Luxury Real Estate

Courtesy of Frederick Peters, President of Warburg Realty

My daughter returned home from a year long stint working in orphanages in Thailand and Vietnam on September 10, 2001. My wife was in Berkeley helping my brother get his kids organized for school while my sister in law was in the hospital. On the morning of the 11th I went to work, and agents began coming into my office urging me to turn on the radio as something unimaginable was going on. I did, and then we moved to the video screen in our conference room, tuned to CNBC. It seemed we had entered an alternate reality. My daughter called, totally disoriented, and said, “You have to come home.” I complied. I will never forget walking out of the office and onto Madison Avenue. There was not a single car in sight as I gazed downtown, but on the horizon smoke was billowing up toward the sky. New York, America, and the world were changed forever.

In the subsequent weeks, as all real estate activity ground to a halt and buyers, one after another, began to default on their contracts, I and all my colleagues had to contemplate our business going forward. What did it mean? What values underpinned it? The answer which emerged for me, and for Warburg, was surprisingly simple: we love New York.

Seeing our city wounded, and so many loved ones, including the son of one of our agents, lost, reinforced that love like nothing else. We were filled with admiration for the bravery of our police and firefighters. We mourned with all those who lost family and friends. We admired the way our arts organizations rose to the occasion with concerts and theater pieces celebrating and memorializing our city, its gifts and its losses. And we were filled with admiration for the indomitable quality of our neighbors, whose commitment to the city remained as strong or stronger than ever, who were not filled with despair, who rebuilt and rededicated themselves to a better world, with New York still at its vital center.

Over and over during those tragic and difficult first weeks I said to our agents “Forget about selling property for the time being. Our job in this crisis is to be the Chamber of Commerce for New York. Sell your love of the city – its glamour, its neighborliness, its cultural richness, its beauty (which seemed particularly poignant in the presence of the absence of the towers). “

Today, even in this time of economic uncertainty, that message remains compelling. The city is more beautiful and brilliant, more filled with food and fun, with art and architecture, with music and mystery, than it has ever been. And for me the message with which I walked away from that terrible day still resonates: in its diversity and cultural differences, in its striving, in its recovery, our city represents the best hope for a more tolerant, more peaceful world going forward. We live together here in raucous harmony. Why? Because we love New York.

Courtesy of Frederick Peters, President of Warburg Realty

The summer rentals are ending, the vacations are winding down, and all over New York City real estate agents are preparing for the fall season. After the economic uncertainty of the summer, it seems likely that both buyers and sellers will be second guessing their own decisions as the season progresses. So let’s try to answer some of the most basic questions here and now:

Why buy?

Although most New Yorkers rent, the answer to the question “why buy?” is a fundamental one which weaves it way through American life. In no other country is the concept of home ownership so enshrined. We give tax breaks for mortgages, tax breaks for real estate taxes, all because we as a nation believe so profoundly in the concept of home ownership. Kids grow up believing that owning a home is an indication of success, proof that you have made it. Home ownership has burrowed deep into the American mind set; it embodies both security and success. Renting is easy, it can be cheaper, but it doesn’t provide the same level of satisfaction or sense of arrival.

Why buy now?

This is a question agents can never answer. I have learned over the years that the smartest and most successful agents are facilitators, not convincers. The customer always has to answer this question for him or herself. I never try to talk anyone into anything. That said, there are always good reasons to buy now. It means you can begin the process of ordering your life around your new home. But…If you find what you want, then the time to act is now. Many buyers I have dealt with over the years have let go of a property they really liked because they were sure the market was too high, or a better one would come along, or that they could somehow second guess the trajectory of the marketplace. No one ever knows what will happen next, and more often than not they end up sorry. When you and your life are ready, be ready to act. The rest is all, ultimately, irrelevant.

What should I buy?

It always makes sense to reach just a little bit. Not to seriously overextend yourself; that is NEVER a good idea. But to try to buy the best space in the best location you possibly can. When my wife and I did that, we lived for a year with a 50 year old kitchen and over 20 years with original bathrooms. It took us a while to afford the renovations, but every day we enjoyed the wonderful location and spacious rooms of our apartment. Maybe it takes a few years to get new furniture. Maybe it takes a few years to tear down those walls or re-imagine that dining room as a family room. But as long as you got yourself good bones in a good spot, everything else will fall into place.

