The Townhouse Experts Guide: Selling Your Townhouse by thetownhouseexperts

THE TOWNHOUSE EXPERTS Â® GUIDE

SELLING YOUR TOWNHOUSE Dexter Guerrieri and Jane van den Berg Ordway

THE TOWNHOUSE EXPERTS Â® GUIDE

SELLING YOUR TOWNHOUSE Dexter Guerrieri and Jane van den Berg Ordway

THE TOWNHOUSE EXPERTS ® GUIDE

SELLING YOUR TOWNHOUSE

Cover photo: Dylan James Walker

All material presented herein is intended for information purposes only. While this information is believed to be correct, it is subject to errors, omissions, and changes, and we recommend you also consult with an attorney on any legal matters.

CONTENTS INTRODUCTION ............................................................ 01

IT'S NOT THAT SIMPLE F

The Chess Strategy

CHAPTER 1 ................................................................... 03

TO SELL OR NOT TO SELL, THAT IS THE QUESTION F Reasons Not to Sell F Reasons to Sell F Decision-Making with a Clear Head F The Takeaway CHAPTER 2 ................................................................... 11

PLANNING TO MAXIMIZE THE VALUE OF YOUR HOME F Our Townhouse Advisory Service F Resolving Certificate of Occupancy Issues and Department of Buildings Violations F Renovations that Pay Off F The Takeaway CHAPTER 3 ................................................................... 15

SO MANY AGENTS, SO LITTLE TIME F The Real Difference a Specialist Makes F The Reputation and Track Record of Your Exclusive Agent Matters F The Takeaway

CONTENTS CHAPTER 4 ................................................................... 21

SETTING THE CORRECT PRICE F The Strategy Behind Pricing F Location, Location, Location (And How This Impacts Pricing) F Size—and Condition—Matters F Rental Units Reduce Your Sales Price F The Truth Behind Valuation Algorithms F Appraisers Are Useful, But Expertise Makes All the Difference F You Can’t Control the Market; You Do Control Your Listing Price F The Takeaway CHAPTER 5 ................................................................... 29

MARKETING—WHAT YOU SHOULD EXPECT F Brand Identity Drives Results F Our Digital Strategy Reaches the People Who Love Townhouses F We Give Agents and Brokers the Information They Need—Now F Launching a Listing Takes a Team F Why We Market to Direct Buyers (And How This Saves You Money) F The Takeaway CHAPTER 6 ................................................................... 35

STAGING— PREPARING YOUR HOME FOR ITS NEW OWNER F See Your Home as a Buyer Sees It F Our Philosophy of Staging F How We Assisted a Major Estate F Minimal Baseline Staging Requirements F How Investing in Staging Paid Off for Our Chelsea Townhouse F Expect an Unexpected Reaction to Seeing Your Townhouse Staged. F The Takeaway VI

CONTENTS CHAPTER 7 ................................................................... 43

NEGOTIATIONS ARE ALL ABOUT POSITIONING F Avoiding “Round-Number” Syndrome F The Benefits Of Direct Deals for Sellers F The Takeaway CHAPTER 8 ................................................................... 47

THE RIGHT ATTORNEY, THE RIGHT BANK, THE RIGHT INSPECTOR F A Word of Caution F The Six Rules of Hiring an Attorney F Certificate of Occupancy Issues F The Role of Engineers F Financing Contingencies F Realistic Timing Expectations F The Takeaway CHAPTER 9 ................................................................... 53

PLANNING NOW FOR THE PROCEEDS F 1031 Exchanges F Estate Sales F A Normal Sale F Creating a Trust Ownership F The Takeaway

VII

CONTENTS CHAPTER 10 ................................................................. 59

AVOIDING RENTAL-UNIT PITFALLS F Special Information for Rent-Stabilized Tenancies F Check Your Certificate of Occupancy F Itâ&#x20AC;&#x2122;s Worth Your Time to Make Corrections F Practical Guidelines F An Example of a Happy Tenant Relocation WHAT TO EXPECT WHEN WORKING WITH VANDENBERG .............................................................. 67 F F

Client Testimonials A Special Note for Agents

ACKNOWLEDGMENTS ................................................. 73

ABOUT THE AUTHORS ................................................ 76

VIII

INTRODUCTION

IT'S NOT THAT SIMPLE!

