Behind the Scenes of New Home Sales

Ever wonder what goes on behind the scenes in a new condo sales office? Probably not, but don’t stop reading just yet you might learn something.

When you enter the office you will probably be greeted by a receptionist. He or she will ask you some basic questions to ascertain your contact info (name, phone number, e-mail address etc.). Be deliberate in what information you provide – sales agents are accountable for each person who walks through the door and they WILL contact you, possibly repeatedly. So if you really hate being called on the phone or you prefer to deal only with email take that into account when answering.

Most pre-construction sales programs will begin the presentation at a building model where they will orient you and try and get you to understand “The Vision.” During this time, and throughout the presentation, a good sales agent will be asking you a lot of questions. He or she is not simply being nosey or friendly he or she is looking to find out what is important to you – do you need to have a killer view? Do you want an open kitchen? Do you need a second bedroom that will fit bunk beds for your twin boys? There will probably be questions about your budget either indirectly – what do you do? Where do you live now? Or more directly – how much are you looking to spend? Does this price fit into your budget? And there will be questions about the home itself - how large of a home you are looking for? When do you need to move in? Be honest and open – the more information you give your agent the better able he or she will be to show you a home that meets your qualifications and budget without wasting your time.

If there is a model home you will see it and then it will be time for the close. Any good sales agent, and particularly any good sales agent in this market, will ask you then and there if you would like to buy. Yes, right now, today, before leaving the office.
It’s not as crazy as you think. Before you panic and fall prey to your knee jerk reaction of shouting out “NO – WE ARE JUST LOOKING” it is important to understand how purchasing a new home in New York (and some other states) often works.

In New York all new developments have an offering plan. This is a legal document that is filed with the Attorney General and protects you, the buyer, from the seller aka. Big bad real estate developers. The plan lays out all legal risks, ramifications, benefits, guarantees and warranties connected with the project as well as infinite details about lots of boring architectural items, engineering reports etc. It also defines the procedure to purchase a home. When you sign a contract you get this plan (there are other scenarios as well but let’s stick with this easy one). So when the sales agent asks you to purchase a home. You take a deep breathe, sign the contract and provide a deposit check and he/she hands you the offering plan. You now have 7 days to review the offering plan with your attorney and the home you signed for will be off the market. During this week you can cancel your contract and get a full refund on your money – no penalties. So what? Not signing a contract and going home to think about it also has no penalties right? Well, maybe. What if someone comes along and buys your dream home right out from under you? You saw it, you loved it and yet someone else comes in the next day and buys it. It’s no longer your dream home; it’s their dream home now. I know what you are thinking – that doesn’t happen in this market. But it does. I promise.

So there you have it – your very own sneak peak into the world of new home sales. Being educated and prepared will only help you make better decisions. Exciting stuff this new home sales is isn’t it?

10 Worst Marketing Ideas So Far

With a slower sales pace then 2003-2005 (duh!) and a client base that is tired of hearing that people are not buying because of the recession (I can’t say that I blame them) coming up with innovative ways to drive traffic and sales has become a more frantic part of my job. It’s a task that I cannot claim to be very good nor very bad at carrying out. Some ideas work, some ideas don’t. In the spirit of self deprecation and not taking life or myself too seriously I would like to share with you my 10 worst marketing ideas so far. Some ideas were dismissed (and rightly so) in meetings, while others never even made it out of the recesses of my brain for fear of the mockery they would surely elicit.

10. Have both developers at Palmer Hill (http://www.palmerhillhomes.com/) jump into the newly completed pool in mid-December for a photo op that could be pitched to the press as “Palmer Hills’ Polar Bear Club.”

9. Start a matchmaker service for new residents. It could be marketed as an amenity -kind of like the “Millionaire Matchmaker” only it would be more like “Andrea chooses who you date out of a pool of people who were also smart enough to buy a new home, but are probably not millionaires.”

8. Provide NYC Marathon runners with t-shirts branded with the name and website of a specific condo building. If they finish in the top ten (yes of the whole marathon pool) they win a free condo.

7. Name the Penthouse portion of the condo tower Aria (http://www.ariathecondominium.com/) Aira (yup Aria backwards) so it would appear to be 2 different buildings and make the PH homes exclusive and differentiated. It’s a bad idea, what can I say?

6. Arrange for the next 10 purchasers at Trump Plaza Jersey City (http://www.njtrump.net/) to have a guest appearance on The Apprentice.

