Sullivan County Real Estate Archives

Five Things to Never Say When Buying a House

Five Things to Never Say When Buying a House

Sullivan County Sellers

I do my best to make sure a seller is not at home when a buyer comes to look. In fact I insist that be the case when I list a house here in Sullivan County NY. When the owners are there, a prospective buyer feels like a guest. And it is difficult to imagine yourself "at home" in a property when you are busy feeling like a guest.

There have been many polls and studies done to corroborate this, but it seems that fairly often when I arrive with a prospective buyer, invariably the door is opened by a cheerful, smiling homeowner.

It is a delicate matter to traipse through someone's personal space. Taste is an individual concept, and many times a casual comment can hurt someone's feelings or reveal something that can hurt you in negotiations down the road.

So if you end up in the situation where you are viewing a home with the homeowner present, these are the five no-nos that if done, can put you at a disadvantage.

1) I can't wait to rearrange, move, rip out etc. A certain amount of renovation is expected, but you have to keep in mind that more often than not, the house you are looking at has a truckload of memories built up. That leopard print living room is where the Smith's had a decade of Holiday mornings and other special life moments. I have seen many sellers take a hard stance on price for personal reasons. You want the sellers to like you. For them to like you, you need them to think you like what they like.

2) Why are you selling? This one is a bigger one than you would think. And it is a very common question. I guess buyers feel it is a good ice breaker question, so it seems to be the fall back one. But often the reason they are selling is not necessarily a happy one. Change is hard for people. And selling the family homestead is often a big change. Many times the reasons are innocuous, like a job change or simply up or down sizing. But more often than not it is a hardship that necessitates the sale. Some sellers will bristle at the questions, and others will open up and pour out their issues. Either way, it can make for an uncomfortable moment.

3) This is my dream house! Or "Its perfect!" Or any variety that lets the sellers know how much you like the house. Look I'm not saying be dishonest or that there can't be open negations and everything has to be cloak and dagger, but why put yourself at a disadvantage. Every one hundred dollars borrowed in a mortgage is actually over three hundred over a thirty year mortgage. These negotiation tactics can save you thousands of dollars over the life of your loan.

4) I am approved for X amount. Same principle as number three. Saying you are approved for more than your offer can put you at a disadvantage for obvious reasons, but playing the "I am only approved for X amount so that is all I can offer" can also put you at a disadvantage. It can make seller nervous if they think you are maxing out the amount you can borrow.

5) You have a lovely home, but it is not for us because.. Again this is an over sharing moment. In recent polls, it was determined that 90% of home buyers knew a house wasn't for them within the first five minutes of being in the home. But you never know. Perhaps seller will drop the price in a few months, and suddenly changing the green shag carpet is now in the budget. A pleasant good bye is all that is necessary.

That is why having a good real estate broker is important. They can shield you from pushy sellers, or seller's agents, and guide you through the tour. Small mistakes can cost you thousands of dollars.

Gas Drilling Moratorium is not Force Majeure

Gas drilling in Sullivan County It has been almost eight years now since the gas lease rush really started here in upstate New York, and land owners fell over themselves to sign lucrative leases with various gas drilling companies for the mineral rights deep below their properties. (Some of these leases were ten years, but the majority that I have seen and heard about were five, with an “option” for more.)

But then New York State stepped in and declared a moratorium which stopped all gas drilling dead in its tracks. Many landowners thought that they had basically been paid for doing nothing, and the clock on the wall was counting down the length of the lease.

However people do not like to lose money, especially people who own big companies with lots of attorneys on retainer.

They had thought of a scenario such as this.

Most of the lease contracts have a Force Majeure” clause. Force Majeure means “unavoidable occurrence outside the control of both parties”. The gas companies argued that the moratorium should trigger the Force Majeure clause and essentially freeze the contracts at that point in time until the suspension has been lifted.

I ran across a gas lease issue during a deal where the buyer was attempting to purchase a house via an FHA loan with a gas lease attached. FHA’s setbacks and guidelines are stricter than the lease stipulated. The lease’s minimum setbacks were 150 feet from the dwelling, while FHA requires at least 200 feet.