s a n ow n e r o f a tow n h o u s e i n N ew Yo r k C i t y, yo u m ay encounter challenges when Deciding whether or not to sell your property. We know, because we are townhouse owners and investors ourselves. The decision not to sell may require a process of thoughtful deliberation. Even the decision to sell, while exciting, may be more complicated than it seems at first glance. There are myriad, and often complicated, tax issues and New York City and State regulations to contend with, and, because your townhouse is unique, getting an accurate estimate of its real value may be difficult. All of these factors, added to choosing an agent, and preparing your property for sale, can be challenging. Dexter conceived of this reference manual for townhouse owners based on his thirty-plus years as a townhouse broker, and our experiences as townhouse owners. Selling or not selling your property may be one of the biggest financial decisions you’ll make. Why repeat the mistakes others have made, when you can plan for a positive, profitable, and fruitful experience? Our resource manual guides you through the process either way and is part of our commitment to provide townhouse owners the resources they need to achieve their real estate and life goals. Rather than navigate this process based on random, and possibly inaccurate sources of information, you can benefit from our experiences, and those of the many people we’ve worked with, who have profitably sold, or chosen to hold onto their townhouses—for all the right reasons. D exte r G u e r ri eri and Jane van den Berg Ordway 1

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WHY SELLING A TOWNHOUSE IS LIKE CHESS: My love for townhouses, and their brokerage, goes back to my early adulthood—and my love for chess dates back to my teens. Over the years, I’ve found surprising commonalities between these twin passions. Selling a townhouse requires an ability to properly assess the exact situation at hand and re-assess at each step. There are known openings, middle-game feints, and end-game cool calculations in brokerage. The action also unfolds at its own pace—but the players manage it strategically. For example, the chess match for the World Championship between Magnus Carlsen and Sergey Karjakin had games that lasted six and a half hours. Listening to live commentary by Grandmaster Judit Polgár was thrilling and informative for chess aficionados such as myself. Now, imagine that chess game as a complex negotiation stretching out over weeks, sometimes longer. In such a scenario, the right strategy is key. That’s our mindset when we sell a townhouse for a client or ourselves. Throughout the book, you’ll find special sections called “The ‘Chess’ Strategy,” which reveal the key moves you can make to give you an advantage when selling your townhouse. I hope these strategies will spark your curiosity and inspire questions. At any point, if you have any queries or comments, email me: Dexter@TownhouseExperts.com. - Dexter 2

CHAPTER 1

TO SELL, OR NOT TO SELL, THAT IS THE QUESTION. “Once you have lived in New York and it has become your home, no place else is good enough.” jo hn st ei nbeck

h o u l d yo u sell yo u r tow nho u se? Answer ing this question isn’t always easy—and you might not expect we would ask you that as real estate agents. But, as townhouse owners and investors ourselves, we have been in your shoes with our townhouses and have had to make strategic decisions about our own properties. We know that deciding to sell isn’t always about price, but what works for your life. Depending on your circumstances, your best choice might be to stay put. In the end, we want you to be happy with whichever action you decide to take. We’ve compiled the following lists of common reasons townhouse owners either decide to stay in their homes or to sell as a way to help you start the decision-making process. REASONS TO NOT SELL

1. You want your property’s value to continue to increase. Real estate prices in New

York City do rise, and townhouses, in particular, are a very strong long-term investment. This is true, even if you take inflation into account. 3

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2. There are financial costs associated with selling and relocating. If you decide to

sell, you will have to pay taxes on the sale. Currently, this means paying 15% of the sales price to the Federal government and about 14% to the City and State. Even though you probably qualify for this reduced rate of Long-Term Capital Gains, it’s still a lot of money.

3. You have high expectations on a selling price based on a record-breaking sale. Each townhouse is unique, right down to its location on a block. For example, in Manhattan, houses on the 70s blocks sell for significantly more than townhouses in the 90s, and go for even more, depending on how close you are to Central Park. We often hear people say, “I’m waiting for my house to catch up with the houses on the Park Block.” That simply will never happen. 4. Your property generates rental income you depend on, or enjoy. You might be

living on two floors and collecting hefty rents each month for your other floors. If you have a five-story townhouse, those other three floors could be bringing in money you count on for repairs, major capital improvements, other kinds of expenses, and, of course, any mortgage payments. But perhaps you’ve paid down the mortgage, put your kids through college, and now it enables you to travel, or do other things you’ve always wanted to do, to enjoy your life.

