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Mastering the market
<span style="font-style: italic;">During tough times, brokers turn to new strategies</span>
In the summer of 2008, no one could have foreseen how much the real estate industry would change in only a year. Prices that once accelerated at a dizzying pace are now declining. Sales volume and rental transactions have been cut in half. Commissions are smaller and brokers’ fees paid by renters are largely a thing of the past. New developments, once the city’s most sought-after properties, are now nearly impossible to sell amid a credit crisis of epic proportions.
The industry’s remaining agents have been left to pick up the pieces and adapt to a radically different world. Surprisingly, many have done so with gusto, adjusting their business models to fit the new environment.
Brokerage Citi Habitats, for example, recently launched a new “Elite Rentals” division for high-end rental apartments, hoping to capitalize on homeowners’ need to rent their apartments after being unable to sell them.
Company president Gary Malin said the brokerage has seen an increase in total transactions every month of 2009 versus the same month of 2008.
“Our agents are overwhelmed with the amount of rental business, far surpassing their expectations, proving that the rental business can thrive in any economy,” Malin said.
This month, The Real Deal dissected the new rules of real estate in a drastically altered landscape, uncovering techniques and strategies never before seen in Manhattan.
First, sellers frustrated by lowball offers and elusive mortgages are demanding to see detailed financial information before allowing potential buyers to view or make offers on apartments for sale. This means buyers’ brokers have to be more skilled than ever at extracting sensitive financial information from clients without losing their trust.
Other agents are adjusting to the new market by preparing to work for a new taskmaster: the bank. For the first time since the 1990s, banks are hiring New York City real estate firms directly to sell struggling new development projects.
When it comes to rentals, a new breed of concession-hungry, demanding tenants are trying landlords’ patience, but agents are learning to navigate the new rental landscape.
And finally, some brokers are employing these techniques so successfully that they’re doing even better than they were last year. The Real Deal talked to a bunch of these agents to find out how they’re doing it.