For What It’s Worth
March 18, 2005
Full Exposure

I’m about to list a very nice house in Riverside whose owner generously offered to let Round Hill Partners hold it as an “exclusive” for thirty days before submitting it to other brokerages in town via the Greenwich Multiple Listing Service. I appreciated the offer—if you sell your own listing you get twice the profit—but I declined because it wouldn’t have been in my client’s best interest.
Valuing a house is an imprecise science; an experienced agent can make a pretty good guess where a particular property should sell based on recent sales of comparable houses and what is currently on the market but the ultimate test comes when the house is put on the MLS and all twenty thousand agents in town can show it to their clients. The market will always correct a mistake in pricing. Too high, and your house will attract no bids. Too low, and any number of people will bid its price to the proper level. And you won’t know that you made a mistake unless and until you expose the house to the entire market.
Some owners understand this. My brother Gideon tells me that recently his firm, Cleveland, Duble & Arnold got a listing because, the owner told them, theirs was the only one out of five firms interviewed who didn’t promise him an “in-house buyer”. The owner wanted the best and highest price for his house and he obviously recognized that the way to achieve this was to offer it to the entire world of buyers.
I am aware of one instance where, after three different firms priced a house in the low-to-mid $4,000,000s, another agent received the listing because he claimed to have a buyer for the property at $5,200,000. He did, too, and the seller profited handsomely, but either the other firms were all wrong or the listing agent sold his own client an over-priced house. Since I wouldn’t trust the agent in question with my pet snake collection I think the latter is more probable, and why would you want to do business with someone like that? If he’ll sell out one client one day, he’s likely to sell you out the next.
In my opinion, the multiple listing service is the best thing to happen to sellers since record low interest rates. While it’s possible that an ‘in-house” buyer will over-pay for your property, in my experience it’s far more likely that you’ll have cheated yourself.

Bidding Wars

Andy Healy of this office recently listed a prime building site in Havemeyer for $929,000. Not surprisingly, a bidding war broke out and the house went for way above its asking price. My own client didn’t win that war—so much for company loyalty, Andy—but I was impressed, again, with the bidding process now becoming common in town. A seller’s attorney—in this case, Tom Ward—draws up a proposed contract with the price and closing date left blank. Interested bidders pick up the contract and have a few days to consult with their own attorney, make any changes they like, fill in their price and return the signed contract with a deposit check. At an appointed hour, the seller’s attorney opens the contracts and whoever has submitted the best bid wins. The seller signs on and voila—the deal has gone to contract.
I like this procedure because it serves both parties’ interests. Sellers benefit because it weeds out insincere bidders and buyers aren’t tormented by “accepted” offers that then get tossed in favor of a later, higher bid. Another benefit: while bidding wars generate a feeding frenzy that often produces a much higher bid than the original asking price sometimes, when informed that they have submitted the winning bid, buyers get cold feet and decline to proceed. The second highest bidder is then offered the property and he starts thinking, “if the first guy doesn’t want it, why do I?” and so on down the line until that wonderful winning price has sunk below the horizon. The signed contract procedure eliminates this risk and locks the price exactly at it’s frenzied highest point. And that’s good for sellers.

Rock’em Sock’em Robots!

I’m told that fisticuffs broke out at a recent open house between two agents angered over each other’s driving skills, or lack thereof. I’m sorry I missed that because it would have livened up an otherwise dull day spent driving around town touring other people’s houses. We often have policemen at open houses to direct traffic. Now, I suppose, they can add maintaining law and order to their job description. Professional Realtor; an oxymoron of the first order.

Market Conditions

In a word, torrid. Thirty-three houses went to contract last week, including some houses that have lingered for literally years. Bidding wars erupted over houses that the owners couldn’t give away last fall and yes, you Cassandras, prices are up. A bit of advice for the MBA’s and their calculators: it is possible—probable, in fact, that houses won’t continue to appreciate at last year’s rate of 24% but that does not mean you should expect cheaper prices two months from now. Greenwich’s market goes flat from time to time but I see no indication that prices will actually drop. And for heaven’s sake, put aside your analysis charts for a moment and consider that you are not buying a Florida condominium (of which an additional 60,000 are due to be constructed this year) you’re looking for a house for your family. If it appreciates, fine, but there are other considerations here than a simple investment decision. Or there should be.

Smart Pricing

21 Rainbow Drive is a very nice house with an unconventional layout: the kitchen is on the second floor. I don’t know why it was built this way but, once you get over the idea of walking upstairs with your groceries, it’s a bright, sunny space that works. The last time it was on the market in 2001 it sat for 111 days before finally selling for $665,000, $134,000 less than its original asking price. Time and the market march on, of course, and today that same house with a conventional floor plan would probably fetch $1,495,000 or so. So how do you deal with the fact that the kitchen’s upstairs? Offer a discount. Angela Swift has priced this house at $1,149,000, leaving plenty of room in that price for a buyer to flip the layout and still have money left over. What will most likely happen, aside from this house selling quickly, is that the new owners will quickly get used to the floor plan and leave everything the way it is. And live happily in their bargain house.

Other Houses of Note

Debby Gardiner’s new listing at 4 Stanwich Lane is priced at $1,795,000, which seems right to me. A nice older house that could use some updating but the street is great and any money you put into this house will be more than repaid. I like it.
When 10 Tyler Lane in Riverside came on the market last fall I liked its location (dead end street) and its spaciousness very much but questioned whether its price of $3,100,000 was justified in view of the poor quality of the interior trim and doors. I didn’t want to embarrass the owners so I didn’t give its address but they identified their house anyway and pulled it off the market to upgrade those items. They have done so and returned it to the market via Liz Johnson. I saw it last week and it’s vastly improved and very nice. Between the improvements and the market’s advance, I’d guess this will sell quickly.

