As “Million Dollar Listing Los Angeles” was picked up for a seventh season, the reality show’s three stars stopped by The Real Deal’s offices to cogitate on matters of a less glamorous nature: real estate attorneys and septic tank woes. More important, Josh Altman of Hilton & Hyland, Josh Flagg of Rodeo Realty and Madison Hildebrand of Coldwell Banker chatted about what a New York City broker needs to know to make it in L.A., and whether the brokerages contemplating a West Coast expansion can beat them on their own turf.
What are the real estate issues in L.A.? Lack of inventory? Rising interest rates?
Altman: As far as interest rates go, they don’t really affect our clients.
Are people rushing to close? Or are there a lot of all-cash buyers?
Altman: We’re seeing a lot of all-cash, overseas clients — Russian, Saudi, Indonesian, Chinese. And yeah, the rates are still very low so people are excited; they’re buying right now.
What percentage are cash buyers?
Altman: For me, probably 60 percent.
And what do foreign, high net-worth individuals value that may be different than other high-end buyers? Do you have to convince them to try certain neighborhoods?
Altman: Well, I think that everybody worldwide always wants to be as close to Beverly Hills as possible. It has such a reputation of … a safe investment. A lot of people ask me, “How close is it to the Beverly Hills Hotel?” That’s kind of like the center of the map; if it’s five minutes sure, they’ll look at it; if it’s nine minutes, they won’t look at it.
What about views? Do buyers want to be as high in the Hills as possible?
Flagg: Not when it gets wind-y. [But] the flatter parts of the [Hollywood] Hills are more desirable than anything. [In Trousdale, Beverly Hills], if you go about halfway up the hill, you’ve got phenomenal views and it’s not too high.
What do you think about New York City brokers honing in on your market? Do they ever try to bring their client over and do the deal?
Hildebrand: They can’t really unless they’re licensed there [L.A.]. And here [in New York] you guys use attorneys to close the deal; all [the broker does] is put the deal together. In L.A., we would use an escrow company and we seriously manage every step of that deal until it closes. They’re definitely totally different animals.
Madison, do you ever interact with the Coldwell Banker office here?
Hildebrand: No. They have a very small presence here in New York but they certainly plan on expanding. … New York has been gripped by Douglas Elliman … But it’s really about who the right fit is for the client for me.
Altman: I’ve sold things though partnering up with people here.
Who have you partnered up with?
Altman: I’ve partnered up with the Alexander Group [headed by Oren Alexander of Elliman]; I’ve partnered up with Fredrik Eklund [of Elliman and “Million Dollar Listing New York”].
What do you need to know to work in L.A.?
Flagg: It’s the same thing in the sense that one block can be a completely different neighborhood than another one and you really have to understand the area you’re selling in — the difference between a five hundred block and a six hundred block.
Hildebrand: We have geology issues, we have septic tanks…
What’s a septic tank issue that you’ve had?
Hildebrand: [Laughs.] It’s Malibu’s dirty little secret. There are a lot of properties with septic tanks. It’s very expensive and now they’re making everyone take the septic tanks out if they fail. And it’s $120,000. The government is getting more involved with every deal, as it seems.
Is landmarking an issue in L.A.?
Flagg: I am totally in favor of [landmarking].
Flagg: Absolutely … Just don’t tear down magnificent architecture.
Hildebrand: But you also are so limited in how you can modify it.
Flagg: Not really, [the restrictions are] mostly [for a home’s] exterior. But also, why would you want to remodel it? I mean you want to have the conveniences of tomorrow but you want the higher ceiling of yesterday.
Altman: I have a huge buyer pool of people who appreciate the history of a property. I have a listing for $10.6 million and it’s called the Dorothy Chandler Estate [in Hancock Park]. Five presidents have stayed there. … I have showings all day to people who are looking for something special like that.
What is most important to L.A. buyers at the moment?
Hildebrand: They really want a finished product; if they’re going to remodel it, they want a steal. The flipping market has really slowed; I would say [only] about 15 percent of my clients now are [looking to flip].
Altman: Views, views, views are the top thing people are looking for right now. In the Hollywood Hills, in Trousdale, [homes are] selling for north of $3,000 per square foot. This is something that L.A. hasn’t seen [previously].
Do you have buyers coming from New York?
Hildebrand: A lot of people have actually said you know, “I’m tired of the Hamptons, I’m tired of Miami,” and Malibu is a chic West Coast place to be.
Where are you in terms of getting back to pre-recession pricing?
Hildebrand: I can [only] speak for Malibu — I sold a house for $4.5 million and three years later I sold it for half. And now I could sell it for somewhere in between.
Are you guys ever competitive with the “Million Dollar Listing New York” folk?
Altman: I watch it just because I like seeing other people’s selling styles.
Do you ever have to talk your clients into being filmed?
Hildebrand: I can say that from the show’s conception, it was very difficult, for me, to get people to put themselves out there on a show that did not even exist. And now we have people coming to us because they want to be on the show. But … Charlize Theron, I would have loved to put her on the show, but it’s an absolute “no,” across the board. Tyler Perry did let me shoot his property, but of course he [personally] would not appear on camera.
What’s the best neighborhood in L.A. in your opinion?
Flagg: Beverly Hills, the Sunset strip. Trousdale.
Altman: I like West Hollywood. In the flats, [around] Robertson [Boulevard]. It’s as close to New York as you’re going to get.
Hildebrand: I like Malibu Road in Malibu, because it’s [the quintessential] beach-neighborhood street.
What’s the 1970s Soho of L.A. — the area that’s cheap now but will be super expensive in 20 years?
Altman: I think we’ve seen some good growth in Culver City.
Hildebrand: And I would also say Venice [Beach] has been emerging, but it was all based around Abbot Kinney [Boulevard] and now it’s Rose Avenue.
What do you think about Elliman setting up an L.A. office?
Hildebrand: Good luck. There is a lot of competition, and they’re not an L.A.-known brand. When they get there, if they don’t really have great agents, then we will end up with … their clients.
Altman: Yeah, in L.A. we’re more agent-based as opposed to company-based. So it doesn’t matter what company we work for. [Although] I think the high-end buyer pool is familiar with Douglas Elliman or Nest Seekers.
That’s right, Nest Seekers is rumored to be coming to L.A. as well.
Altman: It’s not really going to change. It’s going to be the same agents [competing for top listings].
Hildebrand: People might just move around for different opportunities.
Do people try to lure you away with better splits?
Altman: Yeah, all the time but … my company has been very loyal to [me] and I’m a loyal person. So offering me 5 or 10 percent more — it’s not about that.
What’s the most important thing you’d tell an agent starting out?
Hildebrand: For the young agents that see us on T.V. and the money we make, they need to understand that we film for 11 months to make about 20 minutes each on film. And it’s hard work. You’ve got to have money to invest in yourself, and you’ve got to have a marketing plan. And training — choose the company with the best training.
Do people think it’s easy because of what they see on the show?
Hildebrand: Yep, all the time. You have to be out there networking, and really working, and you have to have knowledge. Without [knowledge] you’re just wasting space.