Paula Hathaway, LBA, The Hamptons, E. L. I. NY

Is anyone else out there having difficulty with other agents/brokers right now?

A very good friend of mine, who works for the same company as I did for many years, called me the other day and asked me if I was finding that things had changed in our community. She was asking specifically if I had been having difficulties with fellow agents, such as "pocketing" a listing or losing a listing to another broker, while you had the listing!

At first I was surprised by her question; not because things are going so smoothly right now in our area, but because she is the last person that I ever expected to hear this kind of problem from. I will call her Grace.

Grace has been in real estate almost as long as I have (about 15 years) and we have never been competitors because she has her own, well established base of clients and customers and I have an entirely different one. This is possible because we deal with second home buyers and sellers and they come from Manhattan, New Jersey, Connecticut, Upper New York State, Massachusetts and a large number of Europeans and Eastern Europeans. There is a huge base to choose from and overlapping client/customer rosters were infrequent here in the past.

Suddenly, there has been a severe decline in buyers, just as in most other markets across the nation. It happened later here than in other areas simply because we are not dealing with primary homeowners or buyers. Because of the huge growth in sales here, we have had a comparable increase in agents.

From 800 agents in 12-13 small brokerages in the 90's and early 2000's, we now have over 2000 agents in 4 giant brokerages. In addition to the new agents flooding our small community, we have watched as 2 large conglomerates absorbed the smaller "Boutique" brokerages.....a "thing of the future" we were told as it was unfolding. One agency has 2 offices in each of the 5 Hamptons,simply because of the merging of companies here.

ALL THE WHILE, THE HIGH-END OF THE MARKET REMAINS STRONG!

So what we have here in the Hamptons now is a microcosm of the macrocosm. Agents literally trip over one another when showing properties. Every one of them are now trying to do rentals. Summer rentals have gained in strength because of the slow down in sales---buyers who want to wait to buy are renting for summer, winter and year round; it is like someone flipped the switch from buying to renting. When the Bear Sterns buy-out was reported, the steady stream of buyers slowed to a trickle.

And all those new agents? Well, there is pandemonium when dealing with a "new" personality that has emerged. Instead of a low key approach where everyone has the patience to wait while a house that is listed with one broker either sells or becomes an open listing, there is an onslaught of agents vying for those high-end listings that might give them an edge in their marketing efforts. Landing a "big one" has become the focus of almost every agent.

Grace almost lost her $18Mil listing to another broker before the ink was dry on her agreement with the seller...well maybe not that soon but the owner was bombarded by at least 12 other agents while the exclusive agreement was in effect and Grace was livid. She was fortunate enough to have a loyal client who did inform her of the "pitch hits" from other agents.

There is a trend now for some agents that do get a high end listing, to "pocket" them. They don't even market them; they then sell the listings themselves, leaving the owner in the dark about the fact that the property never hit the market! It is impossible for me to know if they actually did this with out the knowledge of the owner, but what would you think if you suddenly heard of a $60Mil ocean front sale that you never even knew was on the market?

It feels like the "Wild-Wild West" here in the Hamptons at the moment. It feels like lawlessness is a way of life now, at least here in the Hamptons. As sellers decide NOT to put their homes on the market because it is such a bad time to do that, the problems multiply. I have had similar bad experiences with another agent or two recently and I feel better now that I know that I am not alone, now that I heard from Grace!

Is anyone else out there feeling this change in attitude? Or is this just another Hamptons anomaly?

VESPA!!!

When you stop to think about it....just what did one do with one's free time before ActiveRain?

I can't even remember--All I know is that now, when I come home from the office, I sit down and read, read, read posts....they are a fountain of information.

NOW, I LOOK BACK:

I have participated in a contest or two

I have written more than I ever thought I could

I have made my own advertising videos (Thanks to Jeff Turner)

I have learned more about technology than I ever wanted to before

I have people from all over the country communicate with me, and I with them

I have forged deep friendships

I think I may have even created an adversary or two

I have participated in one heck of a LONG blog party

I have had memorable discourse with other bloggers

I have had disagreements, maybe even an argument or two

I have seen a huge number of people come into the fold as someone lost a loved one

I even took a sabatical from ActiveRain as I "re-tooled" my blog material....and my "self"

....and all this has happened since November of last year--just 6 months of playing in this unique sandbox.....JUST 6 MONTHS!!! What in the heck will the next 6 months be?

A Very Big thank You to everybody here on AR--What would my life be without you??

While this phrase keeps coming up in the press, in boardrooms, and in real estate offices across this land, "All real estate is local" has an even deeper meaning to me today than last year, or last month or even last week.

I hope to explain to all those who may be interested, how this market differs from most; the following may not be applicable to any other marketplace, but it is totally unique, and to me it's uniqueness is it's real value.

The Nation is tied in knots right now regarding the sub-prime mess and no one is an exception to it. Even if our individual markets are not the place where sub-prime loans were the order of the day, they (sub-prime loans) are affecting everything we know and do about our own real-estate markets.

