New York Values #59 - Fear Mongering in Email Form

First things first: this is not meant as an attack on a specific brokerage, nor an exoneration of the agent that brokerage fired. I’m intentionally not naming names here, as it doesn’t matter; it could be any company. Instead, this is an exploration into why said agent felt justified sending the email he did, and how firing this one person and saying “this is not acceptable and we won’t stand for it” completely misses the point. While this one agent “crossed the line,” all brokerages have agents guilty of the same tactics, tactics often encouraged by the brokerage itself. 

So what happened? Last week, an agent in South Florida sent an email blast that showed pictures of cars on fire in NYC next to pictures of Miami beaches with the headline “Looking for change?” and asking whether viewers wanted to live in chaos or comfort. It led to the agent being exited from the company, whether because the press picked it up or because it was brought to the attention to senior management via complaints I’m not sure. 

But while this was the only example that drew national attention, resulting in the agent being removed from his company, this is happening on a very regular basis and has been the entire course of COVID. While hundreds of New Yorkers were dying from COVID every day, while friends were working in Bronx ER’s coding patient after patient in grueling shifts, while we huddled in our apartments hearing near-constant sirens replace the sounds of normal traffic, I received daily emails from strangers in the real estate community offering incentives if I sent them my “clients fleeing from NYC.” I saw tone-deaf Instagram posts from agents in towns like East Hampton and Aspen about how much better it would be to be quarantined there than in whatever shithole apartment you were currently subjected to, a message I found just as elitist and out of touch as the broker blast that got this agent fired. And while not directly racist (racism being the reason listed for the earlier agent’s dismissal), the subtext here is clear: you and your life will be better and less full of stress if you can afford to live in these elite, generally all-white “resort” areas. You shouldn’t declare loyalty to a place you live

Again, I’m not going to defend this agent’s choices. The email he sent was inappropriate. But I’m also not going to drag him through the dirt when I have seen tons of other agents behave essentially the same way, not be called out, and continue to act as they always have. I’ve written about this before, but because this industry has a low barrier of entry and fierce competition for business (since a low barrier of entry means an over-saturation of agents), we are pushed to market ourselves aggressively. And sometimes this marketing is poorly thought out, offensive, and/or factually wrong. Like cops, we are dealing with complex subject matter we may not be entirely educated about. We are told to know everything about the specific market where we work (to impress rich buyers), the habits of rich buyers, and money (to talk to rich buyers). That’s pretty much it. 

Agents are actively told to ignore current events, as the news will bring them down and get them out of work flow. They’re largely white, older, and rich, so they can feel secure in the knowledge the news doesn’t generally affect them, unless it’s about their retirement funds. They’re being told that mass email is an effective tool and that they need to be on social media getting in front of a new generation of wealth. And while this true, if you don’t know what’s going on (because you don’t read the news and you fled to your country house as soon as things looked bad) you should not be advertising on social media right now. There was even an instance of agents sharing support of the protests with both #blacklivesmatter and #alllivesmatter beneath it, completely unaware of the meaning of what they were saying.

While one agent has lost his job and damaged his reputation over an email, the systems that led to this email blast going out are still firmly in place. And now all the big real estate companies and agents can sit back in their collective smugness, thinking “this has nothing to do with me” before sending out another mass email to thousands of agents they don’t know, clogging inboxes, interfering with work, and offering to help my clients relocate to a “better” place than NYC. Because if you have money (and remember, agents are often taught only to care about people with money), why on earth would you want to stay in NYC rather than a beach house or in Aspen? Loyalty to a place is for the have-nots, not the haves. And the have-nots don’t buy houses.

xo

Anna

New York Values #58 - Floor Plans and Online Listings

This is design month so each week I’m going to focus in a little more on the process of purchasing/designing an apartment. This week we are starting with the basics: online listings and floor plans, because online listings are where you start your search and floor plans are the most base level when evaluating a purchase. Why? Because photos lie but floor plans tell you the size, shape, and other things you cannot change. 

I love floor plans. They are the best thing. While listing photos can be edited into oblivion, virtually staged, or simply inaccurate, a  good floor plan gives you actual data. They are also part of the first line of attack when looking at a new listing and evaluating whether you want to see it in person. A note to prospective tenants: unless you are looking at a luxury price point, you are not going to get square footage and a floor plan. I love it when rentals have floorpans, but I understand that it isn’t usually cost-effective to do them. For sales, however, it is imperative. 

Listing agents on sales have, for the most part, stepped up their game even since I started real estate in 2018. You see fewer and fewer listings with wonky iPhone photos and incoherent descriptions, and far more with beautiful photography. But sometimes an agent is too complacent, happy to do a sub-par job because “someone will buy it.” It’s lazy and brings down the industry as a whole, but it’s also a source of opportunity if you’re a buyer looking for a “sick deal.” If something is poorly marketed it’s not going to get as high a price as if it were done well. 

But back to listings/floor plans. As a seller, what should I expect from my agent and as a consumer, what should I be looking at when I’m viewing a listing? An expert will be able to most quickly and thoroughly gauge an apartment (I do this day in and day out), but here are some helpful tips for both sides. 

---

You Need A Floorplan

Period. End of story. If a listing doesn’t have a floor plan I wonder what is wrong with the agent, or I assume there was a technology issue when they were uploading photos. If an agent didn’t have someone come in and do the floor plan, they are legitimately not doing a good job. I can’t think of a single reason or excuse. 