5. You are concerned about how you’d reinvest profit. What to do with all that

Proximity to Central Park is a key valuation factor. This unusual salmon-colored townhouse is located just steps away. When the owners cleaned the soiled pink granite and iron spot brick facade, the neighbors were astonished, thinking it had been painted.

cash from the sale? Often, the secure investments available today don’t yield big returns. This is one of the more common reasons owners put up with the hassle of being a landlord. Real estate is a crucial part of their portfolio. 4

to sell, o r not to s ell?

6. You’re reluctant to make such a significant transition. If you have lived in your

home for much of your adult life, moving may be a scary prospect. You’re comfortable with your community and routine. You know the person who makes your bagel; the dry cleaner who has cleaned your clothes for years; and all of your neighbors. You may have a place of worship, a special place to sit in the park, and a few favorite restaurants close by. So, when you think about moving, the idea of having to re-establish your life elsewhere may seem daunting. Regardless of how much you might complain about your home (the maintenance issues, the challenges of the stairs, etc.), the fact is, you really just don’t want to leave your neighborhood and disrupt your routine. So, you stay put.

7. You would rather not deal with transfer issues right now. You may have a partner

you have to negotiate with, or perhaps challenging family dynamics, or estate issues that will emerge if you sell right now. You choose the time that is right for you.

8. Your townhouse is your primary asset. Your townhouse could represent your

entire life “savings,” which can further complicate the decision to sell. Frequently, we are contacted by such owners. It’s not uncommon for us to hear owners say, “This was not just our home. The rental income put our three kids through college.” For some, the sales price won’t yield enough cash to downsize in the same neighborhood, or in a comparable home, elsewhere.

9. You decide the house you have is a great investment and that you’ll buy another!

In this case, making a change may not involve leaving your current townhouse. We can advise on identifying the best investment properties, the pros and cons of becoming a landlord, or refer you to property management services. REASONS TO SELL

1. Your property has a lot of stairs. You can easily remember, once upon a time, you practically flew up and down the stairs and revelled in the advantages of multi-level living. But now, you say things like, “We are not getting any younger.” Perhaps you think that you should install an elevator—and then realize just how 5

selli ng yo u r tow nhous e big and costly a project that would be—and you’d still have to climb up the front stoop daily.

2. You’re “trading up.” You might

want a larger or wider building or a better location. You might have a 15-foot-wide building and decide you want one that’s 25-feet wide. Maybe you want to be on the “Park Block” next to Central Park. You might decide that it’s time to get a higher-quality building. Perhaps you want to move closer to your children’s school. Perhaps you want to purchase two more townhouses, based on the increased value of your current one.

3. You’d like a change of scenery. We

also hear a lot about the idea of moving to greener pastures, which, in most cases, means the South, or the Southwest. You may want to sell and move to a warmer, more temperate climate.

Sellers often approach us when they’ve decided to “trade up” to a townhouse that offers more space, features and amenities. This Vandenberg exclusive had all of that—plus some: 18-rooms, Hudson River views, a personal gym, an indoor pool, extensive entertaining space, a private office, marble fireplaces and exquisite architectural detail that made it feel like a European castle.

4. You’ve considered the cost of townhouse upkeep. Caring for a building that was

built as far back as the late 1850s isn’t cheap. Plus, real estate taxes continue to rise—and the 2020 law that limits the amount of real estate taxes you can deduct is a tangible setback.

5. You’ve relocated—and you don’t have time to be a landlord. You could rent out your townhouse instead of selling it, but then you face the challenge of managing a rental building from a distance, or the worry of trusting management to a company that may not be up to your standards for care. In addition to that, 6

to sell, o r not to s ell? problems can arise with tenancies, requiring you to navigate New York City rent laws carefully (and possibly, lengthy court battles in the event the tenancies run into financial problems and stop paying).

