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The Real Deal Webcast: Changing brokers in an effort to sell apartments faster

In a Webcast last month, The Real Deal's Jen Benepe spoke to Paul Purcell, partner at real estate consultancy Braddock + Purcell, and Frederick Peters, president of Warburg Realty, about sellers who are choosing to switch brokers in an effort to sell their apartments faster during the downturn.

Log on to www.therealdeal.com to see the segment and to access the archives. Every week, The Real Deal posts a new edition of the Webcast, which features exclusive interviews with industry insiders.

The Real Deal(Voice-over): In the fourth quarter of 2008, days on market for condos and co-ops in New York grew by more than 20 percent when compared to 2007's fourth quarter. That means many more apartments are languishing.

Paul Purcell: I think any time when a market starts to shift, you see a lot of things start to happen, and we are seeing, that in this less-than-perfect environment, that people are a little nervous, and they're searching for what the right thing to do is. And sometimes that involves switching brokers.

Frederick Peters: Frequently, when the market gets tough, sellers believe, for some reason, that they're going to do better if they move from one exclusive agent to another. And we're seeing more of that these days.

TRD: Experts say that because of a slow market, the six-month exclusive relationships have a better chance of expiring before the property sells.

FP: You know, two years ago, there was practically no such thing as an exclusive that stayed on the market for six months. Now, that's becoming more the norm. I would still say it's probably 10 percent of the exclusives where I'm seeing it happening, but that's a lot more than [what] was happening two years ago.

TRD: And because the market is so slow, experts say it doesn't matter how good or bad you are — the client might jump ship anyhow.

FP: Certainly there is a psychological element in which sellers do sometimes just begin to experience what, for lack of a better term, we could call broker fatigue.

TRD: But if repricing fails to retain the customers, sometimes switching brokers is necessary and is not always a bad thing.

PP: Now more than ever, it's very important for the broker to communicate up front precisely what they believe is going to happen. If we get lucky and something sells very quickly, that's a godsend. But in this market, educating the seller as to what they can expect to happen, how long it's going to take — that'll stave off a lot of the problems you might have.

TRD: In one case, Purcell's partner, Kathy Braddock, considered replacing the broker for a family property, though in the end, Purcell advised against it.

PP: This isn't just Kathy; it's the family saying, 'Do we need a shift?' The market started to get away from us, and we became a dog chasing its own tail a little bit, trying to find where we should be.

FP: What I'm telling my agents is that prices are basically at '04-'05 levels, depending on the inventory, and that if you bought in '07 and you have to turn it around now, you're going to lose money.

TRD: Our experts agreed that a company with creative marketing and online expertise will definitely have an advantage.

FP: If you're a very small company, which can't offer much of an Internet presence, it seems to me likely to be disadvantageous.

PP: I also manage the expectations of my sellers. I want them to know what a good broker does, how they are worth their weight in gold. The good ones make us look so incredible, because they really provide this tremendous value. They are not just opening a door. They also are excellent in negotiation [and] at marketing. All these skills come together.

Compiled by Sara Polsky