Floor plans are also the first thing you should review as a consumer. A floor plan won’t tell you which walls are load bearing vs which ones can be moved, but it can let you know whether the bedroom is actually legal (must be 10x10 ft and have a window) or if there’s a second bedroom at all (because people will market a studio as a one bed if you could, in theory, put up a wall). It will show you where the windows are and what direction they face. It should include dimensions (but even if it doesn’t it will give you a rough idea of the space). It will show if there’s actually private outdoor space or if the agent just checked the wrong box uploading the listing. And it will give you a feel for the layout, flow, and general design of an apartment.

You Need Square Footage

Co-ops, or co-operatives, sell purchasers shares in the company/building rather than real property. There are a few ramifications there, but for the sake of floor plans the big one is that they do not have official square footage. 

But as a seller/listing agent you should still be working with a photographer and someone who will do a floor plan and give you the square footage. Some agents will be cagey about it and refuse to give an estimate, but so much time is wasted when an agent’s response is “Co-ops don’t have square footage” and then the second we walk in my clients decide it’s too small. Sellers, if your agent doesn’t have estimated square footage that’s a bad sign.

Buyers, if a listing doesn’t have square footage on it and it’s a condo or townhouse, an agent really dropped the ball. If it’s a co-op it in all likelihood won’t say the square footage, but ask your agent to reach out and check. A good seller’s agent will give an estimate, and if he/she won’t? Well then you have a pretty good idea how communication throughout the deal will go.

You Need Accurate (If Enhanced) Photos, With Disclaimers if Needed

Photography in real estate is inherently misleading; it’s impossible to truly capture a 3D space in a 2D photo. You won’t be able to show a place from every angle, accurately capture the light at every hour of the day, and make sure the size is totally clear from these few images. But there is a point at which it goes from just the reality of life to an actively misleading, when you’re changing views rather than just lightening photos. Don’t do this. It will just make people sad when they arrive and see the real thing (like face-tuning your dating app pics).

There is also the issue of virtual staging, where you are actively changing the reality of a space to add furniture, change wall coverings, add new fixtures, etc. If you are virtually staging a photo you MUST include that information, ideally on the photo itself but at the very least in the description. And it is also good to put the un-edited photos in the listing as well. It makes total sense that if you’re selling a gut or an estate that you’d want to give buyers an idea of the possibilities. But you also want to make sure the reality is clear. Much like with square footage, why waste everyone’s time and disappoint someone when they walk in? Be up front about the condition of the apartment.

You Need Monthly Costs

As a seller, you should know your monthly tax burden and whatever fees are being paid to the building. You should also be aware of any assessments on the building and when they end, same with tax abatements. All of this information is important to perspective buyers, and your agent should ask you for it. If your agent doesn’t ask and isn’t putting this on the listing, this is another red flag. It’s especially important in townhouses, where taxes vary a ton even for similarly priced and sized homes.

As a buyer, your “new rent” or your monthly cost of purchasing (fees to the building, real estate taxes, and mortgage payments) is a huge consideration when figuring out what you can afford.

---

What’s the New York Value here? That NYC real estate is held to a higher standard than most of the US so overall its listings are high quality. If you’re spending a million dollars on something you probably aren’t . It also means that the listing agents

New York Values #57 - Inclusivity Will Save Us

Real estate likes to brag about how it’s an industry full of female entrepreneurs, where a single mom can work a flexible(ish) schedule and earn enough to raise her kids, an industry where the “glass ceiling” and “70 cents earned per dollar a man earns” don’t exist. The single mom narrative is the true story behind our CEO’s interest in real estate: his mother supported them by working full time as an agent, and she is still an active broker at Compass today #adorable. But while a lot of women enter the profession, at the top it is, like most industries, largely white men. Joe and Kelly is a rare male-female 50/50 split partnership, and as I’ve said before, part of my immediate desire to work with them was this equal divide. There are a handful of female-run teams that do major business. But if we are looking at ALL the top agents in the city, it’s overwhelmingly male dominated. 

I don’t watch Million Dollar Listing (starting to think I should), but I was still happy about the news that their newest cast member is a female agent, from Compass no less. The press failed to mention that her team is run by two white men, but I am still happy about the addition of a woman, even if it seems a little bit late — how many seasons have they done already? — and even if this isn’t exactly pushing the boundaries of what a luxury real estate agent can be. And lest we forget, the reason I don’t watch the show is because the first episode seemed to focus around one of the stars sexually harassing his assistant by making her listen to stories of his gross hookup exploits. But hey, it was a different time! We hadn’t even decided women were MAYBE people back then!

It may seem like a small thing, but inclusivity and representation in the media is actually super important, because we internalize what we see portrayed on TV and in print. If you only see male agents of a certain age in the luxury market, you start to believe that they’re the only ones capable of that type of business or operating in that space. And nothing could be further from the truth: even within the “white men” category, I know plenty of Compass agents who do insane business without being traditional and buttoned up. Which brings me to my first point: I love Compass’s inclusivity that allows for all of us to choose our own way of marketing and presenting ourselves.

I know, I’m a huge fangirl, but this is yet another in a long line of reasons that I love Compass and wouldn’t want to work anywhere else. Compass makes a HUGE deal of its culture, but the difference between its definition of culture and some other places I interviewed is that at Compass, culture means following a code of ethics/behavior, not looking a certain way. I certainly don’t look how most would expect from a real estate agent (at least if we are talking about how I dress and my marketing). Compass agents run the gamut and truly exemplify how the brokerage community actually looks. Real estate is, for many, a third or fourth career, and the defining common ground is the desire to run one’s own business, not a specific background or path or place that we grew up. But I am constantly “small-timed” by (mostly male) agents who don’t take me seriously because I’m not wearing a skirt or heels, don’t wear makeup, etc. And the answer to that problem shouldn’t be “well, Anna, you should start dressing the way they want you to!” The answer should be to try hard to eliminate these biases at the base level, so that I don’t get judged based on someone’s idea of how I SHOULD look. 