6. You feel “chained” to your townhouse. If you rent out units in your townhome

and manage the building yourself, the upkeep can become a burden. When there’s a leak, you’re the one who calls the plumber. You worry that if the pipes freeze and you’re not available, a disaster will occur. You could hire somebody to manage it, but you’ve become so used to handling maintenance tasks over twenty or thirty years, you don’t really relax when you go on a vacation. Perhaps you are retired and ready to have less responsibility.

7. You’re going through a divorce. Another unfortunate, but common, reason

people decide to sell their townhouses is due to divorce. Very often one spouse wants to stay in the building, but can’t afford to buy the other one out. Usually, the property then has to be sold.

8. You’ve got an empty nest. Perhaps your children have grown and left the

house, and now the “empty nest” suddenly feels awfully big for just two people. Perhaps your partner has died. Perhaps you want to downsize—or maybe you want to move to be closer to your kids or grandkids or other friends or family.

9. You are ready to make transfer and inheritance decisions now. When you confront these decisions ahead of time, you can prevent the scenarios we’ve seen: children or beneficiaries inheriting a house and then fighting and litigating for years over their shares. The property is eventually sold anyway and no one is happy. There can be a great sense of relief and peace that comes with knowing your affairs are in order, with inheritance details and expectations clarified. Once you have made the decision to sell, you don’t have to go it alone.

selli ng yo u r tow nhous e DECISION-MAKING WITH A CLEAR HEAD

When you’re choosing whether or not to sell your townhouse, don’t be surprised if emotions run high and pull you in many directions. This makes arriving at a decision all the more challenging. We’ve found that it’s far easier to find your focus if you employ a process for decision-making. Put your pen to paper and answer these basic questions first: Who are the decision makers? F What’s your timeline? F What are the pros and cons? F Who do you need to consult? F How will you resolve conflicts that come up? F

From here, you’ll have a good foundation for answering the more difficult questions: What are your motivations to either stay or sell? What are your feelings about them? What are the pros and cons of each? What are the financial, logistical, emotional, familial, relationship, and estate-planning impacts of selling or staying put? Talk to your other decision-makers: significant other, spouse, or business partner(s), and give yourselves enough time to understand what selling or holding means, individually and together. Do you agree? Run the numbers with your accountant. Does a move impact any extended family or friends? If you have adult children, do you want to ask for their input or does that open a can of worms? Does a sale affect anyone’s or any beneficiary’s estate expectations, meaning that communication needs to take place? Engage with those who are good listeners and want what’s best for you. Consider all of the resources available to help facilitate dialogue and planning: your trusted accountant, lawyer, family therapist, estate advisors focusing on transition, or an experienced real estate broker or agent. We have played this role many times. To hear how we’ve assisted sellers who have experienced conflict while in the midst of decision-making, come in to meet with us!

to sell, o r not to s ell? Don’t be surprised if you run into conflict if you’re not “going it alone.” We can all run into trouble with joint decision-making or processing input. One resource that’s helpful in these situations is the DISC Assessment. This is a questionnaire-based tool that centers on four different personality traits (Dominance, Influence, Steadiness, and Conscientiousness). Knowing these traits can help you better communicate, ensuring that both of your goals are achieved with less tension. For an exclusive code to access the DISC Assessment, get in touch with us at Dexter@TownhouseExperts.com. THE TAKEAWAY

The decision of whether or not to sell your townhouse is both financial and emotional for all involved and there can be lots of compelling reasons to do either. You need to be clear as to who the decision-makers are, and to define or choose who you want to consult, in addition to your paid advisors. Fortunately, once you have made the decision TO sell, you don’t have to go it alone. No matter what you choose, enjoy getting the weight of the decision off your shoulders. If you decide you don’t want to sell now but may want to in the future, you can prepare for the possibility now, to maximize your profit later. Keep reading to find out how. YOUR NOTES:

selli ng yo u r tow nhous e YOUR NOTES:

CHAPTER 2

PLANNING TO MAXIMIZE THE VALUE OF YOUR HOME “Luck has nothing to do with it, because I have spent many, many hours, countless hours, on the court working for my one moment in time, not knowing when it would come.” Serena Wi lli am s

f yo u ’ve d e c i d e d t h at t h e t i m i n g i s n ’t i d e a l fo r s e l l i n g your townhouse, strate gizing now will help you maximize your sales price when you’re ready. Renovations, repairs, upgrades, and other improvement projects are the usual suggestions for enhancing value. However, there’s no “one size fits all” solution when it comes to townhouses and you should spend your money where it adds value. Here’s what we mean: You may think that a kitchen redo will improve your eventual sales price, and in some markets it might, but we know that in Manhattan, the likelihood is the new owner will tear it out and your money would be better spent making sure your facade is in terrific shape. OUR TOWNHOUSE ADVISORY SERVICE

