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The New Normal: What if only 3 obstacles stood in the way of the fully digital transaction?

“The New Normal” is a multistory Inman series exploring what’s returning to normal after the pandemic fades and what will never be the same. 

The quest to deliver a seamless end-to-end digital transaction has been decades in the making, with brokerages and tech companies battling to release the next game-changing platform. However, many real estate professionals had been resistant to change until the pandemic altered the rules of engagement.

Social distancing restrictions pushed agents, brokers, consumers and everyone in between to lean into the plethora of tech tools at their disposal like never before. State regulators lifted restrictions on e-signatures, e-notarizations and e-closings, and gave buyers and sellers a taste of what a fully paperless transaction could be.

As the world slowly reopens, the industry is facing a crucial choice: go back to traditional ways of doing business or blast full speed into the future, with its opportunities and challenges.

Roadblock 1: Lack of continuity among regulators

“COVID brought the industry, especially in New York City, up to the modern times,” The Bizzarro Agency broker-owner Matthew Bizzarro told Inman. “New York, even as one of the most sophisticated cities in the world, has one of the most archaic approval processes, especially when you’re purchasing co-ops.”

“The pandemic moved a lot of this old thinking into modern times. Nobody wants to copy 1,400 pages to bring to a management company or co-op board,” he said. “The silver lining in the pandemic is that it moved the transaction process in the city forward. A lot of major companies now allow secure PDF submissions.”

However, as New York City nears its July 1 reopening, Bizzarro said he’s noticing a frustrating trend.

“I thought we’d moved on [from hardcopies],” he explained. “Lately, as we’ve submitted secure PDF purchase applications [some management companies] are now coming back and saying they require a hardcopy. It’s been done the old way for so long. I don’t think a lot of people know how to pivot.”

RE/MAX Legacy broker-owner Jody Black said he’s facing a similar roadblock in his attempt to provide a totally digital transaction process for his team’s buyers and sellers in Oxford, Mississippi. Black said he’s been successful in digitizing every part of the homebuying and homeselling process, except for e-closings due to state regulations.

“Our attorneys handle our closings here, and what we’re seeing, for the most part, is the attorneys are still sending things to clients and having them overnight them back,” he said. “So we’re not really seeing e-signatures and e-notarizations on the closing side yet but, I think that’s something that’s absolutely crucial for agents and consumers.”

Fathom Realty Chief Brand Officer Wendy Forsythe said the lack of continuity between state regulators and financial institutions’ approach to e-signatures and e-notarization has been a pain point for Fathom, which offers virtual, cloud-based brokerage services in 29 states and mortgage and title services nationwide.

“In some cases, financial institutions just don’t accept digital signatures. They want to still have wet signatures on the documents,” she said. “So all the other steps in the transaction might be fully remote and fully paperless, but if the bank that you’re getting your mortgage from requires a pen-on-paper signature, that’s it.”

“That’s going to need to change before we could ever have 100 percent, fully-digital paperless transactions,” she added.

According to Notarize, only 34 states have permanent remote online notarization (RON) laws. However, agents and lenders still must follow regulations set by their county’s records office, which may or may not accept eRecordings.

“Unfortunately, each state kind of works in their own little silo,” Realogy Title Group CEO Don Casey explained. “As an example, the majority of the states do allow for RON closings, but here’s the difference: Pennsylvania will only allow e-notarization, but it has to be a licensed notary in Pennsylvania, whereas other states allow for out-of-state notaries.”

“When you look at some centralized notaries like Notarize, their notaries are physically licensed in Virginia and Texas,” he added. “So it’s hard to have consistency and I don’t know that that’ll ever be resolved.”

With that in mind, Casey said the issue is less about goading states and counties into adopting uniform policies and more about helping agents and consumers develop the knowledge base and flexibility needed to have a better transaction experience.

“The tough part is also with the agents,” he explained. “We spend a crazy amount of time training agents, educating them and explaining to them the advantages of [e-notarizations and e-closings].”

“You also have a subset of consumers as well as agents that want ink-signed documents and not do this electronic process,” he added.

Roadblock 2: Differing consumer wants and needs

Bizzarro, Black and Forsythe said their agents embraced the digital transaction process well before the pandemic, which made it easier to make pandemic-induced pivots, including Zoom listing presentations, virtual home open houses, FaceTime walkthroughs, Google Hangout training sessions and drive-thru closings.

