Property Grunt

Sunday, August 21, 2005

Holy Grail? More like Holy S**t

The Grunt found Alexandra Bandon‘s first hand account into broker hell blunt yet amusing. It is unfortunate, but her experience is usually the norm rather than the exception.

Although Ms. Bandon‘s account is for the most part accurate The Grunt would like to clarify certain points of her article in order to explain why she encountered such difficulty in finding an apartment.

The Bully
Most rental listings don't go on the market until a month before they're available, which means renters can't seriously begin searching until then. So a lot of agents and brokers capitalize on the panic that comes from that 30-day countdown to homelessness. They hit on your worst fears by sneering, "You'll never find anything in that price range" or "Apartments like that just don't come on the market that often."

The reality is that in a hot market particularly during the spring and summer, apartments that are priced properly go very quickly. Do some agents take advantage of the situation? I hope so. It is part of their job. But the situation itself is not their creation. It is the market which is created by the masses including Ms. Bandon who are seeking a home. Well-priced apartments go very fast and unless it’s a condo or co-op, it can take less than five minutes for an application to be accepted and leases to be signed.

Bullies are actually easy to spot because they answer questions with questions. "What exactly are you looking for?" they say when you ask about a listing. Gee, I think, I'm looking for something kind of like this ad I called you about. "When do you have to move?" they ask. Oh, I don't know, I'm in no rush.

The most valuable resource a broker has is their time and it is something they hate to waste. These questions that Ms. Bandon took offense to are asked to pre-qualify a client. They want to make sure that you are worth their efforts and if you are employed and have good credit. Any agent worth their salt will ask these questions.

If Ms. Bandon felt any type of bullying it was probably because she said Oh, I don't know, I'm in no rush. This pisses off brokers to no end because it means you are wasting their time since you are not serious about finding a place. It also prevents them from doing a proper search for you because they do not know if the apartment that you want fits your timetable. Even if you are not in a rush you should at least give them a rough estimate on when you plan on moving.

I encountered a Bully when I answered an ad for a "$2,690/2br - HOT, HOT, HOT WEST VILLAGE STEAL!!!!!!!!!!!!!!!" (Caps lock and exclamation points are very important to the Bully.) "Have you been looking only at no-fee apartments?" he scolded. "That's why you're having a bad experience. No fee apartments are awful."
Actually no fee apartments are pretty crappy. The reason why they are no fees is because there is something wrong with them that require a broker to put in extra effort to get them rented out hence the landlord has to pony up a months rent to the broker.

"But, um, this apartment is no fee," I said.
"That one's rented," he said. "I have a better one on 10th Street. It has a fee."
Ah, the classic bait and switch. Call about one property, and the Bully will tell you either it doesn't fit your criteria or it has already been rented. Then you'll hear about another, better, place, which just happens to require a fee.

As I have stated before in my previous entry on rentals, an apartment that is priced well is always going to go. That is why a good broker will have at least ten comps ready to show. Do bait and switch scams occur? Of course. But I think it is narrowed minded to assume that incidents of this nature are all bait switch scams without taking in account the other factors including a hot market and a shortage of inventory.

Take it from me: the moment a broker answers your question with another question, just hang up. If he's not focused on the ad he listed, he probably doesn't really have that property.

Whether it was intentional or not Alexandra most likely pissed off the broker when she was being vague about a move in date. I can imagine they felt this yenta was wasting their time trying to needle information out of them so they had to resort to more stringent measures to see if she was worth talking to or was just taking up valuable oxygen.

The Confidante
There are times, I have to admit, when an agent's rap was so good that I shut off my scam detector. That's what had happened with the woman on Charles Street. We had talked on the phone and she had listened. Listened - and told me I shouldn't look at the apartment I'd called her about because it wasn't right for someone of my maturity and sophistication. Instead she had the perfect place, on one of my favorite blocks. Yeah, girlfriend!

