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Bernie Madoff’s Beach Home Sells For More lg_iglink_130x100Than List Price

By Ilyce Glink | Sep 17, 2009 |

Guess the home sale pundits were wrong: Bernie Madoff’s beach house location is worth more – not less.

A spokeswoman for Corcoran, the listing agent, confirmed today that Bernie Madoff’s Montauk, NY beach house went under contract for more than its $8.75 million list price. She didn’t have information on when the property would close or how much more than the list price the buyer or buyers were paying.

The sale is bound to raise some eyebrows and heighten suggestions that the housing crisis has turned the corner. Over the past year, sales in the Hamptons, some of the most expensive and exclusive property east of Aspen, Colorado, have slumped. The few properties that have sold have taken a big beating on price.

But as Wall Street goes, so do home values in the Hamptons, not to mention Manhattan. While Madoff’s 3,000 square foot beach house was spectacularly located (the house was built closer to the water than current building codes allow), the truth is that Wall Street now has a quarter or two of immense profits under its belt.

Profits = bigger salaries and bonuses. And bigger salaries and bonuses often translates into real estate purchases. If the money men (and women) of Wall Street believe that New York (or Hamptons) real estate is undervalued, and they have bonus cash in their pockets, you can expect them to pounce.

Does the Madoff beach house sale signal a true end to the housing crisis? Maybe. Let’s wait and see what his and Ruth’s co-op sells for.

East Hampton tax hike is certain
27east.com
By Beth Young The only thing that’s certain about the preliminary budget that East Hampton Town Supervisor Bill mcgintee plans to present by the end of

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Hamptons Cesspools Keep Towns’ Character as Sewers Are Stymied
Bloomberg
2 (Bloomberg) — Commercial and residential development in the Hamptons, the seaside playground for wealthy New Yorkers, is being held up as politicians

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The Wisdom of Seller Financing

June Fletcher, Wall Street Journal

You’ve got a buyer, but he can’t obtain a traditional mortgage and needs you to be the lender. Should you take the deal?
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Madoff’s Montauk Home to Hit Market at $8.75 Million
Bloomberg
“You’ve got a lot of competition” said George Simpson, president of Suffolk Research Service Inc., a Hamptons real estate data firm.
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Walk on the Wild Side: Lou Reed Moves to the Hamptons
TwentyFourBit
I said recently that TwentyFourBit wouldn’t be the place for Cribs-esque posts, but screw it ’cause some of these living music legend real estate stories

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Bottom-Fishing on the East End

casaCARA: Old Houses for Fun and Profit

I’VE BEEN GETTING FED UP with house prices here in the Humptons. Yesterday my friend Debre and I stumbled upon an old farmhouse with a ‘For Sale’ sign on Old Stone Highway in Springs, below, found the door open (!) and the realtor’s flyers conveniently stacked on the kitchen counter. I was hoping it was under $1mil. In fact, they’re asking $2.5mil.

East Hampton Launches CPF Website To Provide Transparency
Hamptons.com – Southampton,NY,USA
two percent tax on real estate transactions and the state and town legislation that created the fund, as well as information on the acquisition process.

Two-week Hamptons rental goes for $425000
The Real Deal New York – New York,New York,USA
An Eastern European businessman will be paying $425000 to rent a Hamptons home for two weeks in August, the most money ever paid for a two-week East End

Hamptons Green Alliance Starts Work on a Net Zero Energy
Business Wire (press release) – San Francisco,CA,USA
Following the December 2008 fire that destroyed the home of the David Dubin family, the members of The Hamptons Green Alliance

Hamptons Home Inventory Increases 12%, Prices Fall
Bloomberg – USA
in the Hamptons plunged 58 percent in the second quarter to 175, the second biggest decline in records dating to 1982.

Soldier Ride – The Hamptons – July 25
About – Cities & Towns – New York,NY,USA
On Saturday, July 25, starting at 9 am, the Second Annual Soldier Ride The Hamptons, Bike Ride and Walk will take place in memory of Marine Lance Corporal

Hamptons Home Sales Plunge as New York Financiers Conserve
Bloomberg – USA
By Oshrat Carmiel July 14 (Bloomberg) — Home sales in the Hamptons, the oceanside summer getaway for Wall Street financiers and celebrities,

Suffolk Research Says Signs of a Turnaround in 2nd Quarter ’09

According to George R. Simpson, President of Suffolk Research Service, Inc., the real estate market on the East End of Long Island is showing strong signs that a market turnaround has happened in the 2nd quarter of 2009.

Redfin.com search here

Newsday.com piece here

Jim Cramer

Jim Cramer

I don’t know how many of you watch Cramer on CNBC. I usually flip through when he’s on and watch as much as I can handle, and I do get the feed from Blogging Stocks. The thing I appreciate about Cramer is he speaks his mind and gut. Sometimes he’s right, sometimes he’s not (right Jon Stewart?)