“We were very fortunate because we had been using video software for training and communication between ourselves and our agents,” Forsythe said. “They were pretty familiar with being on camera with Zoom meetings and they transitioned pretty quickly to doing that with their clients. ”

“We had many of them tell us like, well, I don’t know why I didn’t do this with my clients before,” she added. “So that was a very interesting kind of a-ha moment.”

Forsythe said consumers come to Fathom for the virtual, cloud-based experience, so they rarely had issues with consumers adapting to an increasingly digital transaction process. However, Bizzarro and Black, who both operate brick-and-mortar offices, have experienced some pushback from consumers who don’t trust the world of electronic signatures and documentation.

“We do run into the occasional folks, who are usually older, that sort of fear technology and they don’t want to have to learn anything new,” Black said. “And the systems and the software that we use doesn’t necessarily require them to learn too much — we just try to explain to them the process.”

“We set up everything for you and all you have to do is touch your phone twice [to complete a task] and it is done,” he added. “Once they realize that it’s not more work for them, usually they can get on board with it.”

Bizzarro said he occasionally has older clients who are skeptical about the safety of a digital transaction. “These personal applications do have a lot of information, but you could argue a PDF or hardcopy could either get hacked or loss,” he said. “So the transition to digital documentation was a little different for some of our older clients clientele, but I found they switched over pretty quick.”

Although a lack of tech-savviness is the main driver behind consumer pushback, Casey said there are times where that isn’t the issue at all. Sometimes, he said, consumers simply prefer an in-person closing experience.

“Our business is very relationship-driven,” he said. “[Some consumers] love the celebration and the culmination of a homebuying experience where they could pop a champagne bottle and exchange the keys. They want that energy and excitement.”

Lastly, Casey said some consumers don’t mind submitting and signing documents digitally, but they still want physical copies at the end of the process.

“We created a product called Valet Closing, where people would literally drive up in the comfort of their car and show us their driver’s license through the window,” he said. “We’d take a picture [of the license] to sign the documents electronically and we would print [the documents] out and then stick them through the window and give them to them.”

“That’s another big thing. Some people want physical copies of things,” we added. “We’ve spent a lot of work creating marketing packages to deliver them, whether it be electronically or physical, but we have to have the flexibility to serve both types of consumers.”

Roadblock 3: Rigid real estate agents and brokers

Although Bizzarro believes paperless transactions are the future, he said agents and brokers must maintain the flexibility to serve all kinds of clients — even those who aren’t anywhere close to giving up their pens, paper and printers.

“Our clients are what led us to make a big shift [to paperless],” he said. “We wanted to give them what they wanted. A lot of them said, ‘I don’t have a printer. Do I need to go to Staples to buy one? Like, how does buying the right toner ink work?’”

“But if someone wants to bring me a 200-page printout, then I’d go get it and maybe scan it after that,” he added. “Real estate is a client business, it’s a service. I opened my agency to be in service to our clients, right? So if you’re not serving your people, you’ve got bigger problems.”

Bizzarro also said he refuses the idea that tech, although useful, is the deciding factor in whether a consumer has a positive transaction experience.

“The new buzzword in real estate is tech and ultimately, a lot of the technology is the same. The difference is just how they’re marketing it,” he explained. “Technology doesn’t make a good agent. Training does, teaching does and creating opportunities does.”

“If you’re a terrible agent, I can give you any tech you want and you’re still going to be a terrible agent,” he added.

Forsythe said Fathom has doubled down on its coaching and training efforts over the past year to help agents gently guide their clients into the digital transaction process, rather than surprise them with several apps and tools to download and use.

“We tell our agents their initial conversations, whether it be a buyer or a seller, should include an explanation of how the transaction will work so the buyer or the seller has that opportunity to ask questions,” she said. “The agent then has the opportunity to explain that we’re a paperless company and what that means.”

“They need the chance to talk through the process, ask questions and get comfortable before it’s actually in their inbox, right?” she added. “Imagine if all of a sudden an agent said, ‘I emailed you a DocuSign and 50 pages of an agreement for you to go through’ and they didn’t explain it to you. You’d be a little overwhelmed about that, right?”

Bizzarro said agents and brokers must remember consumers “don’t know what they don’t know” and take the time to educate them about the transaction process and learn about their specific needs and concerns, so they can choose the correct solution.

“There’s a knowledge gap we need to fill,” he said. “Obviously, there’s so many platforms and so many ways to do things. If you want a PDF, there are like nine ways you could have a PDF, so I don’t think the solution is trying to make everyone use one platform or tool.”

“For example, New York is an awesome, diverse melting pot of everybody, all races, all ages, everything like that, and it’s the same with technology — some people adapt and some people don’t,” he said. “I know that’s not a necessarily interesting insight, but that’s what it is.”