It may seem like a bizarre stumbling block. A 50 foot differential on an obscure FHA rule about a potential gas well despite a statewide indefinite ban on drilling? Real estate deals fall through every day for just such ridiculousness. Ask any real estate agent. They would love to regal you with tales of lost deals over asinine and incompressible reasons. All of us have these battle scars. Common sense takes a back seat to procedure way to often in the mortgage/bank business.

Well what saved this deal? Actually it was an FHA underwriter with a bit of commons sense, but what persuaded him was a recent ruling from the Northern District Court. On two separate cases they have ruled that the NYS halt on fracking does not fall under Force Majeure. The clock really is still ticking, and on many of these leases, time is already up.

The lease on the property I was selling is up in Aug. 2015. After seeing the big picture, the underwriter determined that the chance of a gas well drilled within that 50 foot radius in the next four months was remote enough not to kill the deal. We closed last week.

Villa Roma Bone Marrow Drive

122 The second annual Villa Roma bone marrow drive is scheduled for this coming Friday and Saturday the 11th and 12th from 8 AM to 6 PM. Event organizer Faith Metzinger, who has spent the last 20 plus years working with children by providing childcare for local families has coordinated this event. She was once a donor to a little boy with leukemia, and that experience has inspired her to get others to donate. Last year she had close to 200 people show up and this year she is hoping to double that number.

"Our primary goal is of course to swab people, get them into the registry and then they'll be ready to donate if called. But a funny thing happened along the way…local businesses have said "How can I help?…"..and I asked them to give us gift certificates that we could give our guests. Here we are with several dozen restaurant vouchers, certificates for lawn services, bakeries, hair salons, live performances, pizzerias, fun park passes along with handmade items from local artisans. I'm thrilled to offer these to you all, just put your name in the bucket and we'll draw them all Saturday night at the end of our drive." says Faith on the Facebook page

It really is a good, potentially life-saving cause. Bone marrow donors are often the last hope for many people with blood cancers. According to Faith it literally takes 10 seconds to donate a cheek swab. Finding donors for these patients is fairly difficult, because your HLA markers must be very similar. On average about one in five hundred will go on to donate bone marrow or peripheral blood stem cells (PBSC) to a patient. And that is if you have a common tissue type. For some of these cancer patients, finding a match really is one in a million.

So whether you are a full time resident of Sullivan County, or just coming up for the weekend to enjoy the area, stop in at the Villa for a minute. You may end up winning a gift certificate somewhere, and you may even end up saving someone's life.

More facts on marrow donation can be found here

Lloyd Barriger Sentencing

Last week Lloyd Barriger was sentenced to five and a half years in prision for his illegal actions while managing a real estate investment fund here in Sullivan County.

I almost didn’t write this post. It has been covered and hashed out ad nauseam. But after reading the news reports over the last few days, I felt I needed to weigh in on this.

Lloyd Barriger ran Gaffken and Barriger LLC from 1998 until its untimely demise in 2008. The fund started out trading nano-cap stocks for a small number of clients, but like so many others, saw the potential of a real estate market on the rise, so around 2000, they changed their mission statement to “Invest, hold, and trade in real estate, real estate loans, real estate securities, other securities and other financial instruments and rights thereto.” Basically the funds strategy was to lend money to builders and real estate developers using high interest, short term bridge loans.

And at first, as the market continued to improve, things went swimmingly for Mr. Barriger and associates. Eight percent return on all investments became the mantra and were “guaranteed.” More and more people heard about this and kept forking over their hard earned money. The fund grew, and seemed solid.

Well, around the end of 2005, things began to go south. Many of the risky developers that had taken out loans with the fund, began to default. Suddenly they could not pay the promised eight percent. And so began the slippery slope of robbing Peter to pay Paul. New investor money was used to keep the illusion of the fund afloat. A classic Ponzi scheme.

By March of 2008, the coffers were empty, and the ruse could no longer continue. The fund was frozen, and people realized they had lost everything.

