Saturday, June 6, 2009

Is Anybody Out There?

Oh, how I wish I had access to the true policy makers in Washington DC!
Recalling the idea of "six degrees of separation" if anyone reading my blog knows someone who knows someone who knows someone (you get the idea) feel free to pass the following along.

The Real Estate segment of our economy has generally been credited (or blamed) with sparking the current financial crisis. Therefore, the very same Real Estate industry is expected to trigger our return to financial prosperity.

While our overworked President Obama is calling for increased lending, let's examine the current state of the mortgage industry. While it is true that interest rates are at historically low level, many other factors are making the mortgage process daunting, at best. All of the real estate professionals with whom I speak acknowledge that, as a result of major price reductions in each and every geographical area, whether coop, condo or house markets, there is a genuine return of the buyers to the market. Especially so, with a perception that the rate of unemployment may begin to shrink, buyers need only feel somewhat secure about their employment status so they may take advantage of the combination of low mortgage rates and lower prices. So, what's the problem?

The banks are making the process of obtaining those mortgages more and more difficult instead of easier as President Obama would hope. Before the financial crisis, there were many products and programs tailored to particular types of purchasers that are simply not available anymore (or so hard to find as to be virtually nonexistent). For example, previously, there were "low doc or no doc" loans available. These loans made mortgages available to those who had more cash that usual to put down, but lacked the level of documentation typically required for mortgage approval. These loans are now almost impossible to obtain.

Then there was the 80-10-10 mortgage. For the purchaser who could only put 10% down on a purchase, the 80-10-10 loan provided a primary mortgage of 80% and a simultaneous "HELOC" or home equity line of credit for another 10% of the purchase price. These loans are now almost impossible to obtain.

Then there is the subject of new construction. Prior to the current situation, financing was readily available on new coop or condo projects where 50% of the units were sold. Recently, as a result of new Fannie Mae requirements, that number has gone up to 70% and in some cases 90%! This is preventing, or at least inhibiting the rebounding of the new construction part of our market. Factor in new insurance requirements that the banks are demanding, and we see loans on brand new construction where few units have been sold as difficult, if not impossible to obtain. 

Then there are the very small coops and condos, particularly like those located in parts of Brooklyn and Manhattan. As of a month ago, mortgages on 4 unit coops and condos were virtually impossible to get. I'm told that this situation has improved a bit, but not enough. If one cannot obtain mortgage financing on these small buildings, the units become virtually worthless except to all cash buyers. One can only imagine how this makes establishing a true value or price daunting. Which brings me to the subject of appraisals.

Appraisals are now the most difficult aspect of the mortgage process and, by extension, the home buying process. While I agree that the excesses of the past that contributed to the current spike in foreclosures could not have happened without the participation of the appraisers (the appraisers in many cases had to "rubber stamp" higher values in order to enable the excesses referred to), the pendulum has swung way too far in the opposite direction. The banks are now leaving us with appraisers who have absolutely no familiarity with particular neighborhoods and communities. In a city like New York, locations of properties one or two blocks in any direction could affect values significantly. We are seeing appraisals that are so far off as to be almost laughable (if it weren't so serious). I understand the banking industry trying to correct some of the mistakes of the past, but creating new mistakes is not the way to do it, especially when the net effect is to prevent those desperately needed mortgages from getting into the hands of those buyers who deserve them.

While I am not, in any way, suggesting that we return to the careless lending practices of the past, the banking industry must find a way to combine careful lending policies with the needs and realities of the purchasing public to solidify the resurgence of the Real Estate industry. 

And now for some client news: 
We've been patiently waiting for the return of "Candy" to RESCUE ME...well, read on from Milena Govich who plays the "good-hearted hooker":
Hello friends and family!   I hope this message finds you all having a wonderful and joyous summer.   To the point:

You've all been asking, and the wait is over---Candy is back on RESCUE ME!   But why.....?   ;)

Yes, I've returned to my first TV role of Candy, the upscale escort/con-artist who bilked Lou, the firefighter out of his life savings at the end of Season 2.   It's now Season 5 and the drama continues!