But this isn’t really about Million Dollar Listing, or Compass, or even real estate. It’s about the fact that in 2020 we still have an internalized bias to trust white men with money over other people, to give them the benefit of the doubt, to naturally assume that they make strong leaders, even when the opposite is proven true. No, I’m not talking about Trump, although the presidential race is a perfect example of this. I’m really talking about Governor Cuomo, the unhinged narcissist who at every opportunity manages to fuck up our city for everyone, on both sides. I’ll just use three quick examples here. 

• Andy Byford - Andy Byford, or “train daddy,” is a British transit nerd who has overhauled multiple huge subway systems, bringing them from the depths of malfunctioning into the 21st century. After massive successes in London, Sydney, and Toronto he set his sights on NYC. Cuomo hired him, and Cuomo could have been satisfied with patting himself on the back, loudly and publicly, for bringing in the man who could save our city. Fixing the trains would increase rents and real estate value across the board, decrease physical violence on train platforms, and generally help EVERYONE, not just those who depend on the subway for their commutes. Instead, with every piece of press Byford got, Cuomo became more and more enraged until he finally wasted $4million of tax payer money bringing in his own SECOND consultant to essentially eliminate Byford’s position and make him powerless to do his job. Thanks, Cuomo. You’re the actual worst.

• New Rent Laws - I don’t know if anyone was paying attention, but about 48 hours before the new rent laws passed in Albany and were sent to Cuomo for his signature, he called them out for infighting and speculated that legislators wouldn’t be able to come to an agreement and pass anything. If you know anything about human psychology you know that the fastest way to unite people is around a common enemy or what was basically a dare by Cuomo. So lo and behold, MASSIVE rent reform was agreed upon and sent his way shortly thereafter. Maybe they would have stopped arguing and gotten this done regardless, but he certainly didn’t help matters for himself since he opposed this reform so vehemently. 

• Amazon H2 - This was a stupid idea from the beginning, no matter how many agents whine to me about property values in LIC. LIC is doing fine, and stop trying to tell me this would be bringing jobs to a needy community. The jobs wouldn’t be for LIC public housing residents (seriously, who does your PR?), we don’t need more tech bros, and we don’t need any tax cuts for Amazon. We don’t need more train issues. We don’t need more renters. And, as I speculated, Amazon is moving tons of its employees here anyway. But regardless of whether you wanted H2 or not, you can blame Cuomo for how this all went down. Apparently he’s as bad at negotiating deals as Trump is, because if he had done a better job we opponents probably would have had H2 shoved down our throats. Instead the deal was so pathetically bad, and was put together in such a non-transparent, shady way, that the city came together to stop it. 

While I have you, I’m going to throw in one more issue with “white male” as default for all positions of power and authority: it’s bad for those white men, too! This is why TAKING DOWN THE PATRIARCHY is actually better for everyone; it allows more than one definition of maleness, correctness, power, etc. And if you haven’t noticed, white middle aged men in this country are taking their own lives at an alarming rate. There are MANY, many reasons for this, but a significant one is that what they were promised as kids does not mesh with where they now find themselves. They were promised certain things would be theirs, and that these things defined their role as a man (wife, house, kids, ability to provide, tallness, money). But things have changed, and they were not trained to live in a world where they had to compete with everyone else. 

But I was. I am tougher, smarter, and savvier because of what I’ve gone through as a woman. I am better at my job, more personable, and my clients are DIE HARD obsessed with me. As an aside, I’d also love to stop hearing that women are “too emotional” for things from men screaming and crying over the slightest inconvenience. We are magical humans and you can barely handle life with every single thing being handed to you. 

And so in the end, I kinda win, and the losers are sad white dudes and people who weren’t able to end up in the (admittedly extremely privileged) position I’m in, where I actually do get to prove myself. By making the playing field more even and showing that ANYONE can be president, successful, important, smart, valuable, etc, we will literally make the world better. People who never had a chance to compete before will be given an opportunity to rise to the top and do AMAZING THINGS. Anyone who disagrees is small minded and believes in a zero-sum game rather than having a growth mindset. Maybe you should go back to the early ‘80’s and hang with Cuomo’s dad.

And maybe we’d have fewer Cuomos, fewer Trumps, and fewer headlines like this: https://therealdeal.com/2020/02/04/amazon-insiders-hq2-campaign-driven-by-bezos-ego-subsidy-envy/?utm_source=Sailthru&utm_medium=email&utm_campaign=NY%20Daily%20%7C%2002.05.20&utm_term=New%20York%20Daily

xo

Anna

New York Values #56 - Staged to Sell Home

Meet Jason Saft, owner of Staged to Sell Home, and a f*cking real estate treasure.

I’m legitimately having trouble writing today because I decided having long, pretty nails was a good idea, and it isn’t. So I’m going to keep this short (for me) and illustrate with photos instead. Which is great, because today we are talking about staging! And in the world of staging, Jason Saft is king. Not only does he stage his own properties, but he partners with agents to help them sell theirs. Joe and Kelly have brought him in on multiple listings and although I haven’t needed his services yet, I’ve definitely gone to him for advice and learned a ton just from listening to his talks and panel discussions. Also his Instagram is upsettingly inspirational/funny/good/sweet, all things we need more of in 2020.