What are the solutions?

While politicians are working on the legislation needed to create a uniform approach to remote online notarizations and e-closings, Forsythe and Casey said are several things real estate and mortgage industry leaders can do now to optimize the experiences for consumers.

“One of the areas that we need to focus on is the immediacy of sharing information across the different parties in the transaction,” she said. ” We have an accepted offer and we get that uploaded into our transaction management software. But then how does it get to the mortgage company? How does it get to the title company? How does it get to the warranty company? How does it get to the appraiser?”

“Let’s say the closing documents aren’t correct because the title company didn’t get an update on an amendment to price, which could delay the closing,” she added. “That’s an area of constant improvement from a software perspective and a digital closing perspective.”

“How do all the different parties talk to each other? We can work on improving that now.”

For Casey, the ultimate game-changer would be getting lenders and investors on the same page. The boom in mortgage originations and refinances have pushed understaffed lenders to the edge, he said, meaning they currently have little time to effectively enact a process change.

“For them to make process changes to accommodate electronic closings, it’d be like changing a car tire as you’re going down the highway and 65 miles an hour,” he said. “But now that things have slowed down a little bit, we’re seeing more and more lenders dedicating time to change in their process.”

In addition to changes at the lender level, Casey said private investors must be able and willing to accept documents electronically. “While the lender dictates the process, the investor dictates how they’ll receive the note, whether it be electronic or physical delivery. So there are opportunities for change there,” he said.

While lenders and investors work on their differences, Casey said his focus is on optimizing the experience for consumers with the tools at his disposal, such as electronic signatures, end-to-end mobile document delivery and video conferencing to recreate the magic of in-person closings.

“We have spent a lot of time working on end-to-end mobile delivery for consumers,” he said. “If you buy a home through Coldwell Banker, you’re going to get all your documents there, and hopefully if you’re using one of our Realogy Title Group companies, you’ll have everything in a mobile setting and I think that is incredibly powerful.”

“We have access to options that weren’t even really thought of five years ago,” he added in reference to virtual closing celebrations for homebuyers. “But today, it’s more common. We have to take advantage of it.”

BY MARIAN MCPHERSON
Originally posted on Inman.com 

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Zestimates can’t keep up with wild housing market, agents say

Agents from around the country talk about the widening gap between Zestimates and MLS home value data as inventory shortages push prices to new highs

This is the second part in a week-long series on Inman.com exploring comps amid a pandemic and a tumultuous housing market.

Zestimates, long lambasted by agents as inaccurate, have been swinging out of control in today’s turbulent market, with some prices skewing hundreds of thousands of dollars off the mark.

Tim Collom, who leads the Tim Collom Real Estate Group in Sacramento, and three other agents told Inman that it seems like the portal giant is having a difficult time properly reflecting the astronomical boom in home prices due to historically low inventory and intense bidding wars.

Collom said that estimated home values provided by companies like Zillow and Redfin “never line up” with reality, but they’ve only gotten worse in recent months: “They’re not off by $10,000. They’re off by like $100,000 to $200,000.”

“In Sacramento and some other areas, Zillow estimates can be high by 10 percent and they also can be low by 10 percent, but very rarely do they hit the mark right now,” he added. “I think it’s because of the market volatility and how fast it’s going — even seasoned real estate agents are struggling to keep up with price trends right now.”

In Big Sky, Montana, real estate agent Michael Pitcairn said Zestimates are more than 10 percent lower than the MLS home value data his brokerage uses to help buyers craft offers and sellers set listing prices.

As of April 23, Zillow listed Big Sky’s home price appreciation trending at 21 percent year-over-year, which is 14 percent lower than Pitcairn’s 35 percent year-over-year estimate. Realtor.com came in closer at 34.6 percent.

“Just the past year, we’re seeing a lot of cash transactions, multiple offer situations, and folks going above list price,” he said of the rush of buyers who’ve come to Big Sky during the pandemic to purchase primary and secondary homes.

Meanwhile, in Wesley Chapel, Florida, Innovation Realty Group broker-owner Mollyana Ward said home values have skyrocketed to unheard-of levels due to the worsening imbalance between supply and demand. Ward said she rarely looks up Zestimates on her own, as they’ve never matched the home price data provided by her MLS, Stellar.

“I [view Zestimates] only because, a lot of times that’s how the buyers communicate. They send that stuff to you, so you see it,” she explained. “I use the [sales price] tools on our MLS. But even that’s just what you see on paper.”