Tuesday, 6/9 at 10:00pm est/pst

FX Channel

If you can't watch the premiere, it will re-air on FX:
Tues 6/9 11pm e/p
Fri 6/12 11pm e/p
Sun 6/14 11pm e/p

Beginning Wednesday, 6/17, this episode can be viewed for free on or at

Candy will be appearing in a number of episodes throughout the remainder of the season, so be sure to keep tuning in or logging on each week!

Additionally, any of you on Facebook can join the new Milena Govich Facebook Fan Page (that my wonderful husband lovingly created) by clicking on the following link:

Here, you will be able to receive updates on my current and future appearances--if you're interested, of course!

Again, I hope you are all well and I thank you for being so supportive of my career.   I am truly, truly grateful!

Wednesday, March 4, 2009

Not a Mirage!

This is NOT a mirage! It is a genuine article from the Times! While it's true that it is from 1982, it's a very real reminder of where rates have been and how great they are today! Over the years, this particular article has come in very handy when I've had clients wrestling with decisions dealing with a difference of 5.25% versus 5.375%.  How a 1/8 % difference could possibly matter would be punctuated with a reminder of the  old 18%  rates.
Note that if the rates had "slid" to 17.54%, they were substantially higher just prior to the slide. We all remember (at least those of us who have toiled in this industry for a while), a "stampede" to refinance when the rates dropped to 13.5%. It seemed to us at that time that a natural place for the mortgage rates to be was between 8.5% and 10%. Those heretofore "normal" parameters were twice the rate that can be obtained today. Currently, an applicant for a mortgage with sound credit and a 20% down payment can expect a mortgage in the upper 4's or low 5's percent! One has to wonder if we will ever see these rates again. Add to the equation the fact that prices of properties have dropped dramatically and we find a buying opportunity not seen for a very long time.
                               While it's true that the banks have become more careful in lending and underwriting criteria have become tighter, the loans do get committed and most which are committed do, ultimately close. 
                               Sure, we have to sweat a bit more, but the deals are out there.

Sunday, January 25, 2009

Rental Scams--- BEWARE!

Obviously, much of the focus of my blogs has to do with transactional Real Estate, often referred to as purchases and sales. This particular entry is "off topic" to the extent that it has to do with rentals; more specifically, a new rental scam that I found after a close family member of mine reported to me that he found an apartment in midtown Manhattan in a doorman building for $850 per month.

It's axiomatic that if it seems "too good to be true" it probably is. A rental in midtown for $850? Impossible! Correct!

As we looked into this particular possibility, my "skepticism antenna" went into high alert. I assumed it was some sort of a come-on, but it became much more.
Upon my relative's expressing preliminary interest in the apartment to the owner of the apartment via an online ad reply, the "landlord", who stated that they lived in the UK, replied that they were interested in finding tenants who would be the right fit for their precious condo.
Of course, they needed an "application fee" which, because they were in the UK, needeed to be wired to them.  This would have given them access to a bank account.

Next, it was revealed, that of course after the lucky tenant was selected, a routine credit check would have to be done. This would give them access to social security numbers.

Need I say more? Perfect...almost. I'm sure some have fallen prey to this scam; as a matter of fact, after some "googling" I discovered that these "UK" landlords were more likely from Nigeria where many of the internet scams seem to originate.

I also ran across a simpler type of rental scam where a Manhattan women was recently arrested and accused of offering apartments for $538-$823 per month for one and two bedroom apartments.  Her game was allegedly confined to  $5.00 application fees. Yet, when more than 1000 application fees came in,  she was busted.

Too good to be true?  You bet!