So what is staging? Staging is furnishing and decorating an apartment to highlight its positives and downplay its negatives. The goal is to show a potential buyer how their belongings can work in the space, maybe feel aspirational, and help them imagine living there. Since buying is such an emotional process, making the buyer connect in this way helps you sell faster and at a higher price, without actually changing the apartment itself (aside from minor cosmetic tweaks like peel-and-stick wallpaper).

I’ve lost a listing before because I insisted on staging, and the sellers didn’t want to pay for it, even using Compass Concierge up front. It’s completely my fault because it means I didn’t effectively illustrate the difference that staging can make in a home. So I figured showing actual before and after pictures and running through real world examples of how it helped properties sell would be the most effective way to explain.

As an aside, I have been advising buyers that the real VALUE they can find right now is poorly marketed, unstaged properties with low-quality photos. Because I think we are in the last year or two of this being a thing. I’ve seen firsthand how some minor changes and better photography helped a seller of mine earn significantly more than she expected, because when she bought the apartment the paint was old, the photos were just ok, and the furniture wasn’t thought out. We staged, painted, and got it press, and within 8 days of showing had multiple offers over ask (even after pricing it HIGHER than the seller thought we could get). It makes a difference.

If you are ever tempted to think that staging doesn’t matter, just take a look below at some of Jason’s work and how he was able to sell properties that had been sitting for AGES pre-staging. It’s hard to argue with the facts. (Oh, and this should also show you why working with a PROFESSIONAL is key. I could not make your home look like he can, and you can’t either.)

---

208 West 11th Street - Townhouse

Before: 3.5 years on and off the market. No offers.

After: Multiple offers. Officially sold & closed. 

Exclusively listed:  Jason Saft 

---

23 East 10th - Apt 418

Before: 5 months on market. 

After: 5 weeks on market. 
Officially sold & closed - All cash.  

Exclusively listed: The Spiegelman Rothman Team

---

102 East 22nd Street - Apt 1EF

Before: 3.5 years on and off the market with other agents/firms. 

After: Relisted with Compass. In contract within 6 weeks.

Exclusively listed: Laurie Gilmore

---

34 Gramercy Park East - Apt 3BR

Before: 6 months on market. Previously listed with another agent & firm. 

After: Relisted with Compass.  Less than 30 days on market. Officially sold & closed at full ask. 

Exclusively listed: Lynne Lerner & Dogan Baruh

---

125 West 12th Street - Apt 1F

Before: On & off the market for 1.5 years.

After: Refreshed & Relisted. In contract within 2 weeks of being relaunched. 

Exclusively listed: Shari Matluck & Susan Greene

---

Want more of Jason’s before and after photos? Check them out here. Also let’s take a moment of appreciation for his assistant, Tanner (pictured below), who is a wizard with a sewing machine and is responsible for making pretty much all the pillows. Also just look at him. He is perfect. They both are. Now hit me up about listing your place and LET’S GET STAGING!

xo

Anna

New York Values #54: Co-op Board Rejections

Co-ops are a huge part of NYC’s real estate market, despite the fact that anything being built today is a condo. I’ve explained the differences in property types, mentioned how the unique mechanisms for approving buyers help keep the city’s real estate market stable, and outlined the process for purchasing one. But today I want to talk about one of the downsides of co-op purchasing, something that has become more common over the past two years in a challenging sales market: board rejections. 

---

The Good

There is a reason that co-op boards have a right to reject someone for nearly any reason (minus racism/sexism/ageism/etc).  When you buy into a building with other people you are buying into a community, and they want to . If you are extremely mean during the application process when you should be on your best behavior, they will probably imagine you’re only going to get worse once you move in. If you claim not to smoke and it’s a non-smoking building, but you show up at the interview reeking of cigarettes, you may not be the right fit. Yes, sometimes this turns sour with board members making a business decision too personal, but sometimes it’s for the benefit of all parties involved.

They also want to make sure that you are financially qualified. Bank lending standards vary wildly, even since the crackdown in sub-prime mortgages after the ’08 crisis. And the seller may not care that a buyer would only have $10 left over after closing. But allowing someone who can’t really afford to buy purchase a home puts the building at risk. This is a problem in condos that causes the apartments to go up and down in value whereas co-ops tend to fluctuate less. 

The last positive rejection reason is to protect the building. If too many units in a building are owned by the same person or company, or if too many are rented out at one time, it can cause issues with banks’ ability to finance a building. Meaning you could be going to sell and the buyer can’t get a mortgage. And nothing drops the value of a home faster than it needing to be a cash deal. Yes, there are cash buyers, but any time you limit your buyer pool you are taking money out of your own pocket. 

The Bad

Boards are made of human beings, meaning they are fallible and sometimes make poor choices. There are two common and incredibly stupid reasons that these boards reject buyers. I’m sure there are others, but these have come up a lot over the past couple years. 

The first is a rejection because the buyer has “too much money” to purchase a home. This is usually because one person on the board, often who was a holdover tenant from when the co-op was still formed, or someone who bought decades ago for 45 cents and a cow, and thinks that the building needs to retain . It’s a bias against wealthy people that is often also bias against millennials. Sorry, guys, millennials with trust funds are the ones who can buy right now. It’s not their fault that they have money, and they aren’t inherently evil or lazy because they do. If they are buy8ing in a co-op that means they DO have their own source of income, so why don’t you welcome this influx of money rather than listen to the chip on your shoulder?

