Editor’s note: This article is reposted with permission by The Real Deal. Click here to view the original article.

By CANDACE TAYLOR

NEW YORK CITY — During the boom, New Yorkers increasingly relied on price-per-square-foot as a way to compare rapidly rising apartment values.

The metric is even more popular in the downturn, as discount-crazed buyers look for good deals.

But price-per-square-foot isn’t as reliable a measure as they think. Unbeknownst to many shoppers, it’s extremely difficult to determine the true square footage of a Manhattan property, experts say.

“When it comes to square footage in New York City, it’s the Wild West,” said Bill Staniford, the CEO of real estate data Web site PropertyShark. “It’s measured in so many different ways.”

And in the current downturn, the difficulty of determining square footage is contributing to a number of other problems, from low appraisals to ruined deals.

Staniford, who constantly fields questions from brokers about inaccurate square footage data on file with the city, said using price-per-square-foot as a measure of value is “totally pointless.”

That puts “every single broker in a very difficult situation, unless they want to break out the measuring tape,” he said. Even then, they might still be wrong.

It’s fairly easy to determine the square footage of a suburban single-family home: measure the footprint of the house, factor in the number of stories, and you’re done.

Manhattan apartments are a different story.

The square footage of an apartment is determined by measuring the space between the interior walls, including bathrooms, closets and foyers, explained appraiser Jonathan Miller, president of appraisal firm Miller Samuel.

But Manhattan apartments, especially prewar co-ops, often have hard-to-measure elements like turrets, winding hallways and oddly shaped rooms. Miller said buildings like 455 Central Park West, with its its large, circular turret units, are especially difficult to measure, along with notoriously elaborate buildings like the Dakota and the Osborne.

In many apartments, “you could have different people measure and they’d get five different numbers,” said Douglas Heddings, founder of the Heddings Property Group at Charles Rutenberg Realty in New York City, who has written about square footage challenges on his blog, TrueGotham.com.

To make matters worse, there is often little or inaccurate square footage data on file with the city. When buildings were converted to co-ops in the 1980s, they were not required to list the square footage in their units in the offering plan, Miller said.

Condo offering plans are required to list square footage, but each developer measures it differently, which is legal as long as they disclose their methods in the plan, Miller said.

“Many developers, in order to drive down the price per square foot, include portions of common hallways or elevators shafts,” he said. “Some include a percentage of outdoor space.”

Moreover, when units are combined or renovated, changes to the square footage are often not updated in the public record, he said.

As a result of all these factors, brokers in the past often avoided stating the square footage in their marketing materials. “Years ago, you really sold by the number of rooms,” said Diane Ramirez, president of Halstead Property.

In 1998, the buyers of a $2.5 million co-op at 983 Park Avenue backed out of their contract and filed suit against the seller and broker Stribling & Associates. The buyers claimed they were told the apartment was 3,300 square feet, but that it was actually closer to 2,800 square feet.

The case was settled out of court for an undisclosed amount in 2000, according to the New York Times.

After that, some firms explicitly forbade their brokers from telling buyers the square footage, for fear of litigation. “For years, we would not allow agents to put square footage [on their listings], because we knew it was fraught with danger,” Ramirez said.

But as more new condos sprang up during the boom, with their dimensions listed in the offering plan, buyers became more and more interested in square footage.

“They love hearing what the square footage is,” Ramirez said. “It became a number and an analysis that the consumer liked.” These days, price-per-square foot is a popular measure of value, even in co-ops, because it’s the best way of comparing apartments with the same number of rooms but vastly different dimensions.

“Price-per-square-foot is really what drives the understanding of value for consumers,” Miller said. “It’s really the language of the market.”

That’s forced many brokers to start using square footage data again, but nearly all real estate companies now have disclaimers stating that representations of square footage are just estimates, said Pamela Liebman, CEO of the Corcoran Group.

Brokers, perhaps emboldened by this disclaimer, often round up or simply exaggerate square footage in their listings, experts say. Miller said that when he appraises apartments, he usually finds that the apartment is 5 to 10 percent smaller than advertised.

Co-ops, in particular, often appear to get larger each time they are sold.