Then while we waited to meet up with the listing broker, we exchanged gripes about clueless agents. "I got into this business," she said, "because I was dealing with so many brokers who didn't know what they were talking about." My new best friend!
The Confidante uses empathy to gain trust. "Oh, you're going through a breakup? How horrible! You've only dealt with sneaky, stupid brokers? I hear you!"

Part of a broker’s job is customer service which means burying their face between your ass cheeks as tightly as possible. Trust is established through empathy, sympathy, beers or whatever means are available to them. That is why the best agents are usually actors since they have the skills to create empathy with their clients.

This woman was good, but she made one big mistake: she lied. Turns out she couldn't tell a town house from a doghouse. In the end, the apartment was actually decent. But it wasn't good enough to justify the fee, which couldn't be negotiated down from 15 percent because it was a "co-broke," a deal shared between a listing broker and an agent who brings in a client. And I wasn't about to lay out that kind of money for a girlfriend who had betrayed me.

Ms. Bandon really needs to get over her girl crush over this broker.
Her one big mistake was taking this personally. As far as the agent was concerned this was just business. She was using her charms to get the job done and I think she should be commended for it. Ms. Bandon should have figured it out that this agent did not take this personally when Ms. Bandon was screaming at her for her mistake regarding the town house that the broker didn’t put her foot up her candy ass. Did you think the agent was taking her abuse because she was her best friend? No. Ms. Bandon is just a paycheck to her. Whether she abuses or her not is not the issue. Whether she will pay the fee is all that matters. I know this is a harsh assessment but that is the reality of the business.

There is saying among rental brokers which is “Co-broke or go broke”. Co-brokes are usually the last resort for agents because it means they have to share the fee with some else.

The Grunt realizes that there is a lot of confusion over co-brokes and is going to do his best to clear it up.

I have an exclusive rental. A broker from another company brings in a client who sees it and puts in an application, which is accepted and leases are signed. Because I am in control of the deal I will demand and get a 15% fee, which will be divided between two the brokers.

The reason why there was no negotiation on the fee was because the exclusive broker did not want to reduce their cut. 15% is always the standard fee for a co-broke and do not even try to have your broker negotiate with the exclusive broker because the exclusive broker will tell you to go to hell.

The Tourist
A Tourist is an agent who's just getting his or her feet wet in a neighborhood and dabbles in its geography, architecture, history and culture. But he hasn't quite learned his way around, which can be frustrating for a local like me. More than one broker I worked with didn't even know how to get to the addresses they were showing me.
Matthew Mediatore from K&O Realty was a Tourist when I met him. Our first encounter ended without my seeing the property because Matthew had gotten the cross streets wrong and we'd missed the appointment. The next time I saw him, he tried to impress me about a place - which was, mind you, three blocks from where I lived - by telling me "Gwyneth Paltrow lives right over there." Yes, I know. And Liv Tyler lives there, and Sarah Jessica Parker lives there, and Hilary Swank is just up the street. Anything else you want to tell me about my neighborhood?
Over the next few weeks, however, Matthew shed his Tourist status. He made sure he showed me only town houses, not brownstones. (While a native New Yorker means a house when he says "brownstone," brokers use that term for any building sporting real brownstone on the facade. Many of them are actually tenements.)
He also didn't patronize me. Instead he was professional and honest, probably because he had owned a personal training business for 10 years before becoming an agent. Agents with life and work experience interact better with clients, because they already understand the value of working hard at good customer service.

One of the challenges a broker faces is learning the inventory. Even with the yahoo maps and mapquest, there are a lot of new brokers who are still beginning to navigate their way across Manhattan often at the detriment of their client. However that does not mean they can’t be salvaged. From what Alexandra has described this gentleman is making every effort to become a model agent and I am sure that Mr. Mediatore will be quite successful in this venture.