The second, which was INCREDIBLY common in 2019, is a rejection because the board doesn’t like the price. Since about 2015 the market has been in a correction, meaning that while it was going up and up each year from about ’08-’15, prices have been dropping since. In 2018 no one seemed to buy anything because sellers and buyers were so far apart with what each wanted. So then in 2019 sellers became more realistic and were able to meet buyers in the middle. 

The Ugly

Co-op boards are allowed to reject someone for ANY reason, as long as it isn’t against fair housing laws. But again, boards are human. And it’s not like these people have taken legal training to be on a board. They just happened to own in the building. That’s the only qualification. So here are some real examples of completely bullshit reasons that shouldn’t be tolerated, but sometimes are.

The first example is a couple purchasing in a co-op where she mentioned in her letter to the board how excited she was to raise her baby in the new apartment. The board rejected her and the seller was told this was because the board decided she would probably stop working soon and they wouldn’t be able to afford a nanny or appropriate help on just the husband’s salary. This is speculative, sexist, and disgusting. 

The second example is a co-op that has decided it wants to keep the “cultural integrity” of the building, i.e. only accept buyers of a certain race or nationality. It’s not always white; this can be a reaction to gentrification as well, where a building tries to keep “too many” white people from moving to an area. This is clearly racist and illegal, no matter the perpetrators. 

The last example is ageism, where someone on the board doesn’t trust the new buyer at his/her word because of age. Yes, I’m a 35 year old professional, but that doesn’t mean I’m going to Airbnb this apartment! Yes, my money came from legal activities; I showed you all my documents and tax returns. Yes, I plan on living here and being part o the community. No, I’m not flighty and irresponsible just because I’m younger than you. There are few things more frustrating than following the rules and doing everything right only to be told by someone that you’re clearly lying and actually breaking the law. Again, this isn’t legal, and it shouldn’t be tolerated. 

---

So overall, I love co-ops. Not every co-op is for everyone, and you need to shop around to find the size, amenity level, and vibe that works for you. Really, the only reason to avoid co-ops is if you want to buy the property to rent out for passive income. If you want to live there, it’s an amazing way to buy into a stable community and pay far lower closing costs/75 cents on the dollar compared to a condo.

And I think as co-op boards are slowly dragged into the 21st century, the process will just become less painful. As much as they fight it, we need oversight to make sure that racism, sexism, ageism, and other illegal reasons for turning someone away are eliminated. Because right now it’s just another example of the smallest amount of power potentially turning someone from a homeowner into a control freak who wants to keep anyone he doesn’t like out of the building.

If you do buy in a co-op, I also highly recommend you get on the board. Because if you’re reading this, you’re clearly better educated about real estate than most of the public, and will ideally be good at following all the laws. They exist for a good reason!

xo

Anna

New York Values #53: The 2020's and Personal v. Institutional Responsibility

Happy 2020! There’s a lot going on right now, much of it concerning and part of a greater pattern. As our narcissistic president risks nuclear war in an attempt to distract from his crimes, fires spanning nearly the size of the continental US ravage Australia, showing us what could happen in California as early as next year. And the US government decided to spent $2 trillion it doesn’t have on more guns, pumping money into companies like Lockheed Martin rather than into its own struggling citizens. All this after yet another round of tax breaks that failed to stimulate the economy and simply made billionaires more billions while putting the country ever-further into debt. But people are finally catching onto these patterns and saying, “enough with the bullshit. Stop lying to us and stealing our futures. Do better.” This is the decade that, hopefully, we do what we would have done in 2000 if Jeb hadn’t handed his brother the presidency.

And if reading this makes you roll your eyes and go “what a liberal,” I’m actually in good (conservative) company with this outlook. I read Merrill Lynch’s 2020’s predictions because I care about global economic trends even if I think a lot of the minutia is uninteresting. There’s a lot in there, but here are the two paragraphs that stuck with me, as they are such a departure from the way financial institutions were talking a few years ago.

“That still leaves hundreds of millions of people facing problems such as hunger, poverty, inadequate housing, and lack of access to clean water and health care. And the entire world is grappling with climate change and other environmental issues requiring concerted action. “If the 2010s was when fears over climate change peaked, this has got to be the decade of climate change solutions,” says Michael Hartnett, Chief Investment Strategist for BofA Global Research. “Fortunately, whatever combination of renewable energies, new technology and political will that takes, history tells us that people are good at finding solutions to the biggest problems.” 

One force helping drive those solutions is a broad rethinking of capitalism. A new “moral capitalism” calls on companies to expand their missions beyond profits and shareholder interest to include supporting their communities, addressing climate change and the environment, and making their workplaces more inclusive, among other changes.”

The 2010’s were all about personal accountability. Don’t worry, guys, there’s still upward mobility! (There isn’t). You should definitely go to college and take out all those loans because you’ll totally get a job after! (You shouldn’t necessarily, and the jobs weren’t there). Climate change is fake; don’t tell me how to run my business! (It isn’t) Reduce, reuse, recycle! It’s on YOU to save the earth! (We can’t make a dent when companies/industries won’t change their ways) Would you like to add $3 to your CVS purchase to help families in need? (YOU fucking donate it, CVS! I’m buying off-brand Advil because I can’t afford health insurance. Don’t ask me to donate.)