5. Hire rickshaws to poach clients from the competition’s sales office and deliver them right to the door of my sales office (not my idea- but morally questionable and deviously clever).

4. Give away a free apartment for the PR buzz to any of the following: Lindsay Lohan, Nick Lachey, Paris Hilton, Brett Michaels, or one or more of the Olsen twins.

3. Film a season of “Deadliest Catch” right here in Manhattan. Atelier (http://www.ateliercondos.com/) could be the equivalent of “Dutch Harbor” and it goes without saying that anything caught in the Hudson is potentially deadly. It’s going to be an exciting season premiere as The Cornelia Marie dodges crashing airplanes and rush hour traffic.

2. Provide free bonus cashing advances for all top AIG employees when bonuses are used as a down-payment for homes.* *No refunds, even for ethical reasons will be permitted.

1. Give away condoms with “Everything’s bigger in Riverdale – Size Matters” printed on them. I was kind of kidding about this, but everything IS bigger in Riverdale – giant kitchens, huge closets, bedrooms that fit king sized beds etc. (http://www.solariariverdale.com/).

Surprised my Buy One Get One Free concept isn’t on the list? I am standing behind that one. It’s a damn good idea.

Nothing Sugary About It

Home Sweet Home at Palmer Hill.

Accusations of brokers “sugar coating” the state of the market have been swirling through the Real Estate industry. Blame a rumored incident where two Manhattan brokerage firms allegedly advised their agents to keep mum about the market and to boycott The Real Deal for the mudslinging. You can learn the whole story at the famed blog Urban Diggs and while you are there feel free to support writer Noah Rosenblatt’s quest to “keep it real without bias” and “fight for transparency” http://www.urbandigs.com/2009/04/the_real_deal_tossed_for_not_s.html#comments. Whether or not the incident happened, or if it even matters at all, what’s worth discussing is that The Real Deal and Noah are correct – there is no excuse for sugarcoating the market or the trickery this implies.

Over the past few weeks I have spent a lot of time talking about why now is the time to buy – and I am not going to stop now. But, I do want to clarify. I personally believe that now is the time to buy for end users - people who are actually going to live in the home that they purchase - not flip, not rent out, live in their investment. But before we get to why to buy now, first let’s discuss buying in general and why despite the state of the market buying can still make sense for you. Think about your home this way – you are always going to be out of pocket for housing costs. Why not make those payments on something that gives you the potential to gain equity and could increase in value? It’s almost a no-brainer because you have to pay to live somewhere. Now that we are in agreement that buying is the way to go think about these three reasons why our current crappy, scary, slumping market is going to help you (maybe not the developers or the economic recovery – but you personally).

1. Falling prices are good news. Remember when real estate was hot? Everyone was buying and prices kept rising and rising until you couldn’t afford to live anywhere but your parent’s basement. Things are different now. The Wall Street Journal reported an alcove studio on the Upper East Side priced at $199,000 (http://online.wsj.com/article/SB123864151725581585.html) – when was the last time you could buy in Manhattan for $199,000?


2. Standing inventory is good news. Developers no longer have strict availabilities and restrict inventory release. You will not be told “no, you can’t have the home with the terrace – it hasn’t been released and when it is we don’t know what price it will be at - so please buy this smaller home with the partially blocked views.” Developers no longer have the luxury of holding on to the best homes to sell when prices are at their highest. This is your opportunity to pick the home that fits you best, with the best views, and the nicest closets, and that is just what you wanted at the price that you wanted (see point 1).


3. Interest Rate Cuts Are Good News. Interest rates were low before the recession and now they are headed even lower. Although the guidelines to qualify for loans are changing, well qualified buyers can still get loans and they can get them at amazing rates.
   

If these three reasons were not enough to get you thinking I would like to leave you with a question posed by our Regional Sales Manager – “Why is it that in a sellers market everyone buys but in a buyer’s market nobody buys? Tricky.

The Quest for a Recession Proof Home

I was watching television the other day and I saw this commercial from the National Association of Realtors. In the ad the perfect family finds their dream home and a friendly realtor reminds viewers that now is the time to buy.

The ad is right, now is the time to buy – but we have been over that before. If you are motivated and savvy and thinking about buying a home in this market you must also being wondering what you should look for in your new home. Is there such thing as a recession proof home? No, there’s not – but there are some things to look for that will help you choose a home that will weather bad economies better and hopefully retain more value. Honestly, it’s back to the basics. Here are three rules of thumb to think about on your search.

