A Technology Culture in Real Estate

January 26th, 2012

As mentioned in a previous post, I attended the Real Estate Connect conference earlier this month. During one of the sessions, the Inman News staff revealed the results of a survey they took of over 1000 real estate agents. There were many interesting findings, but the one that resonated with me was that 61 percent of top real estate agents in the US are considering leaving their brokerage. The top 3 reasons were:

1. Disatisfaction with technology
2. Company culture
3. Lack of confidence in the vision for the future of the brand

This was particularly interesting to me because looking at the real estate business from the outside, I marveled at these 3 items, and they became the impetus behind starting RealDirect.

We believe that by embracing technology, the culture and confidence in the vision of the company will take care of itself. Here at RealDirect, we consider ourselves as much a technology company as we are a real estate company. We chose to locate in the heart of New York’s tech community, and have more web developers than sales people. But it’s our approach that is our true differentiator.

Quite simply, technology is a part of our DNA. We constantly look at our business and ask what we can do better by utilizing technology and data. Some things, like board packages for co-ops, are still stuck in the 1980′s, and no matter what we want to do, we still find ourselves killing trees to make the hundreds of sheets of paper needed for these antiquated forms. However, when a client asks us how long it will take to sell their apartment, we attack the problem like scientists and not salesmen. And the great thing about real estate is that most of the questions that come up every day have real data driven answers. A home is just a composition of space, rooms, amenities, condition, views, and location. When you break down these data points, there are tons of answers in them that make the process of buying and selling much less of a mystery. And by making the process transparent, we have the opportunity to change the perception of the real estate pro from a pushy salesman to a trusted consultant.

That is our vision of how a culture of technology can change real estate. If you share our vision, we encourage you to join the team!

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What are Buyers Looking For? Top 10 List

January 25th, 2012

As we mentioned in a previous post, when helping buyers find their perfect home, we gather information about multiple data points to help narrow down the properties that will suit the individual buyer’s needs. This data helps us eliminate properties that definitely will not work and hone in on properties that are the closest to ideal. This information also gives us some great insight into what buyers in general are looking for.

Based on our survey, the top ten items that buyers classify as “must have” or “wish list” are as follows:

Noah Rosenblatt, founder of Urbandigs.com expounded on our original post by saying:

“Over the past 6 years of writing this blog, I’ve made it very clear what buyers in the Manhattan markets bid up for:

1) Light/Views
2) Location
3) Raw Space”

He goes on to say “By far in this marketplace buyers bid up for views (think river or park views, followed by full city views) and natural sunlight. After that it tends to be about raw space and whether the subject property is large enough to meet the client’s needs. Then comes location – many would think location would be top of the list, but I find this not to be the case in a market like Manhattan. Let me explain.

As Manhattan prices rose and affordability declined over the past decade, buyers widened their criteria of neighborhoods they are willing to live. Buyers that once would only consider living in the West Village, realized that if they are going to buy what they want & need that they may have to consider Chelsea or other neighboring areas. Once that buyer gets a taste of more desirable features and starts to understand what his budget can get in another neighborhood, it anchors them to expecting those now affordable features; such as a bathroom in master bedroom or a full city view. The end result is a buyer who will now have a wider search requirement, dampening the power of “location” as the top desired feature they will bid up for.”

Based on our survey results, Noah is spot-on in his views of what buyers are looking for. Looking at our top 10 list, we see that buyers are looking for light, space and views. While location is important to buyers, specific location is not. Because there are so many outstanding choices in New York City, our data shows that buyers search for properties in an average of eight neighborhoods. While buyers do generally have a specific borough preference, within their borough of choice most buyers are not set on living in one specific neighborhood. When it comes to real estate in New York City, it seems that where you live has taken a back seat in importance to how you live.

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“We Have to Get a Bigger Place” – 5 Tips for Buying the Next Apartment

January 23rd, 2012

Tripping over toys? Wondering if a lack of closet space is going to drive you to divorce? Sick of cooking on a hot plate because your kitchen is just a shelf in the corner? Sounds like it’s time to buy a bigger place. Here are some things to keep in mind:

1. It’s important to try to sell your current apartment before buying the next, particularly if you’re planning to buy in a co-op, as a co-op board is unlikely to approve you if you still own another apartment. This can be managed by scheduling both closings within a few days of each other so you’ll be able to move directly from one apartment to the next, writing a “lease-back” into your contract, in which the new owners don’t take occupancy for a set time period and you essentially pay them rent, or by moving into temporary rental housing while you wait to find the right new home.