Courtesy of Carolyn Bowen-Keating of Hall & Hunter Realtors

Living in the Detroit Metropolitan area we know this is a great place to live, raise a family and work. We are also ambassadors to help people enjoy their experience in Detroit, because if they enjoy their time here maybe they’ll come back another time or decide to live and work here. Or maybe they’ll simply say something nice about Detroit next time it comes up in conversation. Each of those scenarios is good for Detroit and the region.

Downtown Detroit is making a comeback so the Relocation Department of Hall & Hunter Realtors arranged for a three hour field trip to tour Detroit and see the revitalization first hand. We picked a beautiful afternoon to take a tour narrated by Jeanette Pierce, the founder of Inside Detroit. Pierce’s goal was to show the many interesting and beautiful sites of Detroit from an insider’s prospective. Pierce shared the political history of the city and its buildings including the Guardian Building with its beautiful woodwork and tile map of Michigan outlining the history of our great state through illustrations of the agriculture and manufacturing.

The national perception of Detroit was once filled with fear for a person’s safety but when we were at Campus Martius there where hundreds of people enjoying their lunch and reading a book in the sunshine of the park. This midtown area is rich with new buildings and park benches for summertime enjoyment as well as the Motown Winter Blast in January. There are statues that tell the history of the politicians and sports figures that made Detroit the highlight of the nation.

Later we enjoyed Tyree Guyton’s Heidelberg Project, which looks very different in person and has much more meaning when you see it through the eyes of Jeanette Pierce. Guyton’s project started as a way to take trash on vacant lots and turn it into art…to some this would be an “in your face” type of art but to see it in person gave me a new appreciation for this new beauty.

Formerly a Grand Trunk Railroad line, the Dequindre Cut is a below-street level path that runs parallel to St. Aubin Street, providing a greenway featuring a 20-foot-wide paved pathway, which includes separate lanes for pedestrian and bicycle traffic. You can follow the Dequindre Cut to the Eastern Market before strolling along the five mile long Riverwalk. There’s so much to see and do once you hop in your car and make your way to Downtown Detroit.

We must remember that we are all Detroit ambassadors. It is not a choice; it is a fact. We all are Detroit ambassadors because we all represent our region, and we all want it to succeed. So find something that you get excited about and be ready to share it with someone next time you’re on a plane or get stopped for directions or asked for a restaurant recommendation. We have plenty of things to be excited about, and we’d love to share them with you.

Courtesy of Frederick Peters, President of Warburg Realty 

Here in Sharon, Connecticut where I rode out the hurricane with three generations of my family, the sky cleared around 1 AM last night , and the storm gave way to an extraordinarily clear starry night. That morphed this morning into the most perfect day possible. This house, which my wife and I renovated painstakingly over a period of almost two years, has become a wonderful gathering place for family and friends at holiday time, in moments of crisis (my niece, her husband, and their baby son came here three days ago from Brooklyn once they heard all the subways were shutting down and there was no food or bottled water left in the stores!), and for re-establishing a sense of connection with people I love and with the world at large. As I cooked for everyone (I love to feed a crowd), I thought about the meaning of creating a home.

Both our apartment in New York and our house in Connecticut have been centers for family activity. It takes a while to make a dwelling place into a home, and for me, owning rather than renting has given me the sense of permanence, of belonging, which has made that transition possible. True, many people rent long term and feel similarly about their homes, but for me owning is an integral part of the home building experience. I would believe in it with or without the mortgage tax deduction, and regardless of whether my home always seemed like a “good investment.”

The question is, investment in what? I have written before in the blogs about my belief that New Yorkers focus too much on the notion of their home as an investment. When I bought the house in Connecticut, at the top of the market back in 2005, I knew I was paying on the high side. And that was before the renovation! Recently, for a refinance, it was appraised for about 2/3 of what I have in it. But so what? Stocks are down too, and I have no plan to sell this in my lifetime because it makes us all happy. What is the value of that?

So, New Yorkers, remember that money is not the value which counts the most. The home in which you can raise a family or entertain friends or give great parties will fill up with memories and associations which enrich your life and fill you with a sense of well being about your history and experiences. Price per square foot is important, but it doesn’t hold a candle to the importance of creating the right backdrop against which your life can unfold.