The Scavenger
If the Tourist is a hard worker, the Scavenger is the laziest. The Scavenger trolls newspapers and Web listings, finds an ad for a great place and then relists the place as his or her own. Often, the same apartment will show up five, 10 times in a row, all with different brokers' contact numbers.
It's not their fault, really. Because of the strong sales market, there's a glut of brokers and agents. In fact, New York's Department of State, which administers the real estate licensing exams, recently ended its walk-in test-taking policy in several locations, including New York City, because the lines to get in were snaking around the block.
I met my first Scavenger when I answered a "no fee" ad on the Craigslist Web site for an apartment down the block from me. It was listed for $3,175, but I took a chance that the landlord might come down on the rent for the right tenant.
I never actually met that agent because he sent a co-worker in his place. When we sat down with the landlord, I jumped right in. "Look, I have to be honest - I love it, but it's more than I can afford," I said. "But I hope you'll consider lowering the rent if I promise to take care of ..."
She cut me off. "The price is firm," she said. She turned to the agent and asked him, "What about you? Do you work?"
Puzzled, he answered that he was a broker with a neighborhood agency.
"I don't know who that is," she said. Then she looked at me and smirked. "You could have just looked in The Village Voice," she said.
Suddenly it all made sense. The guy who had put the ad on Craigslist didn't even know this woman; he had just seen her classified ad in The Voice and relisted it. That's when she and I exchanged glances. "Who did you think was going to pay you?" we both asked the agent.
He had no idea, because his colleague had set him up. Needless to say, the landlord never came down on the price, and the next day I picked up The Village Voice. There was the ad, a tiny three-liner, listing the apartment for $2,995 - $180 less than the ad on Craigslist. Perhaps the agent's plan had been to pretend he was getting the landlord to come down on the rent in exchange for the renter's paying the fee.
But listing the property in the first place was unethical, according to the code of ethics of the Real Estate Board of New York, an industry trade association. The code states that "without the prior knowledge or consent of the owner," no member shall "offer, or cause to be offered, such property for sale or lease."
From then on, I looked in the paper myself.

I don’t call these scavengers. I call them lazy f**ks. I remember one agent who was busted by my former manager because this agent was stupid enough to rip of an ad of one of the top producers in the office. Ms. Bandon should know that the craigslist's NY real estate section is a hotbed of scams and abuse which Craig himself is well aware and has been waging an unending battle against the forces of evil.

The Grunt is not surprised by the brazen nature of these scams considering that, as Ms. Bandon has pointed out, there is a surplus of agents in Manhattan and a dwindling amount of rental inventory in the city which makes things all the more competitive.

The Veteran
West Village, eat-in kitchen and private backyard at that price? Too good to be true. I called the number and spoke to Michael Marino, the sole proprietor of Marino Real Estate in TriBeCa, and found out the place was several blocks south on Hudson - still in the Village, but below my geographic cutoff line. I decided to see it anyway.
The apartment was great. It had a nonworking fireplace, a good-sized bedroom, closets galore, a new bathroom, and it really did have a backyard, complete with flowering roses. And Michael knew just how to handle me. Laid-back, soft-spoken, he didn't push me with the hard sell. He just showed me the place and we chatted for a while. After 22 years in the business, he knew the deal would either happen or it wouldn't.
His ad, it turns out, had appeared only in the paper, not online. Michael said he's old-fashioned and thinks people who are looking for an apartment will check the paper first, so it's not worth paying extra to put the ad online. Once I started reading the classifieds in print, I realized that a lot of Veterans followed this logic, and that I'd been missing quite a few listings by searching only online.

If you do a quick search on ad revenues for print media you will see that they are undergoing a crisis in terms of circulation and that ad sales are down. Print is on its way out while online advertising is become more popular and it is in the best interests of brokers to advertise online. I do not advise ignoring online ads, since brokers not only prefer advertising only because of the hits they get but also ads shelf life is a lot longer on the web.

I would also like to point out that Ms. Bandon made a compromise in her preference for location. We all compromise one way or another when we are looking for a place to live. Many a time when a client would be obsessed with one area then after taking them to every apartment I could find in the area they would change their mind and go to a completely different area.