Because the world used to be different, people believed (and many boomers/isolated people still think) that if you were without housing/income/healthcare it was due to your making poor choices, being addicted to drugs, etc. Leaving aside that addiction is a disease and pharmaceutical companies intentionally got people addicted to opiates, this just isn’t the world we live in anymore. The zip code where you were born is the biggest predictor of your lifetime income; there is no job security; there are no pensions or healthcare. And oh, by the way, many millennials will also need to support their parents whose finances were decimated by the ’08 financial crisis and never recovered. Parents who will live longer than any prior generation, with more chronic health problems. And entire cities are drowning, burning, or becoming less and less livable 

Unchecked capitalism is really good at solving the problems it has created by finding new ways to make money off the new problems. It’s often really bad at actually solving the problems (this is where I kind of disagree with the ML report, but only by degrees). And now these problems aren’t just superficial; we are facing possible extinction. Which is a strong word, but it’s true. 

So are you feeling inspired to enter this new decade? Because, honestly, I am. For the first time I’m seeing religious 70 year olds and activist 20 year olds on the same team. I’m seeing a reaction to Trump’s bullshit that shows people are becoming savvier at seeing what is going on through the spin. 

Happy 2020, guys. Welcome to a decade where empathy and social contract theory combine with capitalism to create something truly American that actually helps all of us. And libertarians can go fuck themselves. 

xo

Anna

New York Values #52: Participation Trophies Didn’t Ruin Millennials

This morning in our sales meeting there was a discussion of the different generations of clients and how they communicate/engage with real estate. But it reminded me of something I started writing a year ago. So here we go: a New York Value about participation trophies, millennial homebuyers, and the future of NYC real estate/capitalism/etc. Enjoy? 

The idea of participation trophies making us a weak, entitled and self-absorbed generation is false. And it’s played out as a talking point. What I will concede is that we were also the generation of some parents giving their children presents at OTHER children’s birthday parties, because it wouldn’t be fair for the birthday boy to be the center of attention. And that was insane, wrong, and worth pointing out as an issue. Growing up with parents who did that would mess up any child and turn him into a “special snowflake” entitled type (but guess what generation those parents were from — they weren’t millennials). 

Participation trophies, though? I think those were solidly fine, again, unless a parent (*cough* a BOOMER *cough*) framed it incorrectly and told the child he deserved the world just for showing up. I was a kid who played four sports a year, and at the end of many seasons everyone got something for participating — not the same trophy as the league winner, but something small. And it didn’t turn me into an entitled brat. Instead it instilled in me the importance of showing up and being part of a greater whole, even if that whole didn’t end up winning the entire league.

(This does legitimately tie into millennial behavior around purchasing, including home buying, so bear with me just a little longer!)

Older generations progressively earned more than the generation prior, getting new opportunity, generally thriving, not saddled by student loans and the imminent collapse of our ecosystem and democracy (ayyyyyyyyy 2020!). And because this was the world they lived in, they believed that society was an even playing field where working super hard would get you to the top. “Winner take all” mentality was synonymous with the American dream. And they taught this to their children, the millennials.

But then things changed. These same people who had been afforded great social and economic mobility cut off the ladders they climbed, and we currently have the largest wealth gap in a century. My generation has come of age with rising global temperates, mortality rates, and costs of living while salaries and employee protections have decreased. Oh, and corporations have more rights than people. And our voices are ignored, with grievances dismissed due to our age. It has eroded trust in employers, the government, and financial institutions and turned us into a generation of renters, both by choice (see lack of trust) and because of financial instability (see student loans, increased living/healthcare costs, decreased salaries/401k’s/no more pensions). 

I’m not a socialist, and although a substantial chunk of us are (and you really only have yourselves to blame here, Bezos and others who are clearly, definitely reading this), most of us just believe in what’s being called “compassionate capitalism.” Put simply, I don’t believe in a ceiling, but I do believe in a floor. Because it has become obvious what happens if everyone is fighting for the one championship trophy and no one else gets anything — we seek profits at any cost, and reward those who make the most money, regardless of how many people they hurt along the way. And when eventually the pendulum swings just as far the other direction, these same robber barons (they really are) will cry “boo hoo” and not recognize that if they just acted slightly less selfishly (like just pay taxes, not even crazy taxes, just pay your taxes) this wouldn’t have happened. It’s like the new rent laws that passed this year; they were the result of certain landlords abusing power and breaking the law without consequence, landlords now crying crocodile tears about how they’ll never earn money again and threatening to hurt tenants to get their way.

So let’s go back to participation trophies. These are basically a recognition that being part of a team and doing something for the group is inherently valuable. The message is only distorted when viewed through the lens of the INDIVIDUAL being the most important. But that was 100% never the message I got from a participation trophy, maybe because I was raised my whole life believing in social contract theory and the need for collaboration to survive as a species (damn, I love my family). I still tried to win, but losing wasn’t the worst thing in the entire world, and I wouldn’t cheat or hurt anyone in order to get to the top.

I would argue that this same idea of the whole being greater than the sum of its parts is part of Compass’s obsession with collaborating without ego. If we were a brokerage of individuals only looking out for ourselves, we wouldn’t have the culture we have and we wouldn’t attract other agents who want to be part of something I think is special. I certainly wouldn’t have the knowledge I have today, and I probably would be less open with sharing than I am. Being part of something bigger than yourself is good for you and helps build empathy and grow as a human being. No man is an island, but millennials seem to be the first generation to really recognize that.

