Thursday, April 18, 2013

Legal Line Question of the Week
Switching Electricity 
& Gas Accounts in NYC
QuestionI have been asked by my purchaser of a condominium unit in 
New York City how to switch the electricity from the seller’s 
account to their own account? How is this done and is 
the purchaser responsible for the seller’s unpaid bills?
AnswerOnce the closing date is established, the purchaser should contact 
Con Edison to inform them that the account should be switched to 
the purchaser’s name on the scheduled closing date.  Con Edison 
may ask for documentation which will indicate that there will be 
a new owner of the unit.  The purchaser will establish a new account 
with Con Edison and a final electric bill will be sent to the seller.  
The purchaser will not be responsible for the seller’s balance.  
It is also prudent for the seller to contact Con Edison so as to verify 
that the account was switched over to the purchaser’s name.
If gas is metered separately in the condominium, then the same 
procedure will apply for switching gas accounts.  Depending on 
the location of the condominium unit, either Con Edison or 
National Grid (as the case may be) will need to be notified.

By: Neil B. Garfinkel, 
REBNY Residential Counsel

Thursday, April 11, 2013

Legal Line Question of the Week
Can an Exclusive REBNY Broker insist 
that a Co-Broker not accompany 
a Purchaser to visit a listing?
QuestionI represent a purchaser who is interested in seeing an apartment that is 
listed with a REBNY Exclusive Broker.  Apparently, the Exclusive Broker 
is not allowing me to accompany my purchaser to view the apartment.  
Can the Exclusive Broker do this?
AnswerNo.  The Department of State (“DOS”) has consistently stated that 
(i) “a seller's broker must always honor the buyer's right to be represented 
by his or her own broker,” (ii) “refusal to work with a buyer's agent denies 
the buyer the right to the professional services of the broker of his or her 
choice,” and (iii) “any such denial will be construed as a violation of the 
selling broker's duty to deal honestly, fairly and in good faith with the 
buyer.”  Furthermore, the DOS has specifically stated in an 
opinion letter: “With regard 
to showing the property, the buyer has the right to have the buyer's broker 
present when the property is shown to the buyer, and the listing broker 
cannot impose any conditions that would frustrate buyer representation 
or place unnecessary obstacles in the path of buyer representation.”

By: Neil B. Garfinkel, 
REBNY Residential Counsel
Partner-in-charge of real estate and banking practices at Abrams Garfinkel Margolis Bergson, LLP

Wednesday, April 10, 2013

Q1-2013 in the Books -- Buyers Facing Inventory Shortage

A: Manhattan active inventory stands at 4,826 units, down 30% from this time last year. At the same time Manhattan's Pending Sales, the measure of real-time demand, stands at 3,154 contracts awaiting closing; this is up 24% from this time last year. On a monthly basis, we continue to see 'less new stuff' coming onto the market and 'more listings' than usual going to contract. It seems Manhattan is a tale of two markets; one kind of market for lower quality/higher priced listings that aren't experiencing the activity being discussed here and the other is a fierce market where buyers are competing each other over quality product that is reasonably priced. Either you are priced right or you aren't. This combination is leaving buyers frustrated as they pass over the over-priced stuff and deal with 'best & final situations' for the quality, well priced listings. I'll repeat what I said earlier this year, "I can't think of a better time for a seller to list their property in Manhattan". My advice to sellers that are considering listing but are waiting for whatever reason, list now and take advantage of current conditions! Lets discuss and show you the real-time data.

First I would like to show you Manhattan Monthly Contract Activity that should easily allow you to visualize the reflation this market experienced since 2009, and where we are trending today:

q1_2012contractactivity.jpg
Conclusions:

March 2013 saw 1,254 new contracts signed
This is: +14% from FEB 2013 and +3.3% from MARCH 2012

Q1-2013 saw 3,212 new contracts signed
This is: +19% from Q1-2012

In terms of deal volume, Manhattan continues to produce at a very high level compared to prior month, prior year and the prior year's first quarter. Now that you have a sense of real-time deal volume trends lets move on to supply trends.

Manhattan Monthly New Supply trends look like this: 

q1_2013supply.jpg

Conclusions:

March 2013 saw 1,623 new listings hit the marketplace
This is: +13% from FEB 2013 and -8% from MARCH 2012

Q1-2013 saw 4,597 new listings hit the marketplace
This is: -4% from Q1-2012

Combine Active Supply trends & Manhattan Pending Sales trends over the last year and you get the following basic chart on where we are today and an explanation as to why it feels 'so tight but strong' out there:


broad_market.jpg

Manhattan is a highly segmented marketplace with activity varying across neighborhoods, price points, and property type. I can deal with the bidding wars as that is simply a side effect of a strong market + a properly priced quality listing. What I can't stand are the sellers that are stubbornly over-priced and simply "testing the market" to see if they can get their #. Of course these sellers are "looking for cash offers" or "non-finance contingent" offers because of concerns their # won't appraise. It's frustrating but in the end, the seller has every right to do what they want with their property; and today's market certainly is seeing leverage shift strongly to the sell side. My advice would simply be that if you have a high quality listing and are testing the market, at least be cognizant of the level and terms where bids are coming in and hopefully you will ultimately listen to what the market is saying regarding value.

To close today's discussion I leave you with the 16 Top Producing Neighborhood's of 2013 in the UrbanDigs Manhattan residential real estate tracking platform (subscription required for links and full access to the chart system):

*sorted by Strongest Pending Sales %chg Year-to-Date 

1. SoHo/NoHo/West Village +83.6%
2. FiDi/Civic Center +72.7%
3. Chelsea/Midtown South +58.8%
4. Gramercy/Flatiron District +53.6%
5. Tribeca +48.4%
6. Murray Hill/Kips Bay +40.7%
7. Upper West Side +38.6%
8. Upper East Side +37.7%

========== MANHATTAN BASELINE +36.2% ==========
9. Midtown East +31.6%
10. Midtown West/Clinton +23%
11. Lower East Side/East Village +28.2%
12. Inwood/Washington Heights +24.5%
13. Harlem/Hamilton Heights -1.9%
14. East Harlem -4.9%
15. Battery Park City -11.8%
16. Harlem/Morningside Heights -16.2%

Posted by urbandigs

Thursday, April 4, 2013

Legal Question: What is a BPO?

Legal Line Question of the Week
Broker Price Opinions
QuestionWhat is a BPO?
Answer“BPO” stands for Broker Price Opinion.  A Broker Price Opinion is 
prepared by a real estate broker to provide an estimated value 
of the probable selling price of a subject property where the 
requesting party does not want to incur the expense of an appraisal 
of the subject property.  The real estate broker determines the
 probable selling price of the property by analyzing various factors, 
including but not limited to comparable properties in the area.  
Broker Price Opinions are generally prepared for a fee.  Recently, 
the Department of State clarified that only a real estate broker 
can collect a fee for preparing a BPO.  Accordingly, real estate 
salespersons and associate real estate brokers cannot receive 
compensation directly for preparing a BPO.  The fee for preparing
 the BPO would be paid to the real estate broker and the real estate 
broker, would, in turn, compensate its salesperson or associate broker.

By: Neil B. Garfinkel, 
REBNY Residential Counsel