2. Explore the boroughs. If space is your top priority, you’re likely to get more bang for your buck if you move a little further out from Manhattan. There are larger apartments, brownstones with gardens and even single family homes available in many of the other boroughs. That said, some of the more trendy areas in Brooklyn and Queens are now exceeding some areas of Manhattan on a cost per foot basis, so do your homework. Read the rest of this entry »

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Pied-a-terre: Condo or Co-op?

January 20th, 2012

When deciding to purchase a second home, or “pied-a-terre” in New York City, it’s important to consider whether you want to purchase a condo or co-op. Each has its benefits and difficulties, but both are viable options for buyers looking to get a “foot on the ground” in NYC.

If budget is important to you, then you may want to go with a co-op, as condos are generally priced higher than similar co-op units. Co-ops also make up the bulk of available inventory in New York City (around 70% of all available units are co-ops), so if you decide to go with a condo your choices will be more limited. Should you choose to purchase a co-op, it’s important to check out the building rules before you even go to see the apartment, as many co-op boards are only willing to sell to full-time residents and will not even consider pieds-a-terre. A co-op in New York City cannot be purchased without approval of the board. The co-op board may also have rules about how you can use your apartment (i.e. no guests while you’re out of town, no tenants, etc).

While more expensive on a per foot basis than comparable co-ops and not as abundant in inventory, condos offer many attractive benefits. Perhaps the most important upside to purchasing a condo is the fact that no board approval is required, and condo rules are less restrictive than co-ops. Condos are more likely to allow you to loan your apartment to friends and family or rent it out when you’re not using it. Condos also have lower down payment requirements than co-ops, which makes them appealing to people with an acceptable income level but not a lot of liquid assets.

That said, there are exceptions. Some co-op boards are open and welcoming to pied-a-terre buyers. And it’s becoming more common for condos to adopt boards and more restrictive policies. With these points in mind, it’s important before any purchase to be certain of building policies and look at total monthly outlay in addition to up-front costs and make an informed decision that works for you.

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The Future of Real Estate Search

January 19th, 2012

Last week, I was fortunate enough to be selected to participate in the Future of Real Estate Search panel at the Inman News Real Estate Connect conference here in NYC. As someone who came out of the online advertising and search industry, I have always had a different perspective on real estate search than most real estate brokers and search vendors. With my insights uniquely positioned from a technology perspective, this is what I see for the future of search:

1. Maps
A maps based user interface is clearly the preferred way to search for real estate – look at the explosive growth of sites like Zillow, Trulia and Redfin – yet nearly all real estate brokerage web sites still have the same search user interface they had 10 years ago. I think we will see most brokerages switch to a maps based UI in the next few years. Read the rest of this entry »

Posted in Buying & Selling, RealDirect News | 1 Comment »

Can I Be My Own Agent and Collect 3%?

January 17th, 2012

For newcomers to the real estate market, there can be confusion about who is responsible for paying the agents involved in the transaction. As a general rule, the seller pays both their own agent and the agent who successfully brings them a buyer (the buyer’s agent). When a seller signs a listing agreement with a real estate agent, they establish how much the agents will be paid. While there is no set rate for real estate agent commissions, 6% is standard practice in a lot of places, with 3% going to the seller’s agent and 3% going to the buyer’s agent. This commission split is called a “co-broke.”

Among New York City real estate buyers, there is a train of thought that says “If I represent myself, the seller won’t have to pay a commission to a buyer’s agent. Therefore, I can expect to get the property for 3% less than what I would have paid if an agent represented me.” Or, “If I represent myself, I should be able to collect the 3% commission that would normally go to the buyer’s agent.” Unfortunately, there are some logistical and legal issues that prevent this from actually happening in practice. Read the rest of this entry »

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10 Things to Consider When Making the Leap from Renting to Ownership

January 16th, 2012

With a strong buyer’s market, reduced property prices and low interest rates, it’s a great time to think about making the leap from renter to home owner. Before you decide whether or not to sign on the dotted line, here are ten things to consider:

1. Home ownership is a long term commitment. Unlike renting, which allows tenants to move every year at the end of a lease, homeowners should plan to stay put for at least four years. Factoring in closing costs, taxes and real estate fees, selling a home any sooner than four years after purchasing is likely to result in a financial loss. This number will vary from region to region and is dependent upon market conditions, but the days of buying a house and then flipping it six months later for double the purchase price are long gone.