Milena Govich, who we all enjoyed as she co-starred in Law & Order (the mothership)  has now guest starred in another role a bit less serious in some ways:

The USA network series PSYCH which aired first Friday 1/23 at 10:00pm EST/9:00pm CST.  The
episode is called "Earth, Wind, and ...Wait for it" and it will be re-airing
throughout the week in case you missed it on Friday.  As always, check your
local listings, but for night owls in the NYC area it will re-air:

Sunday 1/25 @ 11:00pm
Tuesday 1/27 @ 1:00am

Additionally, starting on Saturday, you can watch the episode online at

Wow!.  Be on the lookout for another one of these little reminders later this
spring when Milena, as the infamous "Candy", the good-hearted hooker, returns to RESCUE ME!

Wednesday, November 26, 2008

Client news update:

Apologies to all for omitting this yesterday:

Rob Perkins, the drummer for Michael Buble, (or is Michael Buble the singer for Rob Perkins?) will be concluding 14 months of touring the world with a concert at Madison Square Garden on December 5th.  They will be filming the concert for an upcoming DVD release.
That's big!!

Here's a gift, courtesy of Debbee May:
And please have a safe Thanksgiving Holiday.

Tuesday, November 25, 2008

Just what kind of bargains are out there?

Everyone is asking the same question: "how low is low?"
Perhaps Thanksgiving is a questionable time to examine the plight of the market, but one person's distress is another's opportunity. As interest rates came down further this week and the various bank bailouts have freed up some lending money, the focus stays on price. NY Magazine recently ran the following article demonstrating the types of bargains that are available. Of course these are only a sampling of what the various boroughs are witnessing, but they are not unique. 
I'd also like to use this forum to wish all  who read this, as well as your loved ones, a very Happy and Healthy Thanksgiving!

New York Magazine's:

Surf the First Wave of Panic-Selling

147 Waverly Place, Apartment 1E Was: $1.995M. Now: 1.499M 
Photographs courtesy of the brokers  

Even in a good year, the fourth quarter often shows a decline in real-estate sales, and this is not looking like a good year. The properties here offer the heftiest markdowns in town by percentage, per the huge database at; check there or on Trulia.comfor more (try searching “price reduced” or “price reduction”).

Gut-renovated one-bedroom walk-up. 
Initial Price: $575,000 
Current Price: $359,000 
Savings: $216,000 (37.6 percent) 
Broker: Louis Rosado, Brown Harris Stevens. 
Why the Discount? “A quick sale,” says Rosado. “That’s the goal.”

Three-bedroom condo with 17-foot ceilings. 
Initial Price: $4.5 million 
Current Price: $3.395 million 
Savings: $1.105 million (24.6 percent) 
Broker: Christopher Rounick, Sotheby’s.

529 EAST 87TH STREET, APT. 4-5W. 
A 2,000-square-foot, four-bedroom, three-bath third-floor walk-up with rooftop rights. 
Initial Price: $2.4 million 
Current Price: $1.499 million 
Savings: $901,000 (37.5 percent) 
Broker: Richard Healy, Halstead. 
Why the Discount? Two offers have disintegrated. “I scratch my head with this one,” says Healy.

A one-bedroom duplex in Harlem.
Initial Price: $1.1 million 
Current Price: $799,000 
Savings: $301,000 (27.4 percent) 
Broker: Jessica and Brian Armstead, the Corcoran Group. 
Why the Discount? The lower level’s “somewhat below grade,” says Jessica, so even if it’s likely to be configured with two bedrooms, it technically has only one.

A classic five in a newly converted Washington Heights prewar. 
Initial Price: $825,000 
Current Price: $599,000 
Savings: $226,000 (27.4 percent) 
Broker: Sandy Edry and Russell Miller, Citi-Habitats. 
Why the Discount? Edry says a previous broker set the first price.

34 EAST 38TH STREET, APT. 1A/2A/3A. 
A 2,100-square-foot townhouse triplex co-op with fourteen-foot ceilings and three fireplaces. 
Initial Price: $1.999 million
Current Price: $1.499 million 
Savings: $500,000 (25 percent) 
Broker: Andrew Kramer, Corcoran. 
Why the Discount? The apartment was in contract after an initial price cut to $1.699 million, but the buyer didn’t pass the co-op board. So it’s back to the drawing board with an even friendlier price, says Kramer.