Ward said home price estimates, whether they come from an MLS, Zillow or another search portal, have become less relevant as homebuyers are willing to enter intense bidding wars for homes that would be considered overpriced in a more normal market.

“In reality, our listing prices were already at what we believe is already over the appraised value,” she said. “So in terms of how does a [value estimate] help educate you in this market? It probably doesn’t at all.”

Ward said now more than ever, sellers are pushing the listing limits and winning. “It’s kind of like, ‘What do you want to sell it for? Within reason, what do you want to go for? Let’s try it,’” she said.

“I have a personal home that I listed on Tuesday at 5:30 p.m., and by 6 p.m., I had two full-price, cash offers,” she added. “The next day, I allowed showings, and then I turned them off after 7 p.m. There were at least 20 showings, and I had to sort through at least 12 different offers the next morning.”

“I got plenty of [buyer] letters, but at the end of the day, I wanted a quick closing, in cash. It’s been very crazy.”

The Zestimate ordeal has gone the other way too, The Bizzarro Agency broker-owner Matthew Bizzarro told Inman. He said Zillow and other portals have always had a difficult time properly providing estimates for New York City properties, and the Zestimates and other portal estimates he’s viewed are actually higher than current NYC market trends.

“We really haven’t seen much growth,” he said of the current New York market. “We’ve seen the opposite, especially early in the pandemic — everyone fled the city.”

“In general, it’s really hard for them to give us estimate in vertical living. Because it’s hard to have an algorithm that prices out things such as water views, southern exposure, high floor, west of the park, etc.,” he added. “It’s really hard for the algorithm to find the nuances that are unique to vertical living in cities.”

Even as people have started moving back, Bizzarro said buyers can still find great deals in the city as home prices are still 5 to 7 percent below pre-pandemic price trends. However, he said bidding wars are slowly coming to the Big Apple, too.

“A lot of the surrounding suburbs have benefited from the leaving of the cities, but I’ll tell you this: The buyers that have bought or had the foresight to buy over the last 12 months have gotten phenomenal deals,” he said. “Some of the prices are starting to go [up again] with bidding wars.”

In an emailed statement to Inman, a Zillow spokesperson said the portal has improved its Zestimate over the years with a median error rate of 1.9 percent for on-market homes and 7.3 percent for off-market homes, and they’re trying to keep up with the rapid rise of home values over the past months.

“In an extremely fast-moving housing market such as what we’re experiencing today, it can generally be more challenging to value homes,” the spokesperson said. “Which is why we have a team of data scientists who continually monitor our accuracy against the market in real-time and then take steps to adjust the underlying assumptions of our model accordingly to improve the Zestimate’s accuracy in today’s hot market.”

“Working with a great local real estate agent can help consumers navigate the challenging market,” they added. “With home prices on the rise, the Zestimate is a helpful starting point, but it’s not an appraisal.”

No matter where your market stands in the Zestimate battle, Collom said smart agents are able to use search portal estimates to spark meaningful conversations with buyers and sellers so they can make the best decision for their goals.

“[These portals] contradict themselves all the time,” he said. I think it’s a natural battle [between portals and agents]. People don’t like them because they have to do extra work and show people why it’s not this [price] and it’s that [price].”

“At the same time, I like the [estimate battle] because it just further proves that having a real estate agent go through your property is way more of a source and a better source in general,” he added.

 

BY MARIAN MCPHERSON

Originally published on Inman.com

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November 2020 Upper Manhattan Residential Real Estate Market Report

The Upper Manhattan residential real estate market is seeing what could be the beginnings of a recovery.

The Mortgage Brokers Association just announced that the national forbearance rate, a key indication of whether folks are able to pay their mortgages, fell seven basis points to 5.83% for all types of loans. That’s news worth celebrating, because this means that a lot more borrowers are starting to pay on their loans again.

The listing count, a grassroots indicator of what’s going on neighborhood by neighborhood, also contains some good news. This is the first month since June, when New York City real estate agents were deemed essential, that the number of listings has gone down! Even Harlem, with its massive amount of new construction and inventory, has hit a plateau with just under 350 properties available for sale.

Prior to the pandemic, Upper Manhattan (the borough’s northern tip that includes the historic neighborhoods of Harlem, Washington Heights and Inwood) had units with similar size and amenity sell for about half that of their downtown equivalents. And with a moderate 12%-15% decrease, the region has been spared the drastic price reduction the rest of Manhattan experienced.