2. Taxes. You have to pay property tax when you own a home. Your property tax is calculated by multiplying the assessed amount of your property (as determined by your local municipality) by the prevailing tax rate (also known as the “mill levy”). As a renter, you’re technically paying property tax as well, you just don’t see it because it’s built into the cost of your rent. When you own your property, you can choose to pay into an escrow account with your mortgage company and let them take care of paying the property tax, or you can pay your taxes directly to the city. You will be billed twice annually, and the cost of property tax varies dramatically from town to town and region to region. The upside to the tax situation is that home ownership is heavily subsidized by the federal government, meaning that your property tax, interest paid on your mortgage, and points paid at mortgage origination are all acceptable tax deductions. Renters do not see any tax benefits from their monthly payments, even though, as mentioned, the cost of property tax is usually built into their rental price by the landlord. For many people, their mortgage interest constitutes their biggest tax deduction. Additionally, capital improvements (permanent structural improvements or renovations which make the property more valuable) made to your property, can be added to the basis of your home to reduce any capital gain implications when you sell.  Co-op owners pay taxes as a part of their “maintenance” payment each month. Read the rest of this entry »

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10 Best Neighborhoods to Invest in for 2012

December 15th, 2011

Recently, Neila Deen, our director of sales and business development, was asked to talk about her “next hottest nabe” for the NY Daily News’ “Ask A Broker” column. This question made for a great article, and also sparked some intense discussion around the office. While everyone has their personal favorite up and coming area, we managed to stop arguing about the price per square foot in Brooklyn versus the Upper East Side long enough to put together a list of New York City’s next hottest neighborhoods.

Bushwick (Brooklyn) – While most of downtown Brooklyn has already seen new development and price jumps, a good value can still be had in Bushwick. Williamsburg became hot because is was a short ride on the L to the East Village, and the same logic applies to Bushwick’s close proximity to Williamsburg, which has become the new epicenter of cool. With it’s close proximity to Williamsburg and easy subway connections for commuters, Bushwick is well on its way to being the next big thing.

Yorkville (Manhattan) – While first time buyers have been deserting Manhattan in favor of Brooklyn, and with prices skyrocketing in areas like Williamsburg and Dumbo, Yorkville is poised for a comeback for those who want an easy commute and great housing stock. With some of the lowest prices per square foot in Manhattan below 96th Street, and the Second Avenue Subway under construction, now is the time to buy.

Grand Concourse (Bronx) – Recently designated landmark status, a grand history, Yankee Stadium and a huge concentration of Art Deco architecture make the Grand Concourse area of the Bronx a neighborhood ready for a resurgence. Prices are very low and could see a significant increase as the city implements redevelopment plans including a waterfront park, lofts, shops, hotel and recreation. And where else can you get a renovated classic 7 with open views for $300K? With excellent transit options already in place, the Grand Concourse has major “hot nabe” potential.

Red Hook (Brooklyn) – Ikea and Fairway Market have already set up shop here. There’s prime, waterfront property available for luxury development. The biggest stumbling block at this point is the Culver Viaduct Rehabilitation project, which has the subway to Red Hook shut down until 2012. Red Hook’s potential is contingent upon this project wrapping up in a timely fashion and subway service being restored to the area.

Clinton Hill (Brooklyn) – Another favorite neighborhood for families, Clinton Hill is seeing a rapid upswing in retail and residential development as well as renovation on many of the brownstone lined streets. Neighborhood schools have active parent participation, and the area is still relatively quiet and family friendly. With close proximity to trendy amenities in Downtown Brooklyn and Fort Greene, Clinton Hill is well on its way.

Greenpoint (Brooklyn) – Formerly an industrial area, Greenpoint was rezoned by the city in 2005 to provide for conversion to residential and retail. Home to McCarren Park, extensive luxury developments, and proximity to other, well-established areas of Brooklyn (namely, Williamsburg), make Greenpoint an attractive buy.