“If you look at any given co-op, you will often find that it has grown,” Heddings said. “A 650-square-foot one-bedroom in 1980 may now be 900 square feet.”

Recently, Richard Hamilton, a senior vice president at Halstead Property, was marketing unit 16B at 201 West 16th Street in Chelsea, a one-bedroom apartment that, according to his calculations, was just under 700 square feet. He was displeased to discover that an identical apartment on another floor — number 4B — was listed at 800 square feet.

Hamilton’s floor plan said that the living room was 20 feet by 13 feet, while the brokers for 4B, Adrian Castillo and Glenn Minnik of Prudential Douglas Elliman, used a floor plan that put the room at 20 feet by 15 feet.

Hamilton said he used the building’s original floor plan and double-checked to make sure it was accurate. “It’s quite obvious that it’s 13,” he said. “Anyone could have looked in that apartment and known it was not 15 feet wide.”

Minnick said he used the square footage information that had previously been in Elliman’s system.

“That was what was in our listing system,” he said. “We just add photos to it.”

He disagreed with Hamilton’s assessment, saying the apartment is “definitely larger than 700 square-feet.”

He emphasized that square footage estimates are “very subjective.”

Hamilton said brokers who strive for accuracy are often penalized, because buyers want the apartment they believe is larger. “I do my best to be as honest as I can,” he said. “But sometimes by telling the truth, you look bad, because they want to see the bigger apartment.”

To avoid that situation, he usually avoids listing the square footage, instead handing out tape measures at his open houses so buyers can measure for themselves.

Aside from potential litigation, differing interpretations of square footage have further ramifications in the current climate. If the bank’s appraiser or attorney finds that an apartment is smaller than advertised, it could torpedo the deal, said Melanie Lazenby, a senior vice president at Elliman.

“The last thing you want when you think you have a deal is a surprise,” said Lazenby, who relies on the figure in the offering plan or, for older apartments, hires a professional to draw up new floor plans. “You don’t want that call asking why there is a discrepancy. It could change the price of the apartment.”

Lack of accuracy in square footage is one reason so many deals are falling apart due to low appraisals, Miller said.

To determine the value of an apartment, appraisers look at the prices of nearby apartments of a similar size. But if the square footage of those comparables have been exaggerated, that can hurt the value of the apartment in question.

“They may be comparing four 1,200-square-foot apartments, but only one is actually 1,200 square feet,” Heddings said.

Miller said most experienced local appraisers are aware of these discrepancies and use floor plans, not broker data, to compare sizes. But more and more out-of-town appraisers are now doing work in Manhattan thanks to recent guideline changes.

“When you see out-of-town appraisers, they’re just relying on the broker square footage because they don’t have the floor plans,” Miller said. “It unfairly penalizes the subject apartment.”

Against this backdrop, how should brokers proceed?

“The best thing to do is talk about it as, ‘this space costs x,’ and don’t worry about the square footage,” Staniford said.

When an owner decides to sell his/her home, they’re in for a lot of work. You have to talk to interested buyers and schedule showings before you even get to negotiations and contracts. More frightening is that the seller has to open his door to people he doesn’t know, which can be scary.

The homeowner is definitely taking a risk by inviting strangers into his/her home. You have to be extremely cautious of who’s looking at your home. There’s a safety factor involved when marketing your home. A word of caution to homeowners wanting to sell is to be extremely careful!

There are precautions you should take to maintain safety for you and your family. In our society, people are usually afraid to ask questions because they don’t want to offend the other person.

Before you let that person go through your apt, get some information and then schedule a time when they can come back and look. This gives you time to check out the prospective buyer.  It’s also recommended that the homeowner ask for a pre-approval letter by fax or email before the showing. Here again, check the information on the letter. Call the mortgage company and ask questions.

With all the work it takes to sell your home successfully, don’t take chances with your safety!

FSBOs accounted for 13% of home sales in 2008.  As a National Average, the typical FSBO home sold for $153,000 compared to $211,000 for agent-assisted home sales. NAR Quick Stats

84% of FSBO’s eventually hire a Realtor

85% of buyers use a Real Estate Professional to guide them through the process. 2008 NAR Profile

87%  of buyers use the internet as their primary method of searching (no secret here, is your online presence getting you traffic from buyers?)

