For What It's Worth

Arboreal Timing
The late Betty Moger, who ran Cleveland, Duble and Arnold practically forever, liked to say that if you waited for the dogwoods to blossom before putting your house up for sale, you missed the market. Mrs. Moger was right about everything (just ask her son, Dan) and this adage was no exception. While intuition would suggest that houses sell better when seen on sunny, warm spring days, the bleak days of March hold the most buyers. Go figure and, if you’re planning to sell your house this spring, go get ready now.

Contracts Are (Sometimes) Forever
When you signed a contract to buy your home in Greenwich you probably paid a ten percent deposit and agreed to forfeit that sum if you defaulted. This “liquidated damages” clause gives sellers the confidence to go out and commit to buying another house for themselves and often causes buyers to break out in a cold sweat late at night when their mortgage broker doesn’t return their calls. But what happens if the buyer is transferred to another state before buying? Or can’t sell the house he was hoping to move up from? Is that deposit really gone? Will courts permit voluntary acts of capitalism between consenting adults?

Like everything else in law, it depends. Jeremy Kaye, one of the best real estate lawyers in town (and yes, his brother Joel is another—it’s unseemly when they squabble for attention like this) kindly researched the applicable law on the subject and sent the defining cases my way. That he made me read them myself instead of providing a nice summary only partially diminishes my opinion of the man. The basic answer is that, notwithstanding the label “liquidated damages”, the seller who wants to retain the deposit is going to have to prove that he suffered damages. The law will not enforce a forfeiture where there are no damages. In the Superior Court case of Paul v. Levine, CV00-0180414S (February 25, 2002), a seller contracted to sell his house for $890,000. That buyer defaulted when he was unable to sell his own house and the seller then sold the property to someone else for $945,000. The court would not permit the seller to keep the original buyer’s deposit, using the old “no harm, no foul” theory of jurisprudence.

As a lawyer long ago, I represented a client who kept two full deposits before finally, and regretfully, completing the sale to a third. But we were lucky that neither buyer had the stomach for a protracted legal battle. Lesson here is that, in a rising market, a defaulting buyer may well be able to retrieve some or all of his money eventually. Not right away, though. The plaintiff in Paul v. Levine waited two years and the unhappy homeowner involved in the Connecticut Supreme Court case of Vines v. Orchard Hills, Inc. 181 Conn.501 (1980) waited seven (and lost). Of course, if the market is not rising and your seller does suffer a loss, it’s coming out of your deposit, so beware.

If I had a Million Dollars
I couldn’t buy much in town. But if I had three million, and wanted to live in a bucolic setting minutes from downtown Greenwich, I’d look at Dancy Cassell’s listing at 640 Lake Avenue. Once owned by the great bird carver, El Arnold, this barn-like house (my term-Dancy would probably prefer “country farm house”) is set back from Lake Avenue on a great big lawn that swoops down to a nifty little pond. It is perfect for artists, writers or anyone who’d like to feel like one.

And if I had five million dollars, I’d be drawn to Lyn Stevens’ new listing on Glen Avon Drive in Riverside. Almost seven thousand square feet with five bedrooms, it still fits nicely on its lot. What is perhaps the smallest park in town is directly across the street, protecting the view over Cos Cob Harbor. No pool (hey, it’s only five million dollars) but an approved site for one. Glen Avon has more kids per square foot than I can count. It’s a terrific street for families.

Great Moments in Real Estate Advertising
From a Weichert (New Jersey) ad: “The circular, Belgium block driveway brings your visitors to the grand entrance where two, twelve-foot-high mahogany doors open to an intimidating grand foyer.” You suppose they’re selling Tony Soprano’s house?

For What It's Worth

The Swallows Return
Each year around Thanksgiving the real estate market shuts down for the holidays. Buyers and sellers spend their energy locating the latest Chicken Dance Elmo or GameBoy rather than keep our local army of real estate agents well fed and plump. Shame on them. And each year, just as we in the business despair at ever selling another house, just when we are convinced that people have finally given up on Greenwich and decided that they’d much prefer to live in Port Chester, thank you, January 10th rolls around. This past week was no different.

The buyers are back. The tire kickers of December are now seriously looking. Contracts are being signed, houses are selling and that activity, in turn, is flushing new inventory onto the market. There’s no point looking for a new house, after all, if you don’t think you can sell your current one. But when your neighbor’s house is sold (yeah, that one—that wreck, with a kitchen that’s not nearly as nice as yours and a basement you wouldn’t lock your worst-behaving kid in), the possibilities seem unlimited.

From Friday, January 10th through Wednesday, January 13th, twelve properties (asking prices from $550,000 to $4,695,000) went to contract. By the time this article sees publishing daylight, many more will have joined them, as there are a lot of accepted offers out there waiting for the lawyers to do their magic. Two new properties of note this week: 58 Park Avenue South, in Old Greenwich. Renovated by Lee Neuberth, this house is a perfect example of how to update an old house while preserving neighborhood sight lines. The owner/developers have built what is essentially a new home with everything demanded by current buyers (granite, marble, hardwood floors—you know the drill) but kept within the building’s original side lines. 3,850 square feet of quality and asking $1,875,000. I think they’ll get it. The second home is on Greenwich’s other Park, Park Place, across from Christ Church. Another renovation, very well done, with a great view of the Putnam Cottage from whence Israel Putnam fled during the Revolutionary War (why we choose to use a picture of a fat coward fleeing for his life on our town seal is a matter for another forum). William Steele of my office has the listing but that’s a disclosure, not the reason I mention it. $2,195,000.

