HOME SALES

Intrepid customers braved snow, high winds and rain to come out to Shelter Island the first two weeks of February for both rentals and sales. While the last two weeks of the month were relatively quiet in terms of actual tours, interest in properties via email communication was active.

Homes for Sale:
Here is a summary in the home sale category…

The highest closing was $3.45m for a 1950’s waterfront property, offered as an estate sale, with many vintage appointments on over 2.5 acres with a pool and tennis court, introduced to the market just before Labor Day in 2006 at $6m. There had been numerous offers which in retrospect were quite good; A customer I had been working with in the fall of October 2007 had offered $4.5m cash that was refused. The last listed price was $3.9m, reduced in October 2009.

A turn-key waterfront cottage with pool, dock and elegant outdoor living spaces went into contract in the mid $1m’s…

A water view ranch with pool on a hilltop went into contract in the mid $1m’s…

Two inland houses, one a contemporary and the other an older farmhouse, which had been on the market since 2007 and 2008 respectively, went into contract at substantially less than the original listed price.

Properties in the “entry” level continued from January to be quite active.
A ranch house in the $500k range went into contract and a fixer-upper in the $400k range had an accepted offer.

Buyers who are actively out “in the field” touring homes that are on the market continue to do well at the end of the day—I always recommend to customers I am working with to look at everything in their price category, even if photographs don’t intrigue them.

There are still excellent opportunities on the market in all categories: inland starter homes, inland estate style homes with pools, waterfront homes and investment properties in beach areas. Many sellers are receptive to offers and to opening a dialogue to consummate a sale.

This time of year—post Holiday through March—sellers whose properties have been on the market through autumn and winter become antsy, which is understandable. Selling a home is a process with many variables: pricing, condition, market conditions and patience, being at the top of the list. I have found over the years that some sellers who fall into this category become anxious and--until customers start coming through the door, they look for someone to take the “heat”—usually the broker!

Each year, inevitably, there are some clients, who will want to discuss net pricing (“this is what I need to get”) and discounting commission. Net pricing is illegal and discounting commissions is not a wise thing to do, particularly in a market where a seller should make their property the first one a broker thinks of when scheduling a tour. I show everything in a given price category within time constraints set by a customer but unfortunately, many agents on Shelter Island are part time and will consider commission when scheduling a tour.

RENTALS

Interestingly, this season, many Landlords are, like many sellers, discussing what they want to net in the end.

The standard rental commissions are 10%. On Shelter Island—a $20,000 rental, which is typical for a 4 bedroom recently built house with a pool for one month, the agent earns about $1,000 unless they own their own real estate office. Over the last 10 years or so, rental rates have not fluctuated as much as sale prices, although the commissions and the accompanying responsibilities remain the same.

The responsibilities an agent has in handling a rental include:

...scheduling the tour, driving the customer to see properties, providing feedback to Landlord, following up with the customer, sometimes scheduling a follow-up tour, negotiating the terms, generating the lease, distributing and explaining the terms, the pre-move in walk-through of the property, move in at lease commencement, being a point person during the lease term, walk-through at the end of the lease, mediating any problems that may need to be worked out between the Landlord and Tenant, and following up with Landlords in many cases to ensure that the security is returned in a timely fashion.

A rental listing agent’s job is also a responsibility that is based less on the monetary reward—listing agents do not receive a “listing fee”—but more for the relationship and the pride that goes with it. Guiding the owner through the process—pricing, photographs, website details and text, updating the owner with news of the market—these are all part of the rental listing agent’s job.

During the season of 2009, there was a lot of haggling. This year, with a few exceptions, rentals appear to be moving along much more smoothly. As mentioned in my last newsletter, Landlords continue to change their minds about prices and dates after tours happen, which can complicate the process.
Along the same lines as owners wanting to discuss “nets” and cutting commissions, this year there have been a couple of instances where Landlords want to do direct deals with customers introduced to the property by an agent, thus cutting out the broker.

In February, there were several new properties listed on the rental circuit…

--one waterfront with pool;
--three inland properties with pool
--three inland properties without a pool

Inland homes without pools, comprise the largest category by far. I advise Landlords in this category to make their property stand out as much as possible, whether by undercutting the competition’s price, keeping the house super clean and nicely furnished or by adding other amenities that others may not have, e.g. a hot tub, capped utilities included, a boat slip etc.

The season has just begun and Landlords are already breaking up their monthly rentals to bi-weeklies and others are beginning to worry that their homes haven’t rented.

The rule of thumb on Shelter Island regarding the rental market has always been: rentals don’t begin to get chaotic until Easter or tax time and one never knows when the season drops off to a mere trickle!

ACREAGE

There has been activity in this sector, which has been quiet since the downturn in the market in 2008.

There are two estate properties coming on the market in the next few weeks and right now I am working with three customers who are eyeing acreage.

Banks have become more flexible with land and construction loans, which has helped.