A 975-square-foot loft with a planted private terrace. 
Initial Price: $1.995 million 
Current Price: $1.499 million 
Savings: $496,000 (24.9 percent) 
Broker: Eric Fleming, Corcoran. 
Why the Discount? The owner bought the space as a bachelor; he’s fallen in love and is “anxious to sell” and move, says Fleming. Moreover, he bought at a great price during the condo conversion, so it’s all gravy anyway.

A fully renovated one-bedroom, one-bath co-op in a pet-friendly building. 
Initial Price: $799,000 
Current Price: $549,000 
Savings: $250,000 (31.3 percent) 
Broker: Dennis McCarthy and Patricia Neinast, Corcoran.

A two-bedroom, two-bath condo. 
Initial Price: $564,400 
Current Price: $399,999 
Savings: $164,401 (29.1 percent) 
Broker: Sharon Burroughs-Clarke, Corcoran. 
Why the Discount? It’s the developer’s first project, and she wants to goose sales in this uncertain market.

A 2,500-square-foot loft. 
Initial Price: $1.3 million 
Current Price: $995,000 
Savings: $305,000 (23.5 percent) 
Broker: Angela Ferrante, Brown Harris Stevens. 
Why the Discount? The owners “need to move on,” says Ferrante.

A 2,800-square-foot, four-story townhouse in the Hunters Point Historic District. 
Initial Price: $1.395 million 
Current Price: $1.195 million 
Savings: $200,000 (14.3 percent) 
Broker: Miles Chapin, Warburg Realty. 
Why the Discount? “A reaction to what’s going on,” says Chapin.

Three-bedroom, two-bath penthouse in the new Novo 64 condos. 
Initial Price: $1.35 million 
Current Price: $1.15 million 
Savings: $200,000 (14.8 percent) 
Broker: Novo 64 Sales Center.

The Bronx 
Four-bedroom 1915 Dutch colonial near the Fieldston School. 
Initial Price: $3 million 
Current Price: $2.395 million 
Savings: $605,000 (20.2 percent) 
Broker: Anne Shahmoon, Halstead. 
Why the Discount? The seller wanted to try aiming high at first, says Shahmoon.

Staten Island
A two-bedroom, two-bath townhouse with attached garage. 
Initial Price: $269,000 
Current Price: $215,920 
Savings: $53,080 (19.7 percent) 
Broker: Joe Fruscione, Fillmore Real Estate. 
Why the Discount? The house is listed as “bank owned”—typically a foreclosure.

Total Savings: $394, 463
(Average discount on all fourteen properties)

Wednesday, October 22, 2008

Tumultous Times

It seems that the two most frequent questions I get lately are:
Bob, so what's your take on the Real Estate market?(as if I would know) and
Bob, when are we going to see a new blog from you?
So, now I get to kill two birds with one stone (apologies to my animal loving friends who know me better).
For the last few years we've wondered when we would see a "correction" in our local Real Estate market. Prices rose at alarming rates fueled by very generous bank appraisals. A typical middle class young couple could no longer afford to buy in most areas of Manhattan or some areas of Brooklyn.
As part of the financial collapse we've witnessed on Wall Street, the long overdue Real Estate "correction" has arrived. Most professionals involved in Real Estate will tell you that if this is "correct", bring back the "incorrect" times. The industry is suffering. Title companies and abstract companies related to them are laying off employees; many bank attorneys are likewise downsizing.

From my perspective and those of my colleagues with whom I've chatted, deals are somewhat fewer, more difficult to bring to contract, more difficult to obtain financing on and more difficult to close.

There is so much "psychology" involved. Potential sellers who might be "trading up" are afraid to commit to a purchase due to the uncertainty of their buyers financing and therefore the tenuous nature of their sale.
Buyers are facing more difficult mortgage hurdles and, where applicable, more difficult coop boards.
Is it all bad???