I know this is kind of esoteric and all over the place, but I think many people misunderstand what’s going on with millennials. And I think this world view, of participation being inherently valuable and winner-take-all as a failed philosophy, is important to understand if you want to work with us in something like real estate. I don’t know that people in my generation will ever be interested in buying Michael Dell’s 200+ million dollar penthouse. Not because there’s anything wrong with us, but because only a very tiny fraction of us will ever get that level of wealth, and those who do probably don’t want to spend it all on one luxury apartment. And, for the record, most of those who could afford it will be people who grew up wealthy. 78% of my generation’s wealth is controlled by 10% of us, so maybe they already inherited a place and want to spend ALL their money on buying fancy cars/clothes/vacations so they can be an “influencer” (hey, I didn’t say my generation was perfect).

So maybe, just maybe, instead of making fun of us for our participation trophies, the developers complaining that no one will buy their product should champion causes that help us thrive (like healthcare) so more people can afford the apartments. Maybe instead of calling me a socialist fiscal conservatives could acknowledge that we could all pay lower tax rates if people stopped hiding their money (illegally) outside the US rather than paying their fair share. And maybe if we all focused on reducing TRULY wasteful government spending, we could fix the government instead of calling it inherently evil. Because, you know, we’re all participants in this thing called America and I, for one, would like a trophy. Ideally in the form of healthcare, because I haven’t been to the doctor since Thailand in 2017. (Do we think I’m dying?)

xo

Anna

New York Values #51: NYC Has No MLS

Normal US markets (as in not NYC) have an MLS or “multiple listing service,” where all agents are required to put their listings into a standardized format on a searchable database. This means everyone is trained on the same system and there is one place to find all the real sales data in a market, which is great. You can run searches knowing you will get all the data minus “off market” and some “by owner” homes. Seems important, right?

It is, but NYC has none of that shit. For many moons, there was absolutely no centralized system, and agents had to actively share their listings with other brokerages. But only if they wanted to do so, as it wasn’t required. Or so I’m told; I was a child at the time. But now, we have an “RLS” run by the Real Estate Board of New York (REBNY), but brokerages need to opt in and be “REBNY members” to have their listings included. And plenty of brokerages are not. 

The lack of one, centralized listing service is part of why an aggregator can be so powerful here. Because REBNY and non-REBNY brokerages alike were happy to put their information on a site like StreetEasy back before Zillow bought it and turned it into the cesspool of lies it is now (#fuckzillow). But then Zillow started introducing all these new, horrible programs, and charging agents exorbitant fees. As Zillow is NOT a brokerage, in some states it has access to MLS data and in some it doesn’t. In NYC it doesn’t have access to shit; agents need to post their listings on the site individually, which means that as they piss off brokerage after brokerage their inventory is starting to slip. Which is why they pump SOOOOOO much money into intentionally misleading marketing telling people that agents are trash and they should just go directly to StreetEasy for all their real estate needs. #liesandthelyingliarswhotellthem

Thankfully, now Compass search is THE MOST ACCURATE LISTING SOURCE in NYC, because it’s pulling from as many feeds as possible, including the RLS (for current listings of all REBNY members), ACRIS (for official sold data), and, since we have over 2,000 agents in the city making us the largest independent brokerage, it has all Compass coming soon listings which are, by definition, not on aggregators. 

But pulling from all these different sources means that there are occasionally duplicates, so our search has taken longer to become as accurate as it needed to be (we’re caught up now) because of the amount of back-end work our engineers had to do to avoid these duplicate listings. And the fact that Compass’s engineers have had to deal with this is kind of ridiculous. It would make much more sense for everyone, consumers and agents alike, if we had an MLS. 

I recently had the privilege of being invited to join NYRAC, or New York Residential Agent Continuum, which for two years has been working to fill a need for residential agent organizing, education, and lobbying. Or, rather, I’ve been invited to their new mentorship “plus” program, because I’m not a top agent in NYC with over a decade of experience. I’m a “child with promise.” The organization has many aims I’m hyped about, and pushing for a centralized MLS is one of them. 

So for those of you who work in different markets and have an MLS: congratulations. Please send words of encouragement and chocolate to your NYC peers. 

xo

Anna 

New York Values #50 - Compass, NYC, and the Future of Real Estate

NYC has always been, and hopefully will remain (if the powers that be continue to check each other against leaning too far in one direction) the epicenter of American business and innovation. Silicon Valley has tech, DC has the government, and Boston has…graduate degrees and healthcare? But these are all individual industries.

So it makes sense that NYC would be the birthplace of change in the real estate industry as well. 

We have reached a point in Western society, capitalism, technology, whatever you want to call it, where single platforms are dominating entire industries. Google owns search. Amazon owns online retail. Airbnb owns short term stays. And then there are the other companies that came in “second” that have fallen by the wayside.

It’s like Sprite vs. Sierra Mist, Coke vs. Pepsi, Post-its and Band-aids versus…whatever the off-brand options are called. Second place means you aren’t the default. And being the default is important if you want to make the rules (for better or for worse). 

Why am I writing about this? This week I’m focusing on Compass and its aim to become the single real estate platform. Because this movement is happening, and while there are many key competitors, Compass is the only one that keeps agents involved at the forefront. 