Maria Grimaldi, a 71 year old retiree lost her life savings in the fund. (She had contributed later on when Barriger knew it was a house of cards, but he took her money anyway.) She was forced to return to work, according to the Times Herald Record. I personally know another victim who was also forced to unretire once his entire nest egg disappeared into the Barriger abyss.

Mr. Barriger spoke in court, apologizing for his actions, saying he never intended for this to happen, and he was not prepared to face the challenges of running the fund.

In fact, a few of his supporters spoke up for him. According to the Times Herald Record, Ed Sykes Town of Delaware supervisor told the judge, “The real reason for Barriger’s downfall was the real estate crash.”

Now this is just a quote in a newspaper. I did not hear exactly what Mr. Sykes said, however if this quote is true, I find it absurd. Of course we all can do well when the sun is shining, and the real estate market is going up 10% a year. The real mark of a man is what you do when things are tough. And Lloyd Barriger made a conscious decision to defraud and lie. And he did not do it for a noble reason. He did it for greed. His downfall was not the real estate crash. His downfall was his lack of character.

Scores of people were affected by the real estate market crash. Thousands of homes were lost, fortunes disappeared, and lives were changed forever. And most of these people took the hit on the chin, dusted themselves off and kept trying. They didn’t steal from the elderly. To somehow make the excuse that suddenly he was in over his head, and the turn of the market is to blame is ludicrous.

“In the midst of the credit crisis, Barriger chose to lie about the solvency and liquidity of his fund rather than admit the somber truth of a collapsing business,” “He continued to solicit new investor funds based on the same misrepresentations up until the day before the fund collapsed.” George Canellos, Director of the SEC’s New York Regional Office. Securities and Exchange Commission vs. Lloyd V. Barriger.

Personally I think five and a half years is light. Bernie Madoff got 150 years. How is what Barriger did any less egregious? because there were fewer victims? Tell that to Ms. Grimaldi who in five years (when Barriger gets out of prison) will be 76 and will still have to go to work every day.

The Vacant Second Home Syndrome

Vacanthouse I was out last weekend with a Manhattan couple who is looking for a weekend getaway, so naturally our tour included a lot of homes being sold by people who only use (or used) their houses on the weekends. One of my buyers does interior design for a hotel chain, so I spent much of the day seeing the way he perceived the houses we saw, and what his vision is. It is always fun to spend time with someone who is vastly more talented and experienced in something that you have an interest in.

At any rate, by the third house, he made a comment about how neglected the homes we were seeing seemed. The houses we were viewing were in the 250K range, so they were by no means “handyman specials”, and most had little or no obvious deferred maintenance. It was more subtle than that, but it was obvious that most of the houses we saw were no longer being utilized much–if at all.

And since his observation, I have realized that I show quite a few houses that are in this state. Many of our second home sellers here in Sullivan County are selling because they no longer use the house the way they used to. When I go on a listing appointment I hear that over and over. “The kids are growing (or have grown) and they don’t want to come upstate nearly as much.” Or “we are getting older, and the maintenance, and the Friday evening drive is getting to be too much. We just don’t use the house like we used to.”

Whatever the reason is, many times by the time they decide to sell, the home has already been underutilized. And then once it is officially on the market, many times sellers stop coming up all together. Furniture is picked over by family members. Often only the oldest and most unattractive pieces remain. And those are scattered throughout the house in a haphazard manner. Just like a “regular” vacant house, a musty, stuffy environment sort of permeates the whole structure. If it is during the winter, many times the house is winterized, and a cold house is never a good selling feature. You want a home to be inviting to a buyer, and nothing is less inviting then freezing temperatures. Rodent activity can be evident, and other nuisances like hornets nests can pop up fairly quickly.

I think this second home vacancy syndrome is pretty unique to weekend/vacation areas like ours. It is almost like a watered down foreclosure market. You have semi-forgotten under maintained inventory that ends up depreciating faster than it should, and then invariably it sells for less than it could.

And just like with foreclosures I think that there is some opportunity for buyers here. Often it takes little more than a weed-whacker, some Pine-Sol and some elbow grease to bring these homes back to life. (Of course I am oversimplifying here but you get my drift.)