In the last couple of weeks, uptown listing agents have seen a noticeable uptick in bidding wars on properties that were priced to move. What’s more interesting are the types of properties going into contract: studios and one-bedrooms, or in other words, inventory popular with first-time homebuyers.

With bidding wars back, mortgage interest rates dipping below 3% and Upper Manhattan’s abundance of co-ops with low financial barriers, a few brokers are cautiously optimistic about a recovery.

It seems as there are a tremendous amount of savvy individuals out there that are scraping, saving up for that down payment–or borrowing gifts from family–because they realize the opportunity they have won’t last forever.

In just the last two decades, New Yorkers have experienced a few down makers themselves. First, the down market of 2002 after the tragedies of September 11th. And then the down market of 2009 after the financial crash of 2008. And in both occurrences, plenty of pundits were quick to declare that the city would never return to her former grandeur.

“The demise of New York City has been greatly exaggerated.” said Matthew Bizzarro, the newly elected Upper Manhattan REBNY Co-chair at a digital industry event. “We have a track record of going through an eight to eighteen month recovery period after the unthinkable occurs.”

He went on to say that, “All of the clients that I worked with–even back then it was mostly first-time home buyers–in 2009 and after 9/11… they knew they were sitting on an opportunity. And their family, their friends, the media, pretty much everybody called them nuts. They were called crazy; they were accused of throwing their money, their lives and their future away! After twenty years in the business, I can tell you that these are the same clients who called me back to sell and made the most money out of anyone I’ve worked with. All because they had the foresight and the courage to purchase in a down market.”

Matthew Bizzarro is the Broker of Record and Owner of The Bizzarro Agency, an award-winning boutique residential real estate company serving buyers, sellers and investors in Upper Manhattan and The Bronx.

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Are incentives the key to navigating a softening seller’s market?

Agents in California and New York share how they’re dealing with softening seller’s markets and whether buyer’s incentives are worth the potential trouble

Desperate times call for desperate measures. Or do they? That’s the conundrum agents across the nation are dealing with, as evidenced by a recent SFGate report detailing the rise of buyer incentives in San Francisco, a robust sellers’ market known for sky-high listing prices for even half-burned properties.

However, the coronavirus and its ensuing impact on the economy and consumers have turned San Francisco and other markets like it upside down. The buyers who were once clamoring for their spot in the city are now turning their sights elsewhere — a shift that’s pushing listing agents such as Emily Beaven to embrace buyer incentives.

“We’re not even getting calls on things. It’s a bit of a ghost town. Then I started to see the incentive trend happening,” Beaven told SFGate. “When you’re not in a super-strong seller’s market, when properties need that extra boost, that’s when [incentives] happen. We’re entering a period of desperation.”

In a phone call with Inman, Beaven said the incentive, which is a consultation with a professional organizer, has yet to bring increased interest or offers on the 400-square-foot SoMa condominium she’s struggling to sell.

“When someone walks into it, the first thing they’re gonna see is it’s small,” Beaven said. “That is a challenge for some people, but it’s also an opportunity and so I wanted to do something a little bit different to maybe appeal to the people that might not think it could work for them.”

“I haven’t gotten any calls, specifically, because of it,” she added. “But I literally just had a showing there today, and the agent said, ‘Oh yeah, I saw it the MLS, and the buyer said it’s really awesome, and that’s really smart that you’re doing that.’ So I think the feedback is good.”

Although San Francisco isn’t the only market to experience a softening seller’s market, Beaven said it seems to have hit the area harder — a fact that agents are trying to adjust to.

“At the end of the day, I don’t think incentives are going to make someone purchase a property,” she said. “But I think that they’re just going to help you stand out from the pack, and right now, we have a very large pack.”

“Gone are the days in San Francisco, specifically in the condo market, where you can simply put up some attractive photos, maybe do a video, maybe do some marketing, and expect to get multiple offers and so much interest and it winds up going 10 percent over the listing price,” she added. “It’s just not happening now.”

New York-based broker-owner Matthew Bizzarro is facing a similar situation as Beaven, with New York City’s status as a staunch seller’s market softening as COVID triggers a great reshuffling amongst residents. However, Bizzarro said buyers’ incentives remain virtually non-existent as he and many of his colleagues remain busy.

“We’re extremely busy right now,” The Bizzarro Agency broker-owner told Inman. “We don’t have to actually don’t have to offer cars or stagers or designers.”

“What we do offer is an exceptional concierge service for our clients to make sure it’s a seamless process,” he added. “I know, that’s not really, I guess, different. But we’ve actually been fortunate enough to not have to go beyond that.”