Courtesy of Frederick Peters, President of Warburg Realty

It has taken me thirty years in the real estate business to figure out what real estate marketing is actually for. And over the years the notion of marketing has continued to evolve, so just when I thought I had caught it, it squirmed away. But here is what I think today, with a little historical perspective thrown in.

When I started in real estate in the early 80s, it was ALL about the New York Times classified section. There were no giant firms then, and we all vied to see who had the largest number of columns of classifieds in the Sunday Times. Depending on how well you did, you got one, two, three or more ads per week. And since there were only open listings in those days, no exclusives, you had to go hunt down the properties you were going to advertise. And then see that other people had hunted them down too: you could always tell when someone else had an ad for the same apartment as you. Sometimes, with a newer listing, three or four people had it in. We knew that because every Monday the entire office sat with the Classified section to figure out what properties we DIDN’T have, so we could go get them. But it didn’t really matter because, despite what the seller thought, the point of that ad was NOT to sell that apartment. The point was to get people to call you.

During the 90s we became an exclusive marketplace. Gradually, open listings went the way of the dinosaur and with them the idea of columns in the Times began to seem less important. The Time Magazine gained in favor. Glossies containing only social gossip and real estate ads came and went, each claiming to be indispensable before disappearing forever. And I became increasingly disenchanted with print advertising. It was all, to quote the wonderful Evelin Corsey who ran Albert Ashforth for so many years, a “sea of sameness.” How could I, who ran a smaller company, hope to distinguish Warburg or stand out in venue after venue in which all my competitors appeared as well? I realized that I needed to start thinking like a marketer, not an advertiser. Advertising properties was a means to a series of ends. For the seller, it meant their property received exposure. For the agent, it meant access to buyers. But for me, it meant building the brand!

Then, as with so many things, the Internet transformed the world. We had to spend a fortune building a website, but then all of our properties appeared on it, 24/7, for minimal ongoing cost. Posting on nytimes.com was less then half the price of a classified ad. So 6 years ago I made a commitment to myself to get out of the classifieds altogether. I had always hated them, and they seemed increasingly like a big waste of money. I wanted to spend that money on search engine optimization to drive as many people as possible to our website. (Some things, of course haven’t changed. Agents are more inclined than ever to write ads which are too long and give too much detail. They forget that selling the property on line is not the point: the goal of advertising is to MAKE BUYERS CONTACT YOU!) And we focused in earnest on branding activities. Instead of classifieds, we took a monthly full page in the Times. It boosted our web traffic 25% on the day it appeared and made a big statement about Warburg. We found print venues (Playbill, New York Magazine) which were uncluttered with other real estate ads. And when our competitors discovered them, we moved on. And more of our marketing dollars and time went to, and go to, PR. I and many of my agents are quoted often in the media. Warburg has its gig on “Selling New York”, which is watched by more people than I could ever even imagine. And, as you know all too well if you are reading this right now, I blog every week. In 2011, 100,000 people per month have entered our website through the blog.

One of my competitors was recently quoted saying that no one will buy a $10 million apartment because they saw it on TV. I agree. And this blog doesn’t sell property either. That is not the point. The point is marketing, not advertising. As we engage in more unique activities, the brand gets more widely known. It becomes more top of mind. As it becomes more top of mind, more people associate to it when they are considering their own, or a friend’s, real estate needs. And then they e-mail us. And THAT is the point!

Courtesy of Frederick Peters, President of Warburg Realty

This is my 105^th blog. I had no idea I had written so many. I started writing the blogs because I wanted to create points of entry for lay people and colleagues alike into what real estate agents do, how we think, and how consumers can more effectively advocate for themselves within the broker/client relationship. I wanted to demonstrate some of the complexity inherent in our jobs as well as the multiple pleasures. Our business involves strategizing, it involves relationship management, it involves aesthetics, it involves negotiating skill, and it often involves being a strong hand within the softest velvet glove. There is no other work quite like it.

So who are the people who succeed at this work? Recently Warburg’s management team has tried to standardize the way our three Sales Directors interview broker candidates. Certain things are givens – we need a resume, we need a list of sales broken down by year for anyone with a history in the business, and we require a DISC test, which is a remarkably accurate 7 minute online personality assessment. We have found over the years that a certain type tends to do well in brokerage: good people skills and enough backbone to be a closer. The timid, or those excessively interested in people pleasing, rarely close deals.

