Monday, September 10, 2012

Topics: Tale of the Tape, 1142 Dean Street

Readers of the blog and serious buyers in Crown Heights are no strangers to the 2-Family frikkin' castle that is 1142 Dean Street.  After its sale last month, the listing broker Michael Corley contacted us to give a little behind the scenes glimpse into what he called one of the strangest sales he's encountered in 10 years of doing real estate.  Amidst rumors and broker hijinks, Corley had 40 showings and fielded 33 offers in 29 days, ranging from $750K to $1.095M, and was able to execute the sale at a very reasonable $930K in a timely manner.

We first entered 1142 Dean Street with Platinum Members on a freezing day in December last year.  The list price at that time was $999K.  We were told there was already an offer around $950K-$975K, and that any offers would have to exceed that for consideration.  We were floored by the beautiful interior, the size, the wood, the stained-glass windows, the pocket doors, the interior staircase giving the front bedrooms the entire width of the building, everything.  5 stories of amazingly-maintained beauty on a healthy 20' x 50' flooplate?  These pictures don't even do it justice:

Platinum Members passed on it, the existing offer went in contract, and late-comers thought they'd missed it.  But "it ain't over 'til it's over".  Contracts do fall through, and sometimes buyers get a 2nd chance at a place - as Platinum Members had when gems like 270 Sterling Place and 71 Irving Place had their contracts fall through.  In fact, as we speak, there are some Crown Heights winners back on the market ready for a 2nd chance.

Barbara Haynes, the listing agent at the time, notified us that the contract had fallen through and they were now accepting offers again.  But her time was up just a few weeks later, and Corley was commissioned to be the exclusive listing agent on the sale

Corley was reluctant to take the listing since he felt it had been overexposed.  Many are familiar with a version of the graph that depicts real estate activity is highest when a listing is new & fresh, and recedes as time goes on:

Corley says 75% of those interested in 1142 Dean during his time as the listing agent were people who had already seen it before.  Corley says he only takes listings that are priced appropriately, "not collect trophies".  He says his firm has never had a listing for over 90 days before executing a sales contract.

In addition to potential overexposure, there was a rumor-mill circling 1142 Dean Street.  Many had told us they'd heard stories such as "the seller held on to the previous bidder's earnest money deposit."  Corley adds that firms were spreading other rumors saying the seller couldn't actually convey title.  Corley tells us that it simply came down to a particular title company needed to be used because of a previous husband/wife conveyance that few title companies would touch.  So, whereas traditionally the buyer's attorney chooses the title company, the seller was designating the particular title company that could do this deal.

In addition to the rumors, this deal featured brokers behaving badly (any shock there?).  Corley received inquiries from brokers at major firms pretending to be buyers.  These joker brokers went as far as to create fake e-mail addresses to perform their sneaky operations.  Some even tried negotiating with the owner directly, even though Corley had the exclusive - a huge no-no in the highly-regulated world of REBNY (the real estate board to which those brokers belong).  One by-product of these hijinks was a dispute as to whose buyers were whose, which is an easy trap in this industry even when things are done with more transparency than sneakiness.  In the end, however, Corley ended up co-broking the deal with a fair commission split with some of the very joker brokers misbehaving.  Compare that to your brokers running around with questionable methods for assuring themselves as much commission as possible by angling for both sides of the deal, while failing to honor their fiduciary responsibility to their clients.

How on Earth did an offer of $1.095M get passed up in favor of a $930K offer?  The highest offer was contingent on another sale, which is a huge no-no, especially after a commitment letter and contract had fallen through previously on this deal.  Other bidders who had come up from $850K to $935K at the last minute were already too late to the party when Corley had a firm offer the seller was ready to proceed with.  Yes, that's right, even during the exact same time that the smaller, jankier 1139 Dean Street came out directly across the street for $1.149M and went in contract in a matter of weeks, some people still thought it was time to bid $750K-$850K on 1142 Dean.  In the end, the sellers even threw in the pool table as one of the negotiating pieces, and everyone was happy:

It's refreshing to see a truly professional broker who's actually working in the best interest of their client, and not worried about petty details like co-broking affecting their bottom line.  A lot more than we can say for some of these folks - even at the top firms - giving the industry a bad name.

1 comment:

  1. I cosign on the Corleys -- they're some of the most upstanding and honest brokers I've ever met. Michael was the seller's broker when I was buying a place in South Crown Heights, and now I'm glad to say that he and his family are my neighbors.

    The Corleys sure see a lot of interesting deals in the 'hood and I'm glad they were able to get this one nailed down too. Interesting story!