Redfin, Zillow, and Opendoor are some of the other major players in real estate right now trying to transform the industry. Redfin, which I actually like, is a discount service for low-level transactions in markets that don’t see enough action to support a larger brokerage. Zillow aims to squeeze agents further and further for money, and has no plan for what to do when agents can’t afford to pay for their products anymore (which is why people are betting against their stock, HARD). And Opendoor wants to completely eliminate agents, which is fine in certain situations, but will never work in the luxury space or more complex transactions *cough*NYC*cough* and SHOULD NOT be the industry standard. Eliminating agents entirely across the board won’t happen, but that doesn’t mean that the “winner” of the platform race won’t be a company that discounts/discredits them.

Agents cannot be completely removed from the industry, but they can be screwed over. If the only options are the traditional brokerage (where we are viewed as employees and salespeople despite neither of those things being true), or the tech giant coming in and Zillowing all over us, lying to consumers and squeezing us with greater and greater fees to share our listings on their platform, then we will still exist, but we will have no power.

By contrast, if Compass “wins” this, agents will no longer have to pay Zillow or explain to their clients why we have value as people; we aren’t all sneaky gross scammers. So it seems kind of silly to watch other brokerages pile hate on us over and over again, waiting for the “fad” of technology to pass and rooting for us to fail. It’s not us versus you; it’s us versus the alternative: a world where agents have no power. 

So I see the future of real estate, ideally, as a combination of Compass in luxury/major city markets, with Redfin on the ground employing a few agents on salary or for reduced commission. And I see services like Opendoor or other buyers available to the “always needing to get a bargain” type of seller who will fight and kick and scream over paying any commission whatsoever. 15% of people want to pay a premium for the BEST, 15% of people want to pay as little as possible no matter what, and the remaining 70% fall in the middle. Opendoor can take 15% of the market; I’m totally fine with that. And then there will be boutique, smaller brokerages. Even if I’m completely wrong about who will be left standing, I don’t think I’m alone assuming there will be major, major change over the next few years.

Real estate is a $217 TRILLION industry. It will be reformed, and it’s only a question of who is left standing. And I, for one, am betting on Compass (duh). Because #fuckzillowforever, and anyone who claims that “business as usual” will work isn’t looking at the amount of turmoil and turnover in the traditional brokerage community (70% of US agents work under a different CEO than they did 18 months ago). It may be easier to be angry at other agents, especially in a competitive market, but it’s better for all of us if we put our differences aside and bet on agents AND tech together, because neither is going anywhere.

xo

Anna

New York Values #49 - Stop Treating Subletters like Purchasers

The mix of condos and co-ops in NYC are part of the reason the market remains stable, but they’re also a giant pain in the ass when it comes to subletting/renters. The more old school, the more obnoxious they seem to be #klenksvsboomers. 

For those of you who don’t know, co-op and condo sublets make up a significant portion of the NYC rental market. Some, like 870 Pacific (representttt) or sponsor units (more on that another time), have basically no board or approval besides the individual owners, and no additional fees. Others, like many in Manhattan, have elaborate processes for accepting tenants. This can include physical board packages hundreds of pages long...for a one year rental. And unnecessary paperwork aside, and ignoring that you often can’t gauge how long the approval process will take, there are the fees, fees, FEES!

Here’s a recent example from a condo sublet:

$300 in credit check fees (because the new laws do not apply to these types of buildings)

$650 “processing fee” (for their time going over the paperwork they made us do)

$50 fee to create the board package (I paid for this because I honestly felt like I needed to do something for my clients here, however small)

$1500 elevator fee (even if you weren’t hiring movers or actually moving furniture)

Right there we have $2500 in additional board package related fees, sunk costs that my clients will never see back (and none of this goes to the agents doing the legwork).

And, on top of that, there is an additional $1000 move-in deposit

This is extremely typical. I always warn clients off the bat that they could be putting down additional thousands, so it only makes sense if you are planning to stay for more than two years.

It’s not all bad — because of the higher barrier to entry these apartments are often priced lower than comparable spots in rental buildings. So as long as you are staying over two years you actually end up saving in the long run. But that can be a negative for owners, who are often renting to cover their maintenance or common charges + real estate taxes. And it is often buildings with the highest fees that also have the highest monthly costs to owners (ok, maybe this is anecdotal, but it has been my experience). 

Really, some of the fees are ridiculous and I don’t think they should exist. A steep deposit during move in? Makes total sense. But a $1500 “elevator fee” plus another $900+ in “processing” — what are you processing here? And the thing that bothers the most about it is how excited buildings were when it came out that the Albany rent laws didn’t apply to them.

At the end of the day, if you are renting in an owner building, it maybe makes sense you need to submit to a higher level of scrutiny in the form of recommendations and application materials. But I have submitted to plenty of rental buildings that were more thorough than a board package while being significantly less stupid.  A board package in this day and age seems more like a power move than anything actually meant to protect or help owners. Colored dividers, multiple hard copies hand delivered, managing agents with egos that you need to make sure you don’t upset by asking them too many questions about the typos and/or discrepancies in said board package…

Co-ops and condos will need to have their systems overhauled drastically in the next decade, and some have already started. But all methods have their drawbacks and it leads to amusing but ridiculous idiosyncrasies like having to notarize a form or sign something “wet ink” only to upload a scanned copy. As companies like DocuSign (my fav company on earth right now) make document transmission safer, easier, and more transparent, I look forward to how this will help make things clearer and less risky for both purchasers AND renters.

But going back to subletting: with all the press around trying to make move-in less expensive for tenants, it’s unfortunate that a significant portion of the rental market is completely exempt. And this, my friends, is why we need more dialogue between lawmakers, people in real estate, and building managers. Because the system, as is, is as stupid as it is broken.

xo

Anna