Instead of offering incentives, Bizzarro said New York City’s sellers and listing agents are taking a simple, tried-and-true approach to getting a home off the market: lowering the asking price. 

“In the market for buyers, there’s less of a sense of urgency. They understand that they don’t have to purchase right now,” he explained. “Right now they can wait and see what comes on the market and negotiate.”

“There will be the most amount of inventory I’ve probably seen in 20 years [this fall and winter],” he said. “It is going to be very busy because a lot of buyers who want to stay in New York or have to stay in New York because their job is in New York, or they just love the city and are here because we’ve been through the worst already, are waiting for the comeback.”

In addition to lowering the asking price, Bizzarro said sellers are willing to pay off building assessments or other fixed expenses but don’t go as far as offering incentives, such as gift cards or other expensive items.

“New York City is its own beast in real estate. We run very differently than everywhere else,” Bizzarro said.

Back in California, ACME broker-owner Courtney Poulos said Los Angeles’ market is robust with plenty of buyers and sellers entering the market after months of lockdown. Although sellers still have a slight upper hand, Poulos said they’re still doing all they can to distinguish their home and attract buyers.

“The market in Los Angeles is extremely hot,” Poulos told Inman. “Now that people are working from home, a lot of emerging neighborhoods have come into demand and buyers are seeing that they can actually get more house for their money in transforming areas in LA.”

“It’s not gentrification, [in] the way that we think of that word,” she explained, “but there are areas where there’s quite a bit of commercial development and community investment that has been making strides towards creating more live-workplace resources in a smaller radius.”

She added that the market for properties priced under $2 million “has just been on fire. People are getting the house that they love, but they are in competition for that house.”

Poulos said listing agents are working to distinguish their listings with stellar photography, interesting staging, and needed interior and exterior upgrades. However, some sellers are open to buyers making offers on items such as furniture or cars alongside the house to set the property apart.

“One of my agents, Dominique, had a sale where the images actually have the seller’s classic car in the driveway and it could be included for the right price with the sale,” she said, noting that the tactic drew attention and resulted in an offer that included the car in the contract.

But before pushing clients to incentives, Poulos relies on tried-and-true marketing strategies: quality staging and great photography. “If I was sitting with a seller and they said, ‘Okay, well, should I just throw in the boat?’ I’d say, ‘No, don’t throw in a boat. Sell the boat and put $5,000 into your staging,’” she said. “I’ll spend $1,000 on the photos. Get your cousin to come paint the house and we’ll have this thing sold in 20 days.’”

Although the trend of listing agents offering buyers’ incentives hasn’t taken off in Los Angeles, Poulos said buyers are pushing buyer’s agents to offer incentives in the form of discounts.

“There’s a lot of competition for the buyers right now because the buyers are ready to go and they sometimes don’t feel like they need to choose an agent,” she said. “I’m getting a lot more requests [for discounts], but I’m not a discount broker.”

“There’s a lot more requests from people asking, ‘Oh, so and so down the street said they could do it for half-point [less], or I’ll get a $2,500 credit from their commission,’” she added. “I am seeing a lot more savvy buyers make demands in exchange for representation.”

Risking a conflict of interest is what’s keeping Sacramento-based Tim Collom Realtor Group leader Tim Collom from ever offering a buyer’s incentive, even if the market experienced another sudden slowdown.

“Right now, there’s really there’s nothing that we need to incentivize,” he said. “There are multiple offer [situations] everywhere.”

“Even if the market slowed down, I wouldn’t give an incentive,” he added. “I think that’s important [to] the integrity of our business not to do that. Even when it comes to listing agents offering bigger commissions, we’ve stayed away from that, too.”

“We’ve always maintained the commission that’s offered is usually enough, and people should really do what they’re supposed to be doing as far as their job is concerned,” he continued. “Agents really shouldn’t be incentivized by the commission anyway, they should be doing the right thing for their clients. I know that’s against your article, but I feel like that’s the truth.”

Collom specifically pointed to the Real Estate Settlement Procedures Act (RESPA), which prohibits kickbacks, referral fees and unearned fees among other things. Although it seems buyer’s incentives, such as gift cards or including the seller’s car with the sale, doesn’t violate RESPA, Collom said it’s too great of a risk.

“I think there’s a lot of dangers involved with incentives just because it’s not an even playing field,” he said. “What happens is that people start buying homes because of the incentives and not necessarily an upgrade to the house, like new countertops or flooring.”

“My group has the top agents in Sacramento and we could probably offer all sorts of incentives,” he added. “But when does it stop? Ultimately, it always should be about the houses and real estate.”