Over the years, we’ve taken great pleasure in exercising one of our “unique abilities”: advising owners on how to maximize their properties’ values when they sell. We refer to this as our Townhouse Advisory Service. 11

selli ng yo u r tow nhous e Our experience—both professionally and personally—gives us the ability to pinpoint at what a townhouse needs so as to maximize its sale price, so an owner does not invest time and money in projects that would have low or negative return on investment (ROI). Through our Townhouse Advisory Service, we guide owners through the specific changes they can make to significantly increase their property’s value at sale. Ca s e St u dy: Max i m i z i ng Valu e o n 87th Street The owner of a 20-foot wide townhouse off Central Park on 87th Street met with us for advice to prepare for the sale of her building. After assessing the property, we explained that a buyer would prefer a large owner’s unit and a garden, which would add to the sales value of her building. With our advice, the owner relocated a tenant. Then, she negotiated an exit agreement for another tenant, paying for moving and rental-broker fees to relocate. This created the space needed for an owner’s garden triplex. With these changes, we were able to obtain a price several hundred thousand dollars above what she spent in the relocations and would otherwise have earned. - Dexter While the advice and strategies we provide in our Townhouse Advisory Service are tailored to an owner’s property, there are common issues that frequently negatively affect townhouse owners in the sales process. CERTIFICATE OF OCCUPANCY (C OF O) PROBLEMS & DEPARTMENT OF BUILDINGS (DOB) VIOLATIONS

The presence of these issues can decrease the number of competitive bids on your townhouse. We’ve also seen buyers overestimate the cost of resolving violations, deduct that inflated amount from their bids, and the deal gets stuck in a standoff. So, we always suggest that townhouse owners do some or all of the following, depending on their situation:

Max i m i z e t he valu e o f your home Former SRO buildings need a Certificate of Non-Harassment. Track down former tenants. Hire expert architects and expediters, F Have tenants in formerly regulated units sign a document acknowledging free-market status, F Resolve violations by making required repairs and requesting a DOB inspection, F Apply for a matching C of O. Have drawings done by an architect. Then bring your building up to code. See Chapter 10, (page 59). F

Since New York State laws are continually changing regarding rent regulation, it is critical that you work with attorneys who are experts, and we mean up to the minute, on these issues. RENOVATIONS THAT PAY OFF

When townhouse owners consider a big renovation, they often ask, “How many units are best?” The answer is always the same: “The fewer units, the better.” This is true, even though you may very well achieve higher rental income from more units. If you have a single-family townhouse, keep it that way. A single-family is worth the most. F Townhouses with owner’s duplexes or triplexes and free-market rentals also fetch higher prices. F Those with owner’s units with garden access have a considerably higher value than those without. Understandably, rent regulation guidelines are in place to protect the rights of tenants. Make sure you consult and act in tandem with an attorney to respect everyone’s rights. F

If you’re working on a renovation before you sell your home, don’t let perfection become the enemy of progress. A current owner sardonically refers to the most expensive advice he was ever given, when his former architect said, “I wouldn’t do it, except, as long as we have the walls open, you might as well.” This is a sure fire way to never actually finish a renovation, and to also end up far beyond your 13

selli ng yo u r tow nhous e T h e “Ch e s s ” St rat e g y: Run the numbers before any renovation. If you’re the owner of a townhouse and decide to undertake a major renovation to upgrade and modernize your living space, that undertaking can prove extremely expensive. If you’re fully renovating an entire building, the cost can range from $3 million to $4 million and higher. Even renovating a floor or two at a time can be very expensive. The irony is that a partial renovation may not increase your townhouse’s value, which seems to go against common sense. - Dexter initial budget (time and money). You can keep this from happening by choosing to address the issues buyers care about in advance and adjusting your work plan. For more insight into renovations that pay off, please also read Chapter 6 on staging. THE TAKEAWAY