THE HAMPTONS

This misunderstanding is not too far out of reach, especially if you are in the media and trying to capture the attention of the nation in order to properly inform the masses of how the sub-prime loans are affecting them. However, if you are in a part of the country where your clients and customers are from New York City and the local market is a second home community, not a primary one, it becomes difficult to help buyers to see the real picture. Buyers hear what is said in the media and interpret it to be applicable to the Hamptons, even though it does not apply. Therefore, we ARE being affected in a dramatic way. How long it will affect this market is up for discussion; I believe that when the pent up list of buyers realize that houses are still selling here and the prices have not dropped as was expected, they will start a buying frenzy of unthinkable proportions.

Now, granted, this is purely my own opinion but let me explain how I see it from my position here in the Hamptons: small marketing area, average price on homes for 3Q 07 was $2,005,685, (+24.4%) median sales price at $1,030,000 (+21.1%) with the number of sales at 361 (-21.5%) in 151 (+25.8%) days on the market. Our listing inventory was 3,742 units for 3Q 07 versus 2,802 for 2Q 07. (inventory for the prior year is not available). This is hardly typical of the rest of the nation and I know that these figures will change drastically for 4Q 07 and especially for the 1Q 08 and not for the better.

If you were to compare these figures with another one, not too far away (10 minutes by train and 30 minutes by car) you would see the reality of what "local" market identification really means.

NORTH FORK for 3Q 07 Ave. sales price:$707.983 with a +1.8% increase and Med. sales price at $522,500 with a -2.3% decrease. Number of sales decreased from 147 units to 66 units (or -55.1% from 2Q to 3Q of 07) and from 154 units for 3Q 06. The listing inventory stayed much the same: 733 for 3Q and 699 for 2Q of 07.

NOW THIS IS LOCAL!!

The rest of Long island falls in line with the rest of the nation and in fact, in pockets has suffered even greater losses of homeownership than the Midwest and Florida. We tend to think of the Hamptons as a suburb of New York City. In fact, we share an affinity with the city that goes beyond the standard market differences.

I worked in New York City for the first 6 years of my real estate career. I worked on the upper East side of New York and "cut" my teeth on the business by dealing with the same crowd that populates the Hamptons.

In 1995 when I was working in Manhattan, the trend toward owners listing their co-ops and condos as exclusives became the way that the business was done with the most efficiency...open houses are the number 1 source of sales in the city; an apartment can come on the market on a Thursday and be sold at an open house the next day---at least that is what happened when the market was thriving. Open houses were done only when one had an "Exclusive right to Sell" agreement with the homeowner. Exclusive Right to Sell was the standard choice that homeowners made in the city and thus the Hamptons, when it came time to sell their second homes. With the Exclusive Right to Sell came the commitment on the part of the brokerage community to handle these listings with kid gloves. Advertise, do open houses, be the keeper of the key and in general become the homeowners right arm and shadow self. These owners are not usually in residence so it is of particular importance to be available at all times to serve both the buyer and the sellers every whim. Here in the Hamptons, we work 7 days a week, hoping to be able to grab a day here or there to get the much needed break from the business. Weekends are our busiest time because that is when people are here.

THE ANTI-MLS

Neither the City or the Hamptons ever joined MLS. We did try to at certain points but discovered that that particular system fell far short of our needs when it came to "handling" the listings as the owners want us to. Not meaning to be an elitist, I fully understand that houses which contain major art collections and other valuables that another seller may not own need to be treated carefully and with much tolerance of the owners concerns.

Not only that, it was discovered that if we listed the more expensive properties on MLS, there was a groundswell of agents who do not know the market here, have no interest in knowing it but just want to sell the "Big Ticket" houses. That agent who has no clue as to the property values from one street to the next or from the North side of the highway to the South does not do any justice to a buyer or a seller by trying to sell in this area. This issue is a controversial one; how can you overcome the problem?....referrals. Referrals are a mainstay in this market; in fact, if an agent does not participate in the referral business, he/she is missing out on the biggest source of business available anywhere in this country.

We have our fiduciary responsibility to the seller, however if someone decides that they want to work as a Buyers Broker, they are able to do so by separate agreement, and this is disclosed to the seller at the time of a transaction. An agent can not give undivided loyalty to two or more principles in the same transaction. Thus, real estate license laws prohibit a broker from representing and collecting compensation from both parties to a transaction without their prior knowledge and consent. "more difficult to handle is the situation in which a seller's broker for example, emotionally adopts a buyer and unconsciously begins to work for the buyers's best interest, so that an unintended and illegal dual agency results. One could be acting as a dual agent even if not being paid by both parties." (from the Law of Agency, Modern Real Estate Practice in New York)

HERE'S TO OUR DIFFERENCES; LET'S CELEBRATE THEM!

It may seem to some out there that those of us who are fortunate enough to be living in the most beautiful "light" in the world could not possibly amount to a hill of beans. Not only that to be able to work in it, that beautiful "light", but to be able to spend our working hours walking through some of the most wonderful, historic and picture perfect properties in this country must mean that we are "light" in other ways. Well, don't be so quick to jump to conclusions. I at least have made peace with it. I have a connection with far greater things than just making a living. I, at least have an agreement with myself that I will do what I can to preserve the beauty, the history and the "light". And if it means I can make a few bucks while I do it, how bad is that???