Access

My great grandfather, a builder in New York City in the 1800’s, liked to say that a stairway should be wide enough to swing a coffin in. This bit of wisdom was brought to mind recently when we were obliged to call in a sewer clean out service and discovered that the line trap was located in a crawlspace whose entryway was too narrow to accommodate the router machine. All was well, eventually, but the moral here is that, when building, make sure that you leave adequate access to service all the mechanical and plumbing systems. Another lesson remembered: the very best sewer cleaning service in this area is Kaiser Battistone (not Kaiser Sosa-that’s another story) up in Norwalk. I called them (800-525-6295) late at night, eschewed the emergency number and merely asked that they call back in the morning. They called at 7:30 and had a man at the house by 8:00. The problem was resolved within thirty minutes for a very reasonable (especially considering the alternative) fee. That’s exactly the service they seem to always provide, based on my own previous experience and that of other agents I queried. Good company. Also known as Plumber Rooter.

And Another Item in Bad taste

I’ve been spending a fair amount of time at Greenwich Hospital lately as a visitor and have been struck by the absolute atrociousness of the prints on its walls. These things are everywhere: corridors, patients’ rooms, entranceway and they must be hurting the moral of everyone who works or is recovering there. These aren’t “art”, they’re “wall accessories” and are truly dreadful. I’m surprised that an institution that so obviously took pains to build such a splendid new hospital would have used so little care in selecting decorative items. Perhaps some donor can remedy this. Until then, I’ll loan the place my collection of velvet Elvis paintings.

751 North Street

Maureen Crumbine’s had this listing for awhile now and at its current price of $6,500,000 I think it’s probably the best bargain in its price range. Unlike some four acre plots, this one (4.5 acres, in fact) is square, not narrow and long, thereby providing complete privacy from neighbors on either side. The rear is protected from future houses springing up in your backyard because it backs up to the Babcock Property’s 300 acres. That’s the property; the house itself is just as nice and finished beautifully. Great landscaping, top quality finishes inside and a really good price. What’s not to like?

The Highway Differential

Ever wonder how much proximity to the Merritt Parkway takes off a house’s value? I’d say, at least $500,000. At least, that’s what I conclude after viewing Ed Mortimer’s listing at 34 Carrington Drive. This house is huge: six bedrooms, plus a two bedroom cottage, nice high ceilings and high quality new (2000) construction, plus a pool and 3.6 acres. If it were on the other side of the street, I’d place its value at $3.1 million. But it’s not; instead, it backs up to the Merritt. Ed has dealt with this appropriately by pricing the house at $2.6 million and, sooner or later, a buyer will come along who is willing to exchange a bit of noise for the opportunity to live in such a nice house. The irony of this type of situation is that owners who make such a compromise eventually tune out the objection: railroad, highway, whatever and, when it comes time to sell the house, often insist on pricing it as though there were no problem at all. “Highway? What highway? I haven’t heard it for years.” Potential buyers, alas, haven’t acclimatized to the nuisance and they’ll insist on a discount. On a related point, I’m curious to see what those new houses going up on North Street, with their backs to the Merritt, eventually sell for. They look as though they’ll be awfully expensive, and I wonder if they’ll find buyers at the builder’s expected price range.

Public Open House Signs

I unfairly used too broad a brush when I recently condemned “chain store Realtors” for breaking the law governing real estate signs. In fact, only one of the chains does so repeatedly, and that’s Weichert. Every Sunday, their loud yellow signs are posted throughout our neighborhoods and along our highways and Post Road. It’s a cheesy way to advertise a brand name and it’s illegal. So if, like me, you don’t like your neighborhood besmirched, why not call someone, like Diane Fox at the P&Z ,622-7894, or Weichert’s manager, Elsie Pecorin, at 661-5400, and complain?

Frozen Cows?

We had two snow storms while you all were away and I noticed, again, that word of impending snow sends nervous mothers flocking to the supermarkets to stock up on food and, for some reason, endless quantities of milk. Food I understand—the farmers’ crops will be buried and we won’t see their produce until the sun melts the snow cover—but what’s with the milk? People seem to buy it as though the cows won’t be producing again until July. In fact, dear reader, cows are milked every day, twice a day, winter or summer, snow or no snow. They don’t freeze, really. So a day or two’s supply is probably all you need. There is no reason to push one cart ahead of you and tow one behind you, each overflowing with gallons of milk, just because we’re anticipating a bit of snow. Trust me on this.

What is Twenty-three Months, Five Days, Alex?

From the April 4, 2003 edition of this column:
“I see that an oriental rung company on the Post Road is conducting a grand opening sale. How long before order is restored to the universe and it holds its first going out of business sale?”

Your Name is Destiny

According to Greenwich Time, the new head of the Norwalk Aquarium is a woman named Jennifer Herring.

Watch Your Language

Some time ago a friend of mine spent quite a bit of time with a client who wanted to “buy Leona’s place”. The deal never went anywhere (the property is not for sale, as of now) and the would-be buyer disappeared. Until last week, when he resurfaced in the pages of the Wall Street Journal as the alleged kingpin of a massive securities fraud. It’s obvious that, had my friend dug a little deeper into the reference to “Leona’s place” he’d have learned that the man was referring to Bedford Hills, not Dunnellen Hall, and he’d have saved himself a lot of wasted effort.