Beyond risking RESPA violations during the sale, Poulos said offering incentives opens the door to issues once the transaction is over.

“You can’t pick and choose who gets the incentive and who doesn’t. It has to apply to everyone,” she said. “Besides that, there are lemon laws in California, and if you’re throwing in a car, what’s to say the buyers won’t come back at you if the car doesn’t work well?”

“There could be a post-transaction liability,” she added. “A smarter agent is not going to incentivize the buy by giving the buyers things.”

Although Beaven said she understands the apprehension toward buyer incentives and the possible legal risks, she said it’s not about making random incentive offers and seeing what sticks. It’s about offering an item or service that will provide a solution to an issue with the listing.

“Sometimes [an incentive] can offer a kind of reassurance and a little bit of certainty, which is really helpful for a buyer,” she said in reference to her home organizing offer. “You have to be smart and you have to make sure [the incentive] makes sense for the property. If it can solve a challenge, that’s even better.”

 

BY MARIAN MCPHERSON

Originally posted on Inman.com

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September 2020 Upper Manhattan Residential Real Estate Market Report

I’m about to quote 🤓 you one page out of the classic 📖 children’s book Henny Penny. And it says, 💨🌰

🐔“Goodness gracious me!” said Henny Penny.
“The sky is falling! I must go tell the King.”
And away she runs. 🏰

🐓🦢🦆🦃 Henny Penny then goes and gets her friends.
We got Goosey Loosey, Ducky Lucky, Turkey Lurkey.
And they’re running. They’re not thinking 🤔 “Why is the sky falling?”.
They’re not trying to find an answer.

And what happens? 🦊 They stumble upon the Fox.
The Fox sees this. The Fox is very wise.
And he says, 👑“I can show you a better way to the King!”.

So spoiler alert! He shows them a better way, right?
Right to his cave 🍗 And then he and his family eat them all 🦴

🤨 What am I talking about?
We have 359 units for sale in Harlem. 📈🆙

As we’ve previously discussed, 🏠🏙🏠 Harlem has the highest unit count because of all the new construction and new development that has come to the market.

😲 And this number is almost 20% higher and it was last month. 📈🆙

📊 Then we’ve got Morningside East Harlem, Washington Heights, Hudson Heights all come in with about 80 units for sale. Hamilton Heights, 64. Inwood, 46. And the Fort George area has 13.

😲 These are also across the board about 10% higher than they were last month. 📈🆙

Yeah, it’s high. But I also know that going into 🗓 October, this is typically the time of year with the highest amount of listings on the market. 🏰 So with that perspective, I’m not freaking out.

🤗 I’m happy to report that the sky is not falling.

That amount of inventory 🏘 creates a very interesting opportunity for buyers, especially since interest rates are at an all-time low. 📉⏬

🗽⛅️ If you’re sure you’re staying in New York, you can own in some instances for pretty much what you’re paying in rent. And this is the perfect time to upgrade 🍼👶 because there are a lot of well-priced options available.

Sellers: the sky may not be falling, but what has fallen a little bit are prices. 🏷⬇️

📊We were at about 5% to 8% already, and I can predict that going up to about 10%, maybe even 12% as we head into the wintertime. ☃️🌨

The fact is, is that Upper Manhattan has seen a fair price increase year over year, over year, over year and there has to be a correction. 🌇 And the good news for sellers is that this is not like the correction the market downtown has been seeing. 🥳 The key thing to think about is pricing your homes correctly.

👨‍🏫 Remember that when buyers have a choice, we have to be competitive. ✌️

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August 2020 Upper Manhattan Residential Real Estate Market Report

It’s August! ☀️ What’s happening to New York City’s Real Estate Market?

Almost two months since we are back in business and New York City’s market is already on 🔥! I’m here to tell you where it’s going as we dig in the August market report.

Best way to see the future 🔮 is to look at the past, especially at the COVID effects to our current market, because data doesn’t lie.

📊2019 Upper Manhattan Closed Sales:
Q1 ➡ 250
Q2 ➡ 330
Q3 ➡ 305

📊2020 Upper Manhattan Closed Sales:
Q1 ➡ 258
Q2 ➡ 160
Q3 ➡ You are here 👋

📊There are current 6️⃣9️⃣1️⃣ homes for sale available in Upper Manhattan.
Harlem ➡ 307 listings
East Harlem ➡ 76 listings
Morning Heights ➡ 76 listings
Hudson Heights ➡ 65 listings
Washington Heights ➡ 62 listings
Hamilton Heights ➡ 53 listings
Inwood ➡ 39 listings
Fort George ➡ 13 listings

📈Supply is very high.
📈Inventory is on the rise.
👥Buyers are meeting the demand.