Mary A. Vetri, a senior vice president at William B. May on Hudson Street, is herself a 17-year veteran. "Rentals are my bread and butter," she says. To her, even the smallest studio rental could add a client to the Rolodex who someday will bring back a multimillion-dollar sale. For that reason, the Veteran rarely lies or even goes for the hard sell, because he or she wants to establish a lasting relationship.
Case in point: when I asked Michael if the apartment was in a town house, he said: "Oh, I don't know. Maybe it could have been a town house at one point." Turned out it was, built in 1842. But Michael was probably the only broker I dealt with who didn't jump at the chance to tell me that.

I would not call these veteran brokers but professionals. I have met many new brokers who also exhibit these traits of making an effort to establish relationships with clients in order to create a harvest of buyers in the future. It is common sense.

Michael probably did not jump to tell Ms. Bandon the full details of the apartment because he knows his market is the most sought after and overpriced area in Manhattan therefore he is not going to get on his hands and knees giving every detail about the apartment. Michael knows that there are ten other people behind her who will and it is just a matter of time when he collects his fee.

The Genuinely Nice Person
Though I knew I was interested in the Hudson Street apartment, I actually put Michael off for as long as I could while I made sure there wasn't anything better in my immediate neighborhood. In a last-minute surge of phone calls to real estate companies, I came across a true broker rarity: the Genuinely Nice Person.

Tim Taylor works for Citi Habitats, which doesn't always have the best reputation among apartment hunters. But Tim was attentive the first moment I called him. I took a chance and was honest, letting him know that I had an apartment lined up but wanted to keep searching for another week.

This is not a Genuinely Nice Person. What we have here is a Genuinely Desperate Person.

First of all Tim should have immediately hung up the phone and saw that Alexandra was a lost cause. In his desperation to close a deal he thought he could win her over by finding the perfect apartment for Alexandra but all he was doing for Alexandra was confirming that she had made the right choice with Michael.

Telling Tim I had a place already was a risk - he could have just stopped calling. But the Genuinely Nice Person doesn't work that way. Tim told me about every listing he found that I might have liked, even going so far as to break a broker's taboo and give me building addresses so I could save us both time with a preliminary walk-by.

Tim probably had no clients and his manager was probably screaming at him every day to make a deal to make up for the desk space he was taking up. Clutching at straws, he probably saw Alexandra as a chance to get back into the game, which is why he made these futile efforts to assist her

I hope for Tim’s sake that he did not give addresses out to Alexandra because by doing that he broke one of the Ten Commandments of Citi-habitats, which is

Thou shalt not show or give addresses out to a client until after they have signed a fee form agreement and after they have shown them that apartment.

I predict that when Tim comes into work this weekend he is going to have a long and loud chat with his manager.

To be honest, I don't know how they make any money. The Genuinely Nice Person seems to spend an inordinate amount of time searching listings on behalf of clients who may or may not ever pay him. Tim and I met only once, at a really nice two-bedroom on 12th Street, but he spent a good week working on my behalf, including over a holiday weekend. When I rejected the apartment because it required too much money up front, he just said: "I'm so sorry. I didn't know. They should have put the two-months' security in their listing. I'm really very sorry about that."
A broker apologizing? Unheard of. What a nice guy.

After this article Tim probably won’t be making any money at all, at least not with Citi-habitats. Many agents have been in the position of Tim including the Grunt. No. I never released addresses to clients over the phone. Remember that there is a difference between being desperate and stupid. But I have been desperate for clients and attempted to woo them every way possible only to have them abuse me and break my heart. Tim definitely has the makings of a great agent with his work ethic and focus but he needs to be better at qualifying his clients, have the confidence to cut them loose if they are not willing to be loyal to him and not release information to clients. But it is very difficult to stand strong when everyone around you seems to be closing deals left and right while you are barely able to make a cold call.

Hopefully after his manager rips him a new one, the manager will give Tim a second chance to redeem himself.

In the end, I signed the lease on the Hudson Street apartment and Michael and I negotiated the fee: more than a month's rent, but less than 15 percent. I think I got a pretty good deal.

She has no idea how good of a deal she has. They usually charge 15% in that area. Count your blessings Alexandra.