And also nothing screams “relieve me of this burden” more than a house in this state. And as long as the sellers are not up against a hefty mortgage, more times than not a deal can be struck.

Monticello Mayor in the News

Mayor Jenkins So I meant to weigh in on the Gordon Jenkins saga last week, but I didn’t get a chance to, and in the meantime, instead of this story dying, it has exploded , and the video of his drunken rantings has gone viral. It has given Monticello and Sullivan County a pretty negative fifteen minutes of fame, right at the moment when we probably needed it the least.

For the select few who do not know the story, the mayor of the capital town here in Sullivan County, Monticello, was arrested last week for driving while intoxicated. He was brought to the local police station where he was booked. While being booked, he went on a verbal tirade, rife with profanity, racial slurs, and vague, barely coherent threats towards the arresting officers. It really was a bizarre scene. Click here for the news story. If you want to sit through the entire three hours, search it on YouTube.

Apparently this is not Mayor Jenkins first run in with the law. He was arrested three years ago for selling knock off sneakers in his Broadway store and for possession of marijuana , and last year he was arrested for assaulting a Village police officer–one of his subordinates.

Most everyone now is calling for his resignation, however last report from the beleaguered mayor is that he has no plans on stepping down. So for now he will remain–a giant distraction and a negative blot on Sullivan County, only weeks after we have gotten the biggest and best news we have had in a long time.

I am not going to get into the racial argument on whether the backlash would be bigger, and the punishment swifter if Mayor Jenkins were white. Because it doesn’t matter. What does matter is Gordon Jenkins is not good for Monticello, or for Sullivan County.

Monticello has been a struggling town since I can remember. Broadway has some really nice old historic buildings, and yet 90% of them are shuttered. Forty two percent of families who live in the village are under the poverty line. To put that in perspective, Detroit has thirty-eight percent below the poverty line. Now obviously Detroit is much larger and in a completely different predicament , however it does show where our capital village is in comparison.

Another big difference Monticello has is one of the largest, (and richest) metropolises eighty nine miles to the south-east. And that city is filled with people who are just waiting for a reason to get in a car, or on a bus or train, and come to Monticello for the day, or the weekend or the summer and spend money. But right now they don’t. They drive right by. Exit 104 funnels visitors heading towards Bethel Woods, or the Chapin Estate, or numerous destinations in Western Sullivan County, right through Monticello. But what do these potential consumers see? They see broken down, abandoned buildings. They see a building complex half built, stuck in some perpetual construction zone year after year. They see a ramshackle building with a faded Johnny’s Topless Go-Go sign. Johnny’s has been closed for a decade. How hard would it be to get that sign down?

For way to long, residents of Sullivan County have looked at Monticello with an eye roll and a shoulder shrug. And that is what I am seeing with this Jenkins situation. “I don’t live in the village. “It’s not my problem.” Seems to be the sentiment.

But I think by having that attitude, we are doing a real disservice to our county. Monticello is the first impression many get when visiting Sullivan for the first time. Now many get past that by seeing what the rest of the county has to offer, but I fear that some do not get past it, and move on to a different county.

I realize the role of village mayor is somewhat limited, and that single handedly Jenkins probably could not turn around Monticello if he chose, but I (and most everyone I have spoken with) get the distinct impression that he is not trying all that hard. There is something wrong when virtually the only open store on the entire Broadway strip is owned by the mayor.

And now his clock throwing, racist rant has given our county’s capital village a black eye. He needs to go, and it needs to happen quickly. The casino referendum only states that two casinos will be placed in the “Catskill Region.” Although pundits say that our county will get at least one, why tempt fate, and make our area less desirable?

Let’s show the rest of the state (and whoever else is watching) that we are better than this YouTube snippet, and decisively relieve Gordon Jenkins of his duties, and get someone at that post who understands the problems, and wants to make a difference.

I know that there are some real good folks that are working hard to turn around Monticello and other areas of Sullivan County. The Sullivan County Partnership for Economic Development is one of those entities. We need more like them.

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