The Madoff effect: Brokers get creative to unload property after the scam
April 01, 2009 11:57AM By Candace Taylor
The impact of Bernard Madoff’s $65 billion Ponzi scheme on Manhattan real estate will be felt for years to come.
Bernard Madoff was hauled off to jail last month and may never again see his $7 million Upper East Side penthouse. But the impact of his $65 billion Ponzi scheme on Manhattan real estate will be felt for years to come, as his victims look for ways to sell their spacious lofts and stately townhouses amid the worst housing slump in decades.
They, along with other sellers, will need to seek creative methods of unloading their properties. Strategies that served brokers well during the boom are now all but useless. In the wake of the Sept. 15 Lehman Brothers collapse, mortgages are scarce, jobs are disappearing and buyers are spooked.
"I call Sept. 15 'the Real Estate Sept. 11,'" said Jacky Teplitzky, a managing director at Prudential Douglas Elliman. "Everything changed. Valuation changed, marketing techniques changed; the way my team members do business had to change … fast."
In the new market, developers in particular found that the first round of incentives they offered to buyers — things like free closing costs, gift certificates, and 'price protection' programs — did little to assuage uncertainty. Brokers say that gimmicks don't work and that good, well-priced properties are now the only gold standard.
Still, sellers and brokers have gone back to the drawing board to try every technique to see what sticks. This month, The Real Deal looked at some of those 11th-hour strategies.
Some sellers, for example, are trying a new twist on sealed-bid auctions to quickly make deals. Others are considering property swaps, where they would purchase a potential buyer's property to free them up for a deal.
Meanwhile, in a move that could change the face of new development marketing in the city, some sponsors are discarding the standard practice of hiring an exclusive sales firm and instead are hiring multiple brokers from different companies.
In addition, developers — who are not only dealing with the 180-degree turn the market has taken, but are also coping with the added challenge of Fannie Mae eliminating mortgage guarantees in condo buildings where fewer than 70 percent of the units have been sold — are also coming up with Hail Mary pricing strategies.
While many are discounting prices right out of the gate, for example, others are starting low and then increasing prices. By offering special low prices to early buyers, they hope to establish a critical mass of buyers — even if it means barely breaking even — before raising prices on round two.
And finally, short-term rentals are becoming increasingly popular as sellers take their homes off the market and developers recognize that they are not going to sell out right away. The hope, of course, is that the economy will improve sooner, rather than later, and that down the road, they can sell, or lock in high-paying, longer-term tenants.
Click the links below to read more on these creative strategies:
Raising prices despite the odds
Selling with sealed bids
Ditching exclusive contracts
Can't sell? Trade places or try short-term rentals
All stories by Candace Taylor
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Comments
Anonymous
I think it is incredibly disgusting to compare a minor and ultimately temporary dip in real estate prices to the murder of 3,000 New Yorkers. I think Ms. Teplitzky-Dobens and her company owe an apology to the families of the victims for that remark. Little wonder the vast majority of people think real esate brokers are scum.
Comment #1 Posted By: Anonymous 04/02/09
Anonymous
Jacky Teplitzky-Dobens is an idiot. Noone died Sept 15th, 2008. What an insensitive self-serving statement to make. You really will stoop to any level just to get into the press. You really need some serious media training. You need to think of better analogies (look it up).
Comment #2 Posted By: Anonymous 04/02/09
Anonymous
This is new? Joke
Comment #3 Posted By: Anonymous 04/03/09
Anonymous
It is pretty tacky to use the Sept. 11th analogy. The term is used so often that some less thoughtful people, of which J. Teplitzky appears to be one, simply forget what the term is referring to. I have never met Jacky but it is clear that she is just another self-serving, self-obsessed, "ethnic" broker.
Comment #4 Posted By: Anonymous 04/03/09
Anonymous
you stupid f?&%ing idiot, you should be ashamed of your self you came to this country to try to be someone now you got lucky with real estate you think your big shit ? comepare 911 to sept 15 when lives perished ? if your family was involved you would have never stated that remark! and by the way take some speech leasons please.
Comment #5 Posted By: Anonymous 04/04/09
Anonymous
The only reason brokers like Jacky Teplitzky is exist is because there are absolutely no standards in the real estate industry. There are many knowledgeable and conscientious agents at Douglas Elliman, however, all the public sees is this self-obsessed individual. As long as Dottie Herman & co will tolerate and glorify Jackie, there will be other 'aspiring to be her' brokers.
Comment #6 Posted By: Anonymous 04/05/09
Anonymous
Here's a novel idea to sell those properties. Lower the price by 60%. Keep dreaming if you think this is minor or temporary. Oh, and all this phony outrage over the 9/11 comparison. President Bush used it to sell his war and Rudy used it sell his business and his ambition.
Comment #7 Posted By: Anonymous 04/05/09
Anonymous
everyone is so uptight and politically correct. Jacky obviously was just comparing people dying to the real estate market dying. Its a fact - that's what happened..to character assassinate Jacky on such a personal level over her comment is cruel.
Comment #8 Posted By: Anonymous 04/08/09
Anonymous
I call Sept. 15 'the Real Estate Sept. 11,'" said Jacky Teplitzky, a managing director at Prudential Douglas Elliman. "Everything changed. Valuation changed, marketing techniques changed; the way my team members do business had to change … fast she is such an asshole
Comment #9 Posted By: Anonymous 04/09/09
Anonymous
maybe if we throw her out the window of the 89th floor of the Empire State Building, then she will have an appropriate analogy to 9/11
Comment #10 Posted By: Anonymous 04/09/09
Anonymous
I get discounts from hookers now, why should realtors be any different?
Comment #11 Posted By: Anonymous 04/10/09
Anonymous
I am a realtor and personally I cant wait to fuck y'all up again when market conditions return he he he he
Comment #12 Posted By: Anonymous 04/14/09
Anonymous
This Wall St. (and its supporters) scam will in the end cause more deaths, destruction and hardships that 911 did.
Comment #13 Posted By: Anonymous 04/15/09
Anonymous
Great Analogy. Let's get past the WTC occurrence. I was there - get a life.
Comment #14 Posted By: Anonymous 04/16/09
Anonymous
she's just a retarded broker meeting expecations with her foot in her tasteless mouth, but what illustrator read it, pondered it and then brought it to life??
Comment #15 Posted By: Anonymous 04/17/09
Anon
Geez people, its an expression...its in poor taste, granted, but its JUST an expression.
Comment #16 Posted By: Anon 04/20/09
Jenny
"The Real Estate September 11th"? Jacky, you are tacky!
Comment #17 Posted By: Jenny 04/22/09
Anonymous
#12, you will be giving $10 blow jobs in about 6 months.
Comment #18 Posted By: Anonymous 04/23/09
Anonymous
It's not an "expression" - it's a date, not even 8 years ago, when terrorists attacked our country and nearly 3000 people died in a matter of hours. Jacky Teplitzky shows herself to be tacky and uncaring to the city where she has made lots of money. She and Douglas Elliman should issue an apology.
Comment #19 Posted By: Anonymous 04/30/09