There is a reason why owners who sell on their own statistically sell for less!  There are savvy buyers looking for By Owner listings because they will expect a discount.  They know you are not paying a commission and this will attract bargain hunters and speculators.  Since the majority of qualified buyers work with a Real Estate professionals, you will have the best results working in the pool with the most qualified buyers.

Where are current interest rates?

What have similar apts in your building (or nearby) sold for? Very important – do not confuse with what they are asking…

What happens if my home does not appraise for the selling price?

Do I have the managing agent information and board package?

What will potential buyers need in order to pass the board requirements?

How long will the sales process take my apt?

What taxes will I or my potential buyer need to pay for?  (both fedaral/state taxes & building taxes)

What Federal & State laws do I need to follow in order to sell?

How much in taxes can I expect to pay after the sale? (both fedaral/state & building taxes)

What tax implications will the buyer expect to pay? (both fedaral/state & building taxes)

JoeDNYC

The reason Realtors are calling is simple.  We want to list your home and get paid a commission (you didn’t think I’d be that honest and direct did you?) Hopefully a trusting relationship can be built between us!

In general, there are two groups of Realtors that will call you.  The first group are new agents trying to drum up some business.  This group is in the under 2 years in the business category.  9 out of 10 Realtors try calling FSBO ’s once or twice (or as many times as their trained) and then never do again.  The second group are the old pro’s & (like me) have established the FSBO market as a primary prospecting source.  Yes, lots of owners do list their homes with me after giving it a shot on their own.

On the whole, it can be said that if you ever did decide to use a Realtor, those that make themselves known to you are the most motivated and aggressive and deserve a shot at it; over those that sit and wait for business to fall in their lap!  If I were you – I would pick from this group that is motivated and aggressive to do a get the most amount of money for their clients!

Now, there may be some realtors that you find that you don’t want to deal with.  Telling them that you’re not interested probably won’t stop them.  The best way to get them to stop calling you is to tell them you have an agent you’re working with.  Feel free to use my name!  Most will stop right there.  A well-trained agent might offer just to give you a second opinion.  If you don’t want them to call back just say “no”.  You’ll probably never hear from them again.

This is how I feel about it – I would turn away any agent who insults your intelligence, doesn’t respect your “no” or in any other ways turns you off.  There are too many honest, good, hard-working agents to pick from to bother with any whom are not up-front from the start.

One thing that you may hear is ” Would you cooperate with a Realtor if I had a buyer?”  There is nothing wrong with that.  What the agent means is that if they happened to find a buyer that was a match with your home would you pay them a commission.  The amount of this commission would be negotiated with the Realtor.  This won’t hurt you a bit, as there is no listing contract or formal arrangement unless the agent actually brings you a buyer.  Then you would have to come to an arrangement.  Don’t count on this actually happening however, national surveys have shown that this only happens in less than 3% of the cases!

This relocation number is up from the 11% reported in 2007, when the local unemployment rate was less than half of today’s and the city had over 128,600 more jobs, according to the New York state Department of Labor.

“There’s this uniqueness of New York,” explained Ed Witherell, the New York market vice president of Right Management. “There is a great deal of opportunities, beyond your industry and beyond the function you may be performing.”

Mr. Witherell said the ranks of relocators is lower here than many people might expect because the city is home to scores of significant technology, publishing, financial, media and fashion companies, and individuals want to pursue the opportunities in their backyards. People are moving to New York for the same reasons.

The survey did not include information about job seekers coming to New York, or break down the areas of relocation by industry or demographics.

The relocation rate from New Jersey increased to 13% from 9% in the same period; meanwhile, 7% of job seekers are leaving Long Island, from 4% in the last survey. The nation’s average of 15% remained constant.

Of the surveyed 27,000 individuals nationwide, 3,000 were from the Northeast.

http://www.crainsnewyork.com/article/20100224/FREE/100229940

We invest large amounts of time with buyers.  The key component to successfully working with buyers is the qualifying process. Qualifying is the lost art of the sales process. Sometimes we get so excited that we have a lead that we fail to determine its value. That is why the process of qualifying is focused on determining the value of leads.