This time, I hope he’s right…

“And why not? Prices have come down gigantically. Mortgages are the cheapest in our lifetimes. There’s a new tax credit for first-time homebuyers. You combine all of these and you get two things: 1) It is dramatically cheaper to buy than to rent — by as much as $4,000 a month, and 2) You have to be an idiot not to think about buying a property right now.

Still, nobody believes. I hear such non-refutational nonsense around the clock. People email me, telling me that I have no idea what I am talking about with the “coming bottom” in real estate. Here’s the staples; you have probably heard of a lot of them by now:”

see the entire post here

What a great story and EXACTLY what the people want to see public preservation funds used for.

Very often, we don’t know what land/property is available for development until after it is too late and the developer brings down the bulldozer. Cheers to the parties that made this deal happen!!  See story below.

77 Acre Cavett Property in Montauk, NY To Be Preserved

77 Acre Cavett Property in Montauk, NY To Be Preserved

 

 

 

  Tuesday, October 28, 2008 <!– letters · –>  

     


County Finalizes Joint Purchase Of Cavett Parcels Completing Moorlands Preservation
Aaron Boyd

Values, for the most part have held up fairly well, here in the Hamptons (and Manhattan) during this recent national real estate market meltdown.  One of the problems is, that some homeowners have/had an unrealistic view as to the true “value” of their property to begin with.

Main Entry:   1val·ue 
Function:      noun
Etymology:   Middle English, worth, high quality, from Anglo-French, from Vulgar Latin *valuta, from feminine of *valutus, past participle of Latin valēre to be of worth, be strong — more at wield
Date:            14th century
1: a fair return or equivalent in goods, services, or money for something exchanged
2: the monetary worth of something : market price

Today, although as the attached article discusses, many sellers are holding firm on their prices, there are some terrific deals on the market.

My clients just closed on a property at $1.875M that was originally listed at $2.6M. The seller got motivated and decided to bring his price to market value.  Sure, the buyer wanted to make a 10 – 15% discsounted offer, but I demonstrated to him that the house was prices properly and that, in this instance, offering at (or near) asking price was a smart move. He listened and is now happily in the home. 

Today, an agent needs to know the status behind the offering prices. There may be 3 houses listed at $3M with one firm, another willing to sell for $2.8m and the third willing to let it go for $2.3M.  Only getting behind the facade will tell you that.  The days of “taking orders” for houses, showing five and having buyers pay full price for one is all but gone…it’s time to do your homework.

Check out this NYTIme article. It’s a little bit of the “Hamptons Hype”, but makes some interesting points:

 

Standing Firm in the Hamptons

 

Published: October 24, 2008

“This is a resort discretionary luxury market, so it doesn’t look and behave too much like the regular primary residential market,” she said. “Buyers don’t have to buy and sellers don’t have to sell. As a result of those two things you get a flat market, not necessarily a depressed market.”

End of an Era on Wall Street: Goodbye to All That

Published: Sunday, October 5, 2008 at 5:21 a.m.
Last Modified: Sunday, October 5, 2008 at 5:21 a.m.

JUST before midnight 10 days ago, as a financial whirlwind tore through Wall Street, someone filched a 75-pound bronze bust of Harry Poulakakos from the vestibule of his landmark saloon on Hanover Square in Manhattan…

Over all, the past quarter-century has redefined the notion of wealth. In 1982, the first year of the Forbes 400 list, it took about $159 million in today’s dollars to make the list; this year, the minimum price of entry was $1.3 billion.   see story here

This post describes the intricacies of Fiduciary.  I’ve tried to make the language as user friendly and to the point, as possible.  Bear with it and tell me what you think…md

 

Duties of a Real Estate Agent

         A real estate broker who becomes an agent of a seller or buyer is deemed to be a fiduciary. Other examples of fiduciaries are trustees, executors, and guardians.

 

         As a fiduciary, a real estate broker is held by law to owe specific duties to the person who they are representing. These specific fiduciary duties include: 

 

         Loyalty

         Obedience

         Disclosure

         Confidentiality

         Reasonable care and diligence

         Accounting

Loyalty

        One of the most fundamental fiduciary duties an agent owes to the principal. The duty obligates a real estate broker to act at all times, solely in the best interests of the principal, excluding all other interests, including that of the broker. 

         An example of breach of loyalty is when a broker purchases a property listed with his/her firm, and immediately resells it at a profit. Such conduct is usually considered appropriate and lawful by persons who act at arms length, but a fiduciary would be considered to have stolen an opportunity for profit that rightfully belongs to the principal.

Obedience

         An agent is obligated to promptly and efficiently obey all lawful instructions of his/her principal that conform to the purpose of the agency relationship. However, the duty does not include an obligation to obey unlawful instructions, such as instructions to not market a property to minorities or to misrepresent the condition of a property.