As the group discussed what we are looking for in candidates, a number of things became clear to us. Like every business, we want people who are at ease with technology. The world of the broker revolves around computers, the more sophisticated the better. Good math skills are important; not only the ability to quickly calculate 5% or 6% in your head, but also the ability to understand complex financial statements and organize them clearly for Board review. A great Rolodex helps, but it provides no guarantee that its possessor knows what to do with it. It needs to be accompanied by a tight business plan. And we try to never hire anyone who says they want to become an agent because they “like people” or “like architecture!” That’s fine, but it simply isn’t enough.

As I have noted before in these blogs, the changes in the information superhighway have transformed our business. As we have moved out of the information business and into the expertise business our core competencies have had to evolve. Negotiating is more fast paced and much of the background information is now transmitted by e-mail. But it is a foolish agent who conducts negotiations on the computer. They require the nuanced understanding only voice to voice communication can provide. In fact one of today’s core skills is knowing when NOT to use technology! A good broker does much more research than he or she did 15 years ago – on the market comps, closed sales, prices per square foot, scalability of pricing by floor, by view, by condition. But interpreting the mass of data available to both us and our clients is more important and complex than ever before. Hence the expertise!

So this is why I blog: I want to underline the professionalism which agents acquire but for which they are rarely recognized and the skills which the work demands. I want consumers to be aware of what we do and of what they need to do to make sure their real estate transactions run as smoothly as I can. I want to provide real time information about the market and how it reflects and counters economic trends. And I hope those with the skills described above will consider a career in the residential sales business. It’s rewarding, it’s endlessly interesting and various, and it’s fun. True, it eats your life, but I suspect almost every engaging job does that. Warburg and the other top firms employ ex-bankers, lawyers, teachers, performers, actors, and, increasingly, ambitious young men and women just out of college who see residential as their lifetime career. Do YOU love what YOU do?

Courtesy of Ron & Alexandra Seigel, Language of Luxury Community Founders, Managing Partners of Napa Consultants, International

For those of you who wish to escape the intensity of the city and enjoy a quieter, more relaxed, simpler life with a graceful pace reminiscent of the 1950’s, the magnificent Santa Ynez Valley, in California’s Santa Barbara Wine Country, is the place for you. We asked some of the top luxury real estate marketing professionals in the area to tell us what they loved about their marketplace. Learn More Here!

Courtesy of Frederick Peters, President of Warburg Realty

The New York City press loves to write about our lack of an MLS. In article after article, the reader can learn that there is no formal mechanism for sharing listings in the Manhattan market, and that agents and agencies are motivated by greed in NOT sharing listings so they can keep the entire commission themselves. Nothing could be further from the truth!

What IS true is that our community came late to the idea of sharing information. Long after MLS had become the norm in other urban and suburban communities, we were still like 14th century France, a collection of warring fiefdoms. Until REBNY (The Real Estate Board of New York) organized its Residential Division in the late 1980s, we didn’t talk to each other, much less work together. Gradually over the following decade that changed, and co-brokerage between firms became more the norm. It was not until the new millennium however, that this work became codified and co-brokerage between REBNY members became not only usual, but necessary.

For many years after we began working together, we could choose the firms with whom we wanted to share our listings, and when we wanted to share them. Typically, many of us larger firms shared more reliably with each other than with many of the smaller firms, and it is true that if we thought we could sell a listing in-house we were less inclined to share it. That was particularly true in the late 80s and 90s, when our principal form of listing communication was the fax. The rise of the Internet brought us all into the 21st century. It did not make real estate agents obsolete, as many had predicted, but it did facilitate our ability to communicate.

Of course, nothing is easy. Our warring fiefdoms could not agree on how to work together, or with whom, or under what circumstances. So we missed the opportunity to design a listing system with a public platform, the hallmark of MLS systems all over the country. We were so fearful of losing control that we LOST control, first to the New York Times, which became the go-to venue for on line listings, and more recently to StreetEasy, which buyers and sellers now depend on for real time information. But even though we did not (until recently) have a strong public portal for showing our listings to the public in a compelling, user friendly way, we did manage to automate and create rules for the sharing of listings with one another. Our data exchange system is called the RLS (REBNY Listing Service).