1. Location, Location, Location. You’ve heard it before but it’s worth repeating – three times in fact. As the market has stumbled we are seeing more and more that location means everything. Where once moving into a gentrifying (read cheaper) neighborhood was exciting and cool, it is now often synonymous for standing inventory and decreasing home values. Remember that Starbucks that was moving in? It’s not moving into the neighborhood any faster then you are. So consider this, if you are moving into an urban area look for an established neighborhood that’s convenient to public transportation. Consider a building like Avonova (http://www.avonova.com/). Its’ venerable Upper West side neighborhood has long proven itself as a beacon to families, old time Manhattanites, and Yoko Ono. But perhaps most importantly, you can rest assured that there will always be a Starbucks right around the corner.

2. Time Tested Product Types. When the market falters people stick with what they understand. In an urban market that is most likely a high rise tower or an apartment of some kind. In the suburbs, albeit everyone is different, but high rise condos are not part of the suburban dream for most people. Over the past 5 years we have seen an influx of condo towers move into Westchester County and Connecticut. Beautiful places to live, but potentially not as easy to resell as a single family home or a townhome, especially when the market is down. Did I mention that I represent some beautiful townhomes in Stamford (http://www.palmerhillhomes.com/)? But in all seriousness, time tested is the way to go - at least for now. Just an aside, you can be less concerned about interior finishes. Your super modern kitchen is not going to keep someone from buying your home as they can always renovate. Changing a high-rise apartment into a single family home or townhome on the other hand is impossible.

3. Don’t buy the most expensive home on the block (or in the building). You’ve undoubtedly heard this one before too, but again that’s because it’s true. Historically, you do not get the same return on investment for the largest most expensive home on the block as you do for a smaller start up home. So look around before you buy and make sure your home is not overbuilt for the area.

Nicole Weidaur of Keller Williams Greater Seattle has compiled a good list of things to think about when looking for a home as well. Everything from “research the neighborhood” (we are totally in agreement on that one), to “look at several houses before you buy,” and “buy based on needs not wants.” It’s a great list and worth checking out. http://nweidauer.activerain.com/post/1005381/8-Home-Buying-Dos-Donts

Helping People Become Homeowners Since 1934

It seems like everyone in Real Estate is talking about FHA loans these days. Just this week it was the headline on inman.com “The facts on FHA-insured loans" http://www.inman.com/buyers-sellers/columnists/jackguttentag/the-facts-fha-insured-loans and it was a major topic of discussion at the NAHB convention. Interestingly, it has not been widely written about in either the New York Times or The Wall Street Journal, maybe because FHA loans are not anything new and aren’t going to save the real estate market.

As Jeff Belonger, FHA expert said “I am tired of listening to loan officers, realtors, and the average consumer get all excited because FHA mortgages are back. People, they never left. FHA loans are not the new subprime mortgages” http://activerain.com/blogsview/503019/FHA-loans-FHA-rates-Why-so-different-from-conventional-loans. That being said, Jeff goes on to say, and I agree, FHA loans in many cases are better then conventional loans and CAN HELP people buy homes.

This is the deal, straight from The US Department of Housing and Urban Development’s mouth (http://www.hud.gov/buying/loans.cfm) “FHA loans have been helping people become homeowners since 1934. How do we do it? The Federal Housing Administration (FHA) – which is part of HUD – insures the loan, so your lender can offer you a better deal.”

Specifically what they mean is that FHA loans allow you to do the following:

• Provide a lower down payment. Typically 10-20% of the purchase price is required as a down payment on your home. With an FHA loan you can put down as little as 3.5%.
• Qualify with lower credit scores. Because FHA is insuring your mortgage you may be eligible to qualify for a loan even if you have had some credit problems in your past. In fact, a lower cumulative credit score can qualify for FHA loan then typically required from other home loans.
• Down payments can be gifted. Don’t have enough for a down payment but have a rich uncle? He can gift you the money with no penalties.

Excited yet? FHA loans are the real deal and can help put homeownership in your reach. There is one catch however, if you are looking at multi-family housing (i.e. one of the many beautiful new condo buildings on the market) – the building must be pre-approved by HUD. Luckily for you, we would like to announce that Adam’s Square, Hoboken’s hottest new address has just been granted HUD approval!!! That’s right, you can purchase an outstanding one, two, or three bedroom home in this venerable building that expertly blends historic grandeur, modern amenities, and the convenience of an urban lifestyle with your shiny new FHA loan. http://www.adamssquare.com/