If you expect to sell your home in the future, you’re in an excellent position as you have the time now to address issues that impact the sales price of your home. However, you’ll want to be strategic with any changes you make. Our Townhouse Advisory Service offers tailored consultations proven to increase the value of your home by hundreds of thousands of dollars, all through triedand-true guidelines. Reach out to us at Dexter@TownhouseExperts.com. YOUR NOTES:

CHAPTER 3

SO MANY AGENTS, SO LITTLE TIME “The point of cities is multiplicity of choice.” jane jaco bs

he big gest mistake townhouse owners make when selecting a real estate professional is choosing an agent or broker with a “generalist” background. This is because the “ordinary” methods of selling a property don’t work for “extraordinary” properties—and make no mistake, your townhouse is an extraordinary property. A real estate agent who fully appreciates townhouses (and makes a living selling them) will know how to market your house to the buyers who will pay maximum dollars for it. At Vandenberg’s outset, we were a typical brokerage with multiple agents who sold co-ops, condos, and townhouses. Dexter had a deep interest in bringing people back into townhouse living and restoring multi-family houses. Very few agents were addressing the specific needs of buyers and sellers of townhouses. Thus, Vandenberg became The Townhouse Experts®. Over the years, we’ve tailored every facet of our company to serve the unique needs of townhouse owners, continually discovering better ways to serve this clientele. We now live in a townhouse and invest in them; and we love them. As a result, we have built a business that doesn’t feel like work, with clients who become “devotees” of townhouse lifestyles. - Jane

selli ng yo u r tow nhous e There are complications specific to townhouses that an agent who also handles other high-end properties might not anticipate. Common issues include: pricing it properly; structural problems; certificate of occupancy discrepancies; rent-regulated tenancies; and financing difficulties for buyers. Anticipating and addressing these issues is vital to the success of your sale; they may arise at any time throughout the sales process, as well as during that nervous-making period between accepting an offer and signing a contract. This isn’t to imply that agents who also handle other high-end properties are not capable of selling your townhouse. However, the agent who says there isn’t any difference between selling townhouses and high-end apartments… has likely sold very few townhouses. T h e “ Ch e s s ” St rat e g y: For the best results, hire an already-busyperson. Thirty years ago the "rule of thumb" was that 10% of the agents out there were doing the bulk of real estate sales: 20% were on their way in; another 20% were on their way out of the business; and the remaining 50% were more or less treading water. These days, as a result of the leverage of technology and sophisticated systems, the sales leaders completing the bulk of the deals is down to about 3%. Our team ranks in the top 1/1000% of New York City agents. - Dexter THE REAL DIFFERENCES A SPECIALIST MAKES

Your agent should have in-depth, firsthand knowledge of the townhouse market as well as the expertise to guide you, intervene when issues arise, and secure the best deal possible. The latter is crucial here, because buyers and their advisors need to be convinced of the market value of your building—and your agent will be the one to do this. A townhouse expert can knowledgeably compare properties (both those which have sold and those currently on the market), providing analysis beyond their architectural similarities. Remember, your listing agent will most likely be called upon to educate the buyer’s agents, most of whom are not knowledgeable about townhouses, as the majority of the city’s “product” is co-ops and condos. 16

so m any agent s, so little time Here’s a great example of how a townhouse expert can make a big difference when it comes to the sale and sales price of your home. The owners of a renovated, single-family townhouse on East 101st Street hired us to sell their house. Pricing it was a challenge. The townhouse’s location didn’t place it in either the lower-priced neighborhoods in Harlem, or the higher-priced neighborhoods of the Upper East Side. So, we had to triangulate its value based on its virtues, which weren’t readily apparent to those buyers browsing listings online. Adding to the challenge: the townhouse next door—also a single famFor sale signs are a proven lead generator for townhouse buyers. Design icon ily—had just sold after sitting on the Louise Fili created ours. market for two years. We knew that the reason the home had lingered on the market for so long was because it was overpriced. We also knew, from touring it, that while it had been renovated, the construction was low-quality. Yet, potential buyers who weren’t knowledgeable about townhouses could potentially point to its recent sale and expect to pay a similar price. As it turned out, our listing was far superior to its neighbor—and not just because it was larger. Our extensive knowledge of the interiors of townhouses, cultivated over the years, meant we could identify the hallmarks of its quality renovation as soon as we walked through the door. We knew how to translate this knowledge to potential buyers in our marketing materials for the listing. In addition, we had something other agents did not: a pool of buyers who knew what they wanted in a townhouse. Immediately, a few East 90s buyers came to mind who might be interested in this home and neighborhood. We emphasized the quality renovation, how the loca17