Disclosure

        An agent must disclose to the principal all known relevant and material information that pertains to the scope of the agency. The duty includes any facts affecting the value or desirability of the property, as well as any other relevant information pertaining to the transaction, such as the other party’s bargaining position, the identity of all potential purchasers, information concerning the ability or willingness of the buyer to offer a higher price, or in the case of being a buyers agent, information concerning the ability or willingness of the seller to accept a lower price..

         An agent’s duty of disclosure to his/her principal must not be confused with a real estate broker’s duty to disclose any known material facts about the property value to non-principals. The duty to disclose known material facts is based on a real estate broker’s duty to treat all persons honestly. The duty of honesty does not depend on the existence of an agency relationship.

Confidentiality

        An agent is obligated to safeguard his/her principal’s lawful confidences and secrets. Therefore, a real estate broker must keep confidential any information that may weaken a principal’s bargaining position. The duty of confidentiality precludes a broker who represents a seller from disclosing to a buyer that the seller can, or must, sell a property below the listed price. Conversely, a broker who represents a buyer is prohibited from disclosing to a seller that the buyer can, or will, pay more than what has been offered for a property.  The duty of confidentiality does not include an obligation by a broker who represents a seller to withhold known material facts about the condition of the seller’s property from the buyer, or to misrepresent the property’s condition. To do so, constitutes misrepresentation and imposes liability on both the broker and the seller.

Reasonable care and diligence

        An agent is obligated to use reasonable care and diligence when pursuing the principal’s affairs. The standard of care expected of a buyer’s or seller’s real estate broker is that of a competent real estate professional. By reason of his/her license, a broker is considered to have skill and expertise in real estate matters superior to that of the average person. 

         As an agent who represents others in their real estate dealings, a broker or salesperson is under a duty to use superior skill and knowledge while pursuing the principal’s affairs. However, no broker is expected to perform tasks or know information outside the scope of his/her real estate license. Real estate licensees are not expected to perform services normally provided by engineers, lawyers, accountants, or other professionals. If concerns arise outside the scope of a broker’s responsibility, the broker should acknowledge that and suggest that the principal seek assistance from a reliable outside source.

 

Accounting

         An agent is obligated to account for all money or property that belongs to his/her principal entrusted to that agent. The duty compels a real estate broker to safeguard any money, deeds, or other documents entrusted to them relative to their client’s transactions of affairs.  

 

DON’T YOU WANT TO BE RESPRESENTED AS A BUYER IN A REAL ESTATE TRANSACTION? 

 
 
 
 
 
 
 

 

 

Serving The Hamptons, Shelter Island and the North Fork

631 725 0554 (o)  631 525 6000 (m)  www.beachamptons.com

michael.daly@mfdaly.com 

Why should a Buyer be Represented ?

Looking at a transaction from the Buyer’s side:

·    The buyer brings the money to the closing table!.

     In a typical real estate transaction involving one or more brokers, the buyer pays a total acquisition cost to buy the property. This is known as the “gross” purchase price. The gross purchase price includes the seller’s net proceeds, closing costs, taxes and fees and the brokerage commission. Thus, from the buyer’s point of view, the buyer is financing both the seller’s money and the brokerage commission in a total gross purchase price. In the case of two brokers being involved in the purchase, both brokers get paid a piece of the agreed upon brokerage commission that is clearly defined in the purchase and sale agreement.

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Looking at a transaction from the Seller’s side:

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·    The seller brings the product to the closing table!.

     In a typical real estate transaction involving one or more brokers, the seller never actually keeps the full amount of “gross” sale price. Instead, the seller keeps a “net” amount after the brokerage commission, closing costs, taxes and fee are paid. Thus, from the seller’s point of view, the seller is paying the brokerage commission from the seller’s gross sale price. As described above, when two brokers are involved in the purchase, both brokers get paid a piece of the agreed upon brokerage commission that is clearly defined in the purchase and sale agreement.

 

 

 

·    No matter whether a broker works for the buyer or seller, you can see that the question of who pays the brokerage commission is a matter of opinion and interpretation. Most experts agree that the simplest way of looking at a real estate brokerage transaction is by looking at it as simple arithmetic.

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What makes a Buyer’s total purchase price:

Seller’s “Net” Proceeds

+

Real-Estate Brokerage Commissions

=

Buyer’s “Gross” Acquisition Cost of Ownership

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Summary

·   With the majority of real estate transactions involving professional real estate brokers, buyers should employ their own exclusive buyer agent to assist them in locating, evaluating and negotiating real estate, without the fear of additional fees needing to be paid for buyer brokerage services. Remember that unless you specifically employ a broker to work for you by signing a buyer agency employment agreement, all brokers and salespeople represent the seller.

 

 

 

 

                                           

 

 

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