To really have effectiveness in qualifying we must develop a series of questions. This series of questions or script has to be used every time. Every buyer must be evaluated on his response to these questions. Some examples of questions are:

How long have you been looking? If they have been looking for six months the motivation to buy may not be very high.

Do you need to sell a home before you can buy?  If you have to wait for their home to sell, how will this impact you?

Have you met with a lender?  Figure out if this potential lead get qualified to buy your home.  Email me at jdelorenzo@citi-habitats.com for Mortgage referrals.

Are you committed to another agent?

How soon do you want to be in your new home? This question will tell you the buyer’s motivation. Time frame and motivation are linked together. The longer the time frame the lower the motivation.

Determining the time frame and motivation are critical to selling your home.

Make sure that you qualify everyone you work with before you invest your time. Time is your most precious asset. Don’t invest it where it doesn’t bring you a return. I guarantee that if you took the time you waste with unmotivated people and invest it at home with your family the return would be like no other.

Joe D Review: Good article, lets see what happens in 2020!

The year is 2020 and the Johnsons just found out that they will need to move. It seems that Sally can make more money but her employer wants her to reside in an exact geographic location instead of working in a virtual office like most people do.

The Johnsons will need to sell the house, which is easy to do. The Johnsons call the cleaning service and the videographer and order a complete scan.

Once the Johnsons have all of the information together they send the information along with video to the National Homes For Sale Database (NHFS). The data is inspected, certified and deemed to be accurate and guaranteed by the U.S. Department of Information (USDI).

On the other side of town, the Smiths just found out that they will be having a baby. After discussing it, they decide that they are ready to buy a house.

Jim Smith has already put the parameters for the type of house they want into the “Realto-Magic” system, which is part of the NHFS created by an organization called NAR, which no longer exists.

The database now belongs to homes.org, a nonprofit consumer protection agency. NAR sold it to pay the rent. When the system finds a match, the Smiths will be notified. If they don’t find a match they may need to change their parameters or wait a while.

They have already sent their secret code and credit-chip information to the lending company, and know how much money they can borrow.

The next day while Jim is watching the house-bot cleaning and sanitizing the kitchen, an alert comes in through the household computer, indicating that there is a home for sale that meets their needs. Jim is excited and relieved because he thought the refrigerator might be sending out alerts again, and he wasn’t in the mood to call the landlord again.

The house is shown on the screen, and Jim looks it over and finds that the price of the home is in their affordability range. After looking at the 3-D tour of the home and the surrounding area, the disclosures and the complete scan, he decides that they should see it.

The pictures are all in high-definition 3-D, and there is no need for special glasses. Jim can move around in the images and he can zoom right in on the crack on the foundation and get a measurement. He can move around the block and across the street. He can clearly see that the next-door neighbor has a golden retriever, likes to grow geraniums, and has a swing set in the back yard and an infant seat in the solar-powered hover car parked on top of the garage.

He presses the “appointment-o-matic” button and puts in his secret ID, and then selects the time he would like to see the house. A small plastic disk comes out of the universal printer thingy in the wall, and the word “confirmed” flashes across the screen.

The following Saturday the Smiths go to look at the home. They get to the front door and stand by the door machine so their retinas can be scanned, and then Jim slides the plastic appointment disk into the reader.

As the door opens a voice says “Welcome, Mr. and Mrs. Smith, the Johnsons are not at home but please come in, remove your shoes, don’t let the cat out, and ignore the crying baby in the closet.”

Near the front entryway is a screen with information about the home, including the results of the last house scan, which looks very good.

As Jim touches the images of the appliances, they tell the Smiths how old the appliances are and when they were last serviced. It is the same information they already saw, but most buyers like to see it in person.

The Smiths walk around the home and decide that it is perfect for them.

Jim presses a button indicating that he has reviewed all of the information. He has one question: “When do the Johnsons want to move?”

The computer responds with a list of dates. Jim says “Sept. 15,” and the computer says “yes.”

When they get home, Jim brings it up on the screen of the household computer and slides the disk that was printed when he was approved for a loan into the slot thingy on the wall. He then uses the plastic disk that he got so that he could see the house into the same slot.