Don’t believe everything you read 📰, because in reality, the market is moving. It’s 🔥 right now in upper Manhattan. The Bizzarro Agency has never been busier!

HOME SELLERS: You’re on the market right now. If you get no action 😐, no traffic☹️, and no one wants to visit your apartment 😭, it’s probably overpriced.

Nowadays buyers want a deal because they’re buying it during a pandemic.
🚨Apartments that are priced right are the ones that are selling.
🚨They’re not going to overpay.
🚨This is not a market to overprice your property by $50,000 or more.

This is a real market. And in this market, you have to price your apartment right to drive traffic to your listing.

For every 1️⃣ person that’s leaving the city, there’s another 🙋‍♀️coming back.

📣 There is no better time to purchase than right now! 📣

If you know you’re going to live in 🗽:
➡ There are a ton of listings to choose from
➡ Mortgage rates are at a historic low, around 3%
➡ Buyers are able to stretch their dollar further than ever, which allows them to purchase bigger spaces, more expensive places that they would not have been able to get six to twelve months ago

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Matthew Bizzarro Elected REBNY Upper Manhattan Committee Co-Chair

Matthew Bizzarro has been elected by his peers to Co-Chair The REBNY Upper Manhattan Residential Brokerage Committee for 2021-2022. He will hold a 2-year term commencing on September 1, 2020, and conclude August 31, 2022 along with his co-chair, Beth Gittleman of Compass. As the Committee Co-Chair, Matthew will take the lead in establishing committee initiatives, shaping the future of the industry for agents in Upper Manhattan.

Election season for the Co-Chair position has started in late May, with the ballot box closing on June 12th.

The REBNY Upper Manhattan Residential Brokerage Committee provides an open forum and networking opportunity for those practicing in the upper Manhattan vicinity The committee places emphasis on the residential markets of Washington Heights, Hudson Heights, Harlem, Hamilton Heights, and Inwood. The committee is Co-Chaired by Beth Gittleman.

The Real Estate Board of New York “represents influential real estate professionals as it works to protect, improve, and advance the business of real estate in New York City.”.

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Cristina & Daniel for Matthew Bizzarro

Hear how the honesty and hard work of Matthew Bizzarro helped qualm Cristina & Daniel’s anxieties surrounding homebuying for a family!

 

“From the first time I spoke with Matthew, he was attentive, he was responsive, he had very thorough, honest answers and he was great to work with throughout the whole process of our search. We were searching for a long time so it was really good to have to have him as a resource. ”

“He educated us throughout the way as well because we are first time buyers. We knew nothing about the market or how to negotiate or any of those things. His knowledge of the area came in really handy for that because we had lived in the area for many, many years as renters, but we weren’t familiar with the buildings in the area as buyers.

We didn’t necessarily know “is this co-op board crazy, you know, is this building financially sound.” And he had a sense of which ones we might want to avoid and which ones were actually really great buildings that he knew for a fact would be a wonderful place to live. And our daughter would now have a bedroom of her own because we had always been in a one bedroom, a rent stabilized one bedroom, which is how we saved in order to buy a place.”

 

-Cristina & Daniel

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Taisha for Matthew Bizzarro at the Bizzarro Agency

Check out how the Bizzarro Agency handled all of the home-buying hoops, and helped Taisha felt heard and satisfied!

 

“I would recommend the Bizzarro Agency because they listen to what we’re looking for. They are very to the point, they have the resources that all home home buyers need when buying a home and they’re the best.

I mean, I can’t say it. There’s no words to describe, the experience they made us feel. ”

 

-Taisha

 

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Ramon Baez for Thomas Rainey

Check out Ramon Baez’s experience with Thomas Rainey and the Bizzarro Agency was satisfying from start to finish!

 

“The reason I would recommend Tom and the Bizzarro Agency in general is because they kind of bring you in. They get to know your personality, they get to know you as a person. And Tom was great. Everything from the beginning all the way to the end.

He was there, he helped me find contractors, he helped me take a look at a few other apartments in the neighborhood. And once he got to know more or less like what we were looking for, he helped me find a wonderful attorney and he was able to explain everything in detail all the way to the end. And I really appreciate that.

The Bizzarro Agency itself, you know, once I got to know more of the people in the Bizzarro Agency, I guess I understand why they’re so special. I really appreciate everyone there.”

 

-Ramon Baez

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