Real Estate For Dummies
What is a stupid price? One which, despite numerous showings, fails to produce a buyer. There are few certified geniuses in this industry and mistakes are made. When first asked to price a house, a broker will consider the location and condition of the home, calculate what comparable houses have been selling for and make an educated guess at the proper asking price. If the broker is lucky, and she often isn’t, her client doesn’t over rule her with his own “knowledge” of what the price should be and the house goes on the market at the suggested price. If it sells that day, she guessed right (and is promptly criticized for under-pricing it). If twenty agents show their clients through the house, clients who are all actively seeking to buy a house in that price range, and not one comes up with an offer, the broker guessed wrong. There’s something about the property, some defect she didn’t notice, that is convincing buyers there are better houses elsewhere. Nothing is so wrong with any house in Greenwich that the right price can't fix so the “cure” is as obvious as it is painful: drop the price. So far, nothing stupid has occurred, only a miscalculation of the market.

It is when the original price is maintained in the face of a failure to sell that stupidity comes into play. Sometimes it is the agent who hates to admit her error. More commonly it is the seller who turns stubborn. Even though, before he received his agent’s original price opinion he might have been delighted with a lesser amount, once the house has been offered for sale at one price, every dollar’s drop from there is money out of his pocket. This accounts for the sorry spectacle of puny, ten thousand dollar price reductions. Sellers seem to imagine the following internal conversation in buyers: “Oh, I would never bid on that house at $790,000, but now that it’s only $780,000, here I come!” So soon after Christmas, it seems needlessly cruel to remind readers that there is no Santa Clause, either.

Greenwich Real Estate
Christopher Fountain

A weekly column on our local real estate market. Readers are invited to send questions, comments and suggestions via email to the author at crfount@hotmail.com. Some questions may be printed; all will be answered.

Still Crazy After All These Years
There have been signs of life in the seemingly moribund upper end of the market recently. From June 1st through October, only four of the seventy-four houses with asking prices above four and a half million dollars went to contract. That is a batting average even the 1962 New York Mets wouldn’t envy. But late last year Aberdeen Construction’s $5,675,000 new home on Kennilworth Terrace went in two days with, rumor has it, four back-up offers. Nothing on that particular street has sold previously for more than $3,000,000. Proving what? That there is an abiding demand for new, quality construction in desirable locations. Unlike the recent past, today’s buyers seem to notice and be turned off by hollow-core doors, unfilled nail holes and generally shoddy workmanship in multi-million-dollar homes. Bad news for the plastic industry and window manufacturers who use those cheesy snap-on mullions, but good news for this town. Greenwich was in danger of seeing most of its housing stock of recent vintage self-destruct five years after completion.

Old houses are also selling, when the location and price is right. Two 1900-vintage homes—Victorianish, high ceilings, lots of rooms—were put up for sale last week, each priced around two million dollars. Both (one on Intervale Place, near Belle Haven, the other on Ledge Road in Old Greenwich) received offers within hours.

On the other hand, the lower end of the market has never let up. Anything decent under $850,000 went during the fall, leaving current buyers with the dubious choice of negotiating with unrealistic owners of schlock or waiting for new inventory to come on in the next few months. If you are the owner of such an unsold house, the market has a message for you: “drop your price!”

The Red Queen Speaks: “A Word Means What I Say it Means!”
Of all the realtorease out there, the one term that causes the most confusion is “renovated”. Most buyers understand that ‘convenient to transportation” means that you can climb the fence and hitch a ride on I-95, and “perfect starter home” means you’ll be pitching a tent in the living room to stay dry, but “renovated in 1997” means what? A new kitchen? New plumbing? New master bath? Sometimes, yes. And sometimes it means that the seller has swept the ashes from the fireplace and chased dust bunnies out from under the beds. How can you tell which is which? Here’s a clue: if a real estate agent can find anything nice to say about a house, he’ll say it. So when reviewing a listing sheet, look for specific mention of improvements. If there are new granite counters in the kitchen, they will be described. If the master bedroom was expanded to encompass a new, separate bathroom with the now-standard marble whirlpool tub for eight, free-standing tiled shower and his and her bidets, they’ll all show up for the reader’s approval. But if a 1905 house is being sold through Probate Court and the only mention of anything new is that it has been “renovated”, you can be pretty sure that you won’t have to worry about a dirty fireplace. You want anything more, line up a builder.

The Bibliophobic Theory of Value
Why do some houses sell the day they are placed on the market while others languish, unloved and unwanted? Price of course, but why are some homes valued less than others? I am working on a theory: the larger the number of books in a home, the longer that house takes to sell. I would not want to embarrass certain homeowners by exposing them as bibliophiles but there are a number of incredibly attractive houses that have sat on the market since summer while neighboring houses sold immediately. The only difference that I could see was the number of books in each. The quick sellers all had the requisite two books: one on Wall Street finance, another on the best golf vacation sites. The slow-pokes are just cluttered with books—by the bedside, in bookshelves and in the bathrooms. It is possible that book ownership is just the outward manifestation of another, more serious disorder that infects an entire house, sort of the New England equivalent of mold; it is equally possible that most homebuyers have never seen a book before, and recoil in horror at the sight of such an alien object. (Over-heard Starbucks conversation between a happy renovator and her friend: “they asked if I wanted to save any of the bookshelves, but what would I do with a bookshelf?”) Indeed. My research continues.