Today, thanks to the RLS, the vast majority of our deals are co-brokered, with one agent representing the buyer and another the seller. For all practical purposes, the RLS functions much like an MLS. All member firms (and in Manhattan almost ALL firms are members) are required to input their listings and share them throughout the system within 24 hours. So a customer working with ANY RLS member has immediate access to every listing in the database, from firms large and small, from Washington Heights to Battery Park. This is clearly much better for the buyer, who can select one agent with whom he or she feels comfortable and not be apprehensive lest the chosen agent not have access to some secret cache of listings. It is also much better for the seller, who can choose an exclusive agent and be confident that within 24 hours pretty much every agent in the city will know about the property.

In recent months, the RLS has also acquired a new public face. REBNY has partnered with NY 1 to create www.ny1residential.com, a public portal with the most up to date information on the listings of most of the major firms. While not everyone is participating yet (yes, our community still can resemble a herd of unruly cats), this site, with completely up-to-date listing information flowing directly from our listing systems, should become the consumer’s best source of local real estate information. So while it may be true, strictly speaking, that Manhattan doesn’t have an MLS, that brings no disadvantage to today’s real estate consumer. The firms all share listings promptly and completely, and as ny1residential.com continues to develop, it will become that Grail so many agents AND consumers have hoped for, a complete, reliable, error free venue for current listing information in our fast-paced market.

Courtesy of Frederick Peters, President of Warburg Realty

I grew up on the Upper East Side. There was no mistaking it. It was a village, as I have written about before. My village was bounded on the south by Grand Central Station on 42 Street, on the north by 96th Street, on the east by Third Avenue, and on the west by Central Park. And when I entered the real estate brokerage business in 1980, those same boundaries still held. My mother had no friends who lived outside our village. When my father moved to Stuyvesant Town, it seemed like a different, unfamiliar city. My grandfather had grown up in Brooklyn, but I certainly had never been there!

The evolution of neighborhoods over the past thirty years has been nothing short of extraordinary, a revolution caused by dropping crime rates, new lifestyle choices, growing populations, and evolving definitions of cool. I will never forget the day, when I was in my teens, that my mother accommodated the kids of English friends by agreeing to go walk around in the Village. My mother? In the Village?! I became aware that those neighborhood boundaries which had defined my early life were stretching. But I could not have imagined the degree to which those boundaries would atomize in the decades to come.

Today everyone lives everywhere. My kids and many of their friends want only to live in Brooklyn; they love its low rise cozy feeling, family–run stores, and relaxed vibe. Tribeca, once so hip, has turned into a neighborhood filled with parents vying to get into Public School 234, which has become so crowded that it needed an offshoot. Tribeca’s proximity to Wall Street and its fabulous restaurants have also made it a Mecca for bankers. The Upper West Side, which I considered arty when I moved here in 1977 (after a truly eye-opening stint on Broadway and 92nd in my first year out of college: Omigod, I discovered, people actually LIVED there!) is no longer a world away from 66th and Park where I grew up. In fact, many of our customers routinely consider CPW and the Museum-facing streets on 77th and 81st Streets as extensions of their Upper East Side apartment searches. A number of our friends now live in the West 100s, and to be artsy today, you need to move to Harlem. Or Bushwick.

In fact, while there is still a lot of music in the Village, and a lot of galleries in SoHo (and Chelsea), there is not much meat in the Meat Packing District and not much crack or heroin in Needle Park. All of Manhattan and much of Brooklyn and Queens are both safe and pretty, and they are essentially one giant neighborhood with regional characteristics. Ladies from the Upper East Side move to Chelsea, hip Tribeca couples move to the Upper West Side to raise their kids (or vice versa), and the kids then move to Long Island City. This is the new New York.

You can read more on www.warburgrealty.com/blog.

Courtesy of Merry Nash of Islandia Real Estate

Many of my customers ask if mortgages are available in the Virgin Islands. I have gathered some information to share on the subject. Home mortgages offered by First Liberty mortgage brokers include a 30 year fixed at around 4.50% and a 15 year fixed at around 3.75%. Generally 20% is the required down payment but for a primary residence the amount down can be as little as 3.5%.

For more information from First Liberty contact Brice McLaughlin at 340 774-1101 or brice@firstlib.com. View blogpost.