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Q & A With Barbara Corcoran
Q1 - We're selling our small lake front home which is about 50 years old, and it needs a lot of updating. Brokers tell us that the likely buyers may just buy it for the land and tear it down! What basic updates would you suggest we make? We're betwixt and between on what and what not to spend money on.
A - Here's what you should do. Invite three competitive brokers over and for their professional opinions on what changes you should make. Brokers can give you the best advice because they're out there on the front line with buyers watching their response to different homes. Also ask each broker what your property would be worth as a teardown. Listen carefully, and you'll have the information to make the best decision. If you decide that renovating is your best option, consider hiring a professional home stager to help you with the changes. They charge for their time, but they'll prevent you from wasting money and help you get the job done quickly. The International Association of Professional Home Stagers lists their members at www.iahsp.com.
Q2 - I'm 40 years old and considering becoming a real estate agent as a mid-life career change. My background is in administrative support and I have a Master's Degree in Liberal Arts. With so many agents already in New York City, what are your thoughts on my becoming an agent? Is it worth making an investment in classes and taking the exam to become certified?
A - You'll need a lot more than a master's degree and administrative background to do well as a real estate broker, because aggressiveness and competitiveness are the two magic ingredients. And if you're particularly insecure and have something to prove like I was when I started you're bound to become the number one broker in no time at all. But if this doesn't sound like your personality, stick with your 9 to 5 job and hold onto your steady salary.
Q3 - My sister and I own condos in Manhattan and both units are rented as successful investments. I'm contemplating buying another condo but have questions about the investment in a post-financial crisis world. Will New York City continue to be the financial capital of the world or will financial firms re-locate elsewhere? Will NYC continue to be a desirable place to live or is this the beginning some sort of new socio-economic era where the city won't be what it used to be? What lessons have your decades of experience in New York City real estate taught you about the city's resiliency and future standing in the world?
A - You're making it much more complicated than it needs to be. My years of brokering have taught me that New York City is a miracle town with an unbelievable knack for reinventing itself again and again. Don't mistrust our city even for a minute or you'll find yourself moaning and groaning about lost opportunities three years from now. You and your sister should go right out and do more of what you do well. Buy more property.
Q4 - I have a coop for sale in Yonkers and it's the best bargain in the tri-state area. Our coop rules only permit owner occupied apartments and the board has rejected numerous applicants of many shareholders. The market is not very good so it's very hard to find a buyer. Do you have any suggestions? I'm trying to coordinate a committee in the building so we can address my and the other selling shareholders' concerns. What do you suggest?
A - Forget forming a committee because it's the fastest way to get nothing done. The old rules should change simply because they're costing you and other shareholders too much money! Just draw up a simple petition that would allow all sellers to either rent out their apartments or sell them to investors. If you knock on the door of every shareholder in the building who's been unsuccessful in selling their apartment, they'll happily sign your petition. Then hire an attorney to draft a letter on their letterhead proposing the change to the board. It'll cost about two hundred bucks and chances are the coop board will reconsider their policy quickly. Coop rules changed back in the tough days of the 1970s' recession and they'll change again now.
Q5 - My daughter is getting married soon and is saving her money and living at home. So is her fiancé. I want them to buy and not rent, but my daughter's boss, a partner in a hedge fund who likes her very much and doesn't want to see her make a mistake, advised her not to buy now but to rent instead, because the real estate market has not crashed yet. He said, "Cash is worth more than real estate. Rent and save money for about five years." I feel that is a long time to rent when they could own something. I am so confused....
A - Unless your daughter's boss is a fortune teller, tell him to stick with stocks. I gave the same stupid advice to one of my trusting employees in the dog days of 1974 when her landlord offered to sell her four bedroom penthouse for $54,000. I told her to wait till prices hit bottom and sadly she listened. Five years later, her place was worth $500,000 and today it's worth $5million. She's still renting and still hating me.
Q6 - My husband relocated from Idaho to Kansas 14 months ago and since I (kind of) like him I decided to go with him! He is going to retire in about two years and we'll want to move back to the Pacific Northwest, preferably Washington State. Our home in Kansas is paid for. With the real estate market the way it is, should we look now for our next home or wait until he retires?
A - Don't wait. Start enjoying your retirement now by planning your next few vacations in Washington State. On each visit you can check out the towns you might want to call home. If you don't have money to burn, try swapping your home for another at a site like HomeExchange.com or Digsville.com. After spending enough time there, you'll probably fall in love with a town and you can buy while prices are still low.
Q7 - My 23 year old daughter graduated from college two years ago and yesterday had her 2nd anniversary on the job with the federal government. I'm pushing her to get an M.B.A. or other graduate degree in finance, and she wants to invest her two years of savings in a condo in New York City or New Jersey. I think it should be a degree or a one or two family house, considering the current soft housing market! Her father and I will help financially either way. What do you think: grad school, condo or house?
A - I think you should trust your daughter and let her do what she wants to do. It's a great time to snatch a real estate bargain because there's so much uncertainty out there and sellers are frightened. MBAs are expensive and chances are good that five years from now the appreciation on her house will help pay for her degree.