Thirty seconds later the word “Congratulations” flashes on the screen. The Smiths’ offer is accepted. The Johnsons will move out next week and the Smiths will move in a day later.

When the Smiths move in the bank will be alerted by the computer as they unlock the front door, using a special key. At that moment, funds will be transferred into the Johnsons’ account, the locks will be changed, and the printer thingy will generate a new key and the automatic mortgage payments will begin.

The transaction is smooth because all information about the home is in a database and the value of each home is kept up to date. The exact condition of the home, including any defects, are known because of the scan.

The history of the house can be looked up on the “interwebs” and will show insurance claims and any money that was spent making improvements on the property, when they were made and who made them, and whether any warranties are available with the press of a button.

Technological advances made it so buyers and sellers got what they always wanted. They could quickly and safely buy or sell a home on their own, without paying a human third party, because by 2015 an app will have been invented for everything except drinking, smoking and sex, but by 2025 that will change too.

By 2015 there will be apps for everything except drinking, smoking and sex

http://www.inman.com/buyers-sellers/columnists/teresa-boardman/i-can-be-replaced

By Teresa Boardman, Wednesday, February 17, 2010.

Inman News

Teresa Boardman is a broker in St. Paul, Minn., and founder of the St. Paul Real Estate blog.

The perennially delayed plan to transform New York City’s main post office into a transportation hub got a boost Tuesday when Sen. Charles Schumer announced an $83.2 million federal grant to jumpstart the project.

The money, which comes from the stimulus package, will help finance the first stage of the project, which proposes turning the Farley post office into a new train station, to be primarily used by Amtrak, which will be connected to Penn Station. The project, which will be called Moynihan Station, also includes adding a grand hall and retail stores. It is named after the late Sen. Patrick Moynihan, who championed the project.

The federal grant means there is now enough money to start the first phase, which will cost about $220 million and take five to six years to complete. It includes expanding access to the various train tracks, creating two new entrances to the Farley building, and adding elevators, stairs and escalators.

“We’ve got the money now let’s get to work,” said Mr. Schumer, in a statement. “The best way to get New York’s economy moving again is to keep building, and the best project to get things started is Moynihan Station.”

The second phase, which is expected to cost between $1.5 billion and $2 billion, calls for renovating Farley and adding the retail space and creating the grand hall.

By Theresa Agovino

http://www.crainsnewyork.com/article/20100216/FREE/100219928

The real estate and construction industries have started a full-court press, including a Web-based petition, to resurrect plans to build a stop at West 41st and Tenth Avenue for the extension of the No. 7 train line.

Over the weekend, the Real Estate Board of New York launched a Web site—BuildTheStation.com—so people could sign a petition to encourage elected officials to finance the stop. Currently, the line will only include one new stop, at West 34th Street. This week, both residential and commercial brokers are expected to ask tenants in buildings on the far West side near West 42nd Street to sign petitions.

There were plans to build a shell for a station on West 41st Street and then go back and build out the stop. However, a couple of months ago, plans to build the shell were abandoned.

Steven Spinola, president of REBNY, says a lot of area residents don’t even know the plan to construct the shell have been shelved so the petition is an attempt to raise awareness and spur people to contact elected officials. Mr. Spinola says three construction trade organizations will be encouraging their members to sign the petition and contact elected officials. They are: The Building Congress, the Buildings & Construction Trades Council of Greater New York and the Building Trades Employers’ Association.

“We think it is critical that the station be built,” Mr. Spinola said. He added the stop is vital to the continued development of the far west side, noting several developers such as Larry Silvestein recently built new residential properties nearby.

The project would also provide much needed jobs to the construction industry, which has been especially hard hit by the recession as development came to a halt.

Mr. Spinola said the industry has already reached out to the state’s two U.S. senators to ask for federal help building the station. He added that signatures will be collected over the next couple of months and will be presented to various officials and agencies sometime before May, when a major building contract for the extension will be awarded.

“We’ve been told it would cost a lot more money to go back and build the station later,” Mr. Spinola said.

Correction: An earlier version story mistakenly said the new subway stop would be located on West 41st St. and Ninth Ave.

http://www.crainsnewyork.com/article/20100216/FREE/100219925