said his office later traced the first thefts to 1999. To steal from home buyers, he took their 10 percent down payments. To steal from sellers, he stood in for them at the closing, then took a portion - or all - of the proceeds. Like many lawyers caught stealing from escrow funds, Mr. Rosen ran a solo practice. He had an assistant, but no internal accountants looking over his shoulders or legal partners whose careers could be undermined by Mr. Rosen's actions.

A large firm already should have a system of checks and balances. If someone is messing up the program, there are others around that lawyer to pick up the ball and also there should be a larger reserve fund to take care of any financial oversights incurred by the negligent lawyer. I want to make it clear that a big firm doesn't guarantee that no abuses will occur within their ranks but they do have a bigger infrastructure and resources to deal with these issues. There is nothing wrong with solo practices. I know many lawyers who operate in that fashion who are quite successful but they are quite smart in their dealings since they either have a specialty or have a select group of clientele they service.

Now besides his referral system why would anyone go to Mr. Rosen? Simple. He was cheap.

He charged a modest flat fee for steering a deal through contract and closing, often attracting clients who didn't want to hire a lawyer but couldn't navigate the process of buying and selling a home in New York without one.

You get what you pay for folks. One of the advantages of paying a higher price for service is that you can demand the best service. If your lawyer is dropping the ball you can demand that somone replace your lawyer. In New York real estate you need to have a lawyer because of the contracts and other legal issues that come with the territory. There is no way around it and it would be foolish to try to circumvent this requirement. You might as well get the best. Sure it might cost you a pretty penny but the alternative is helluva lot more expensive.

I found this part of the article most intersting.

"I moved here from Dallas, Tex., and when we sold our house there, there were no lawyers involved," said Ron Tamir, another of Mr. Rosen's clients. "I thought, 'What's the big deal?' I ran into my next door neighbor, and I said, 'You know a good lawyer?' "

Eleanor Danziger, 82, hired Mr. Rosen as she prepared to sell her home in Woodmere and move to Manhattan. After the closing, Ms. Danziger still had to perform a few minor fixes to bring her home up to code, so the buyers agreed to set aside $50,000 of the purchase price in an escrow account and release the money once the work was done. When the work was finished in June, Mr. Rosen said he would send Ms. Danziger the $50,000, she said. It never came.

"When we went to his office, we were not impressed," she said. "It was less than modest. My son is an attorney, so I know what a substantial practice can be. But this was like, by the seat of the pants. He wasn't making his money from the fees. He was making his money from the other stuff."

Ms. Danziger should have asked for and interviewed at least 5 other lawyers and get references from them. A lawyer is going to play a key role in executing your deal and you need to find the best which takes time and effort. But it takes more time and effort to get out of the jam a really bad lawyer has put you in.

Ms. Danziger should have also trusted her instincts. If she felt that Mr. Rosen's less than modest office maybe indicative of the quality of his work she should have ditched him immediately.

People, do not be afraid to offend somone if you feel your well being is at stake even it is based on a hunch. I have done this many a time even at the risk of losing a client. I had one situation where another broker pulled a bait switch on me which required my client to sign a fee agreement for a rental deal. I pulled out my client out of that situation immediately. My client was beyond annoyed and I know I looked like a complete idiot. But I didn't care. If that scum bag broker played games on me with the fee agreement there would be no telling what other chicanery she had in store for us. It all ended well since I found him a place.

Its important to find out what your rights are when dealing with a lawyer and find out what powers they have and how you can control them. It is also best to create a paper trail especially with funds and oversee any transfers of the funds to confirm their existence and that the lawyer has done their job. The best thing to do is consult other lawyers about this subject and to talk to their referrals and get a better idea of the character and level of ability of this individual.

But other than putting an explosive device around your lawyer's neck ala Battle Royale or having a team of ninja assassins stalking your lawyer's every move there is really no way to protect yourself a 100%.

As one former client put it.

There's no way to guard against something like that happening to you," Mr. Thaler said. "If someone's out to defraud you, they're going to win every time."

Those of you who wish to play landlord and think you are going to make a killing. Please read this article from New York Times Magazine from the Lives column titled Getting Real Estate.

This article clearly demonstrates that landlords especially first timers will always be stalked by Murphy's law. So what motivates someone to do all of this?

Ms. Cachin best sums it up.

I'm doing this for my daughter and my unborn son. I still think that if I can hold out, I will make a huge gain, and they will have something. That is the hope.

Sunday, June 05, 2005

Waiting for the fall.

Beautiful summer weather is practically a siren's call for buyers to come out to openhouses. On Memorial Day weekend they came out in droves much to the Grunt's surprise. But today was a complete bust open house wise. It was barely a trickle of buyers coming out much to the chagrin of the Grunt because now the Grunt has no stories of insane brokers or buyers to write about. In fact it was a complete ghost town.

One reason is that people are away for the weekend, however last year at this time there was a ton of traffic. But the only traffic was outside the building. Was today an anomaly? Or is the beginning of the pop? I have heard on the wire that there will be no pop in Manhattan because of the lack of land and there will only be a softening in the market but at this point who knows. The problem with bubbles is that no one knows when they have popped.

Saturday, June 04, 2005


Congratulations to Joyce Cohen on her one year anniversary of the New York Time's Hunt column. In honor of her first year anniversary Joyce has revisted some of the people featured on in her column which is titled And They Lived Happily Ever After?

It is a delightful column that takes us back to some of the memorable people who weeped,rejoiced or did both in their quest for an apartment in New York City and gives an update on their current housing status.

They include Sara Antunovich and Orion Montoya who I critiqued in a previous entry Rental Hazing and Laura DiMeo, who lived my worst nightmare living above a nightclub.

I highly recommend viewing the interactive segment of the column which provides an audio visual trip down memory lane personally narrated by Joyce Cohen who speaks in a sweet and melodious diction that is soothing to the ears of angels.

The Grunt declares Joyce Cohen's Hunt Column to be the best column on the personal real estate experience. She has provided knowledge and has helped countless New Yorkers in the do's and don'ts of finding a home in an entertaining, educational and no holds barred fashion.

The Grunt wishes you well and is looking forward to reading your column for years to come.

Friday, June 03, 2005

A response to Florida and a salute to the Hunt

Grunt recieved a response regarding his last entry about Florida from master agent and blogger Karen Hoyt. Her response to my entry was the following.

Really? Property Grunt you should consult your favorite realtor in Florida first. This is not true. They are still even doing 0% and neg am also.

So I decided to take her up on the offer and asked about which banks were engaging in unique lending practics. Her response was the following.

Chase, Wells Fargo, Countrywide, WCI Mortgage, I don't know of any lender that is restricting the downpayment. Maybe the "builder" is restricting the downpayment because they are nervous that the buyers that are buying pre-construction(speculation buyers) may back out if the market turns.

I am more inclined to believe Karen since her experiences in the real estate trenches of Florida are quite vast.

Please keep your eye out for this weekend's New York Times Hunt column in the New York Times Real estate section. Joyce Cohen has prepared a delightful column that I think everyone will enjoy.

More signs of a bust in Florida

The Grunt has heard on the wire that banks in Florida are refusing to do loans at 10% down. Apparently they are starting to get the heebie jeebies. Of course there is doubt that a bubble will pop in New York City. But only time will tell.