Within these tumultuous times lie opportunities, especially for buyers (probably why we call it a buyers market, duh). At the height of the market, buyers were at a disadvantage and they knew it. In Manhattan, buyers were often coerced to waive their mortgage contingencies. Citywide, buyers of new Condos were required to pay NY City and NY State transfer taxes (generally paid by the sellers in arms length transactions) as well as sponsor attorney fees and miscellaneous "creation fees".

Recently, I've seen, particularly in new Condos, large price reductions, sponsor paying the above mentioned fees and even "incentives" like sponsor prepaid common charges, free parking spaces, storage etc.

In other words, if a potential buyer is confident that his/her job is secure, just as Warren Buffett is urging people to see the Wall Street free fall as a buying opportunity, a similar logic applies to our Real Estate market.
Prices are lower, interest rates are still very low; in the high "5"s or low "6"s. The lending banks are still interested in granting mortgage applications...they are just much more careful about the process.
Mortgages are available for people who can show W2 income and have 20% deposits available.
Perhaps the clouds do have a silver lining. Lets hope so.

Wednesday, September 24, 2008

No good Real Estate News....So here's some "Client News"

One would have to live in a cave to not know the Real Estate news is not great, yet Brooklyn and Manhattan seem to remain relatively lively as real estate markets are concerned. Clearly the woes of the banks are making financing more problematic, but mortgage money is available for those borrowers who are not on the fringe in terms of deposit amounts and the ability to furnish documentation. the good stuff:

Instead of dwelling on Real Estate (no pun intended), I'm pleased to report on three of my client beauties:

Laura Piquado has just finished her run as Mrs. Stockmann in Ibsen's " An Enemy of The People". I was delighted to attend one of her performances and I can report that Laura's performance, as well as those of her co-stars, was riveting! Next time I'll make sure to report of her appearances well in advance.

Milena Govich, who has starred in NBC's "Law and Order" and "Conviction" before that, as well as many other credits, has a great "gig" coming this fall, but I've been sworn to secrecy for the moment. As soon as I'm allowed, I'll share the details here.

In the meanwhile, Milena is having fun. Please join her for the Grand Opening of the new Donna Distefano Jewelry Atelier.
Donna is an incredibly gifted jewelry designer, and a dear personal friend of hers. She has been a jeweler of the stars for over ten years, and it would be cool to attend the grand opening celebration of her gorgeous new space. Milena tells me she has loved wearing her jewelry both on the red carpet and in her daily life, and it never fails to attract attention. Come be a guest and experience firsthand her genuinely creative artistry.
Wednesday, October 137 West 20th Street, Suite 1106(between 5th and 6th Avenues)New York City6:00pm-9:00pm

Last, but not least, Sarah Blaze is currently in Reno, Nevada in rehearsals for "The Barber of Seville" where she lights up the stage as Rosina in this production staged by the Nevada Opera. For those few fortunate souls who may be in Reno in early October, these are the details:
Gioachinno Rossini's
The Barber of Seville
Friday, October 3, 2008 - 7:30 pm
Sunday, October 5, 2008 - 2 pm
"Figaro! Figaro! Figaro!"
Performed at the Pioneer Center for the Performing Arts
Sung in Italian with English Supertitles
Gioacchino Rossini's The Barber of Seville has been hailed as a masterpiece of comedy ever since its premiere. When the bumbling Doctor Bartolo schemes to marry Rosina, Figaro (the barber of Seville) steps in to save the day and insure that her true love, the handsome Count Almaviva, gets her instead! The beautiful and dynamic Sarah Blaze (our Cinderella from 2007) returns as Rosina; Mark Walters (our fiery Pirate King from 2007) brings Figaro to vibrant life; and Joseph Muir (last heard at Nevada Opera in La Traviata in 2001) makes a long-awaited comeback as Count Almaviva.
I'll make it a point to notify everyone when Sarah next performs in a venue closer to our fair city.