LIC (Queens) – Long Island City boasts a tremendous amount of prime waterfront, luxury development, studio space and art galleries. Restaurants and retail continue to flood the area and the streets are filled with stroller pushing families. Commuting to midtown Manhattan is a breeze, making LIC a no-brainer.

Sunnyside (Queens) – Nestled between LIC, Astoria, and Woodside, Sunnyside is only a 15 minute subway ride to midtown, but has a very strong residential feel. For those that want quiet residential streets, but to still have close proximities to the funky areas of Long Island City, Greenpoint and Williamsburg, Sunnyside is ideal. And with prices in Long Island City on the rise, it only makes sense that Sunnyside is next.

Rockaway Beach (Queens) – Billed as a lower cost, less bourgeois alternative to the Hamptons, Rockaway Beach is a surf town in New York City. Reminiscent of Williamsburg at the beginning of its upswing, Rockaway Beach has a young, hip vibe, with cheap property. Restaurants, food stands and nightclubs continue to open up as demand increases, and word is spreading that Rockaway Beach is a cool destination accessible by the A train.

Flatiron (Manhattan) – The Flatiron neighborhood is the epicenter of New York’s white hot Silicon Alley, and with the New York Tech scene now overtaking Boston as the second biggest start-up area, this neighborhood is on the rise. Fueled by venture capital, the companies are hiring at a pace that exceeds the rest of the city, and have attracted great services, restaurants and amenities to an area that used to play second fiddle to it’s neighbors Gramercy and Chelsea. As hot as the Flatiron neighborhood has been, it will only get better in 2012.

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Tips for Selling Your Home During the Holidays

December 13th, 2011

While many people choose to remove their home from the market during the busy months of November and December in order to avoid dealing with showings, there are still active buyers during the holiday season. For homeowners who decide to keep their property listed through the holidays, there are some important tips for staying “showing-ready” while still being festive.

1. Keep decorations simple, elegant and minimal. Opt for ornaments in colors like silver and gold instead of red and green and choose white lights instead of colored to avoid clashing with decor. Setting up a small display of holiday cards on a decorative plate shows lifestyle without going overboard.

2. Be mindful not to obstruct light or views. If you have a tree keep it small so it doesn’t crowd your space. Don’t hang anything in the windows as it’s vital to maximize the amount of light coming through and to show off great views.

3. Don’t wrap doors. Your door is the first thing potential buyers see when visiting your home. If you feel the need to decorate it, stick with a small, neutral wreath.

4. Presents, if displayed, should be tastefully wrapped and stacked neatly out of the way. If presents are bulky or numerous, they should be stashed in a bin and removed from the apartment prior to showings. Shoving them in a closet can give the impression that the home doesn’t have enough closet space.

5. Make the most of holiday cheer by baking cookies and setting them out with festive napkins. Your apartment will smell wonderful and your potential buyers won’t leave hungry.

Buyers who are actively looking during the holidays tend to be serious about their hunt and ready to make a decision, so follow the above tips to make the best possible impression and get your home sold.

Photo via OiMax

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New York City Neighborhoods – Greenpoint

December 12th, 2011

Brooklyn’s northernmost neighborhood, Greenpoint is nestled between Williamsburg to the south, Newton Creek to the north and the East River to the west. Formerly farmland, Greenpoint underwent a period of heavy industrialization in the 19th century. Signs of gentrification began to appear as early as the 1980′s.  Greenpoint’s 2005 rezoning from industrial to residential coupled with the climbing price of nearby Williamsburg real estate has brought an influx of younger residents. However, a long time Polish neighborhood, Greenpoint still retains its middle-class, multigenerational flavor.

Greenpoint has seen in increase in retail, dining and nightlife, particularly along Franklin Street, but it’s also convenient to the trendy hotspots of neighboring Williamsburg. There is also plenty of green space with access to McCarren Park and smaller McGolrick Park.

While there are many low-rise buildings, including  three family townhouses, the area has experienced a development boom and offers many new condos. The neighborhood enjoys a safe, family feeling with high rated schools and in terms of real estate prices, there are still good deals to be had.

Greenpoint residents who need to commute should plan to use the bus, as subway service to the area is limited to the G line, which does not run into Manhattan.

photo via owenfinn16

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