selli ng yo u r tow nhous e T h e “ Ch e s s ” St rat e g y: The Real Estate Board of New York’s rules require its 17,000 members to co-broke their exclusives almost immediately after signing (unless instructed otherwise by the seller). Make sure any agent and their company has a commitment to fair play—and reaching the widest range of buyers—by their compliance to this rule. -Dexter tion meant their dollars would go farther, and that they would still only be a mere eight blocks from the best schools. As a result, we achieved a sales price of almost one million dollars more than the house next door. THE REPUTATION AND TRACK RECORD OF YOUR EXCLUSIVE AGENT MATTERS

After you have vetted the agent for expertise and experience, the next step is to discern their reputation. Picture yourself as an agent bringing a buyer to view your property: does the listing agent and their team project a welcoming demeanor? Next, ask around. You will want to avoid agents who make it difficult for co-brokers to show your property and who aren’t trusted to transparently communicate offers. It’s a “people” world. Nobody, especially people who aren’t co-brokers, wants to play if the deck is stacked against them. Relationships matter. Simply put, two audiences your exclusive agent will be marketing to are the “co-brokers” from other companies, and, if they work for one of the larger brokerages, the other agents in their firm. Be wary of agents who sell properties at substantially less than their original asking price, in an attempt to just grab the listings; or, who accept an inflated initial price in an attempt to please you and to acquire your listing. An overpriced house loses valuable first-time viewers. Continuing price reductions are not in your best interest and will delay your sale. You lose credibility when other agents and buyers see your overpriced townhouse; they usually won’t return to it as quickly when the price drops. Also valuable is an agent who has a team or staff at the ready to provide additional documentation and follow-up, and who can go that extra mile to help owners, especially long-distance owners, deal with pre-closing details that crop up. A single agent might better serve you as a friend, rather than a 18

so m any agent s, so little time business associate responsible for your significant asset. A good reputation can help expedite other parts of the selling process. For example, along with associates who can handle such tasks, we help sellers by providing advice about banks and the loans available to prospective buyers. We know which banks will loan money to townhouse buyers in situations that might be less straightforward than the purchase of a typical single-family home. Complicating issues might include the presence of multiple tenancies, or configurations that do not legally match the buildingâ&#x20AC;&#x2122;s certificate of occupancy. Often there are workarounds that can be used to address such issues, but you need to know experts who can help you address them, so you can find and implement solutions.

A lways A s k fo r t he Data: Many do not understand the value-add of a seasoned real estate broker, even though choosing poorly can cost them a significant amount of money and stress. A friend listed her charming, upstate, second home for sale. Pristinely renovated, beautifully staged, and in a great location, the right agent should have found it easy to sell, but it stalled on the market. My friend was pulling her hair out; she was not confident in her agent, yet she liked her a lot! Although the agent had been in the business for many years, she had not provided any comparables when setting its asking price, and only pointed to unreliable data of the prices of current listings on the market, rather than sold data, when asked. Nor could she say how she was reaching the ideal buyer pool for the property. Aggravation can be avoided by asking an agent the following in advance of hiring them: their average sales price; the types of properties they sell; how they will reach the buyer pool most apt to buy your property; and which sold comparables support your asking price, and WHY. (Buyers will want to know!) It is helpful to feel a connection to your agent, but it will become strained when they donâ&#x20AC;&#x2122;t produce for youâ&#x20AC;&#x201D;or you doubt what they DO produce. You expect answers, strategy, and expertise when you hire a surgeon. Expect the same from your agent. -Jane 19

selli ng yo u r tow nhous e T h e “ Ch e s s ” St rat e g y: Estates and partnerships benefit especially from agents or brokers with relevant experience. These sales can be particularly messy. The parties involved may be at odds with one another, or the owners of the estate may live far away. If you’re in either situation, it’s in your best interest to have an agent or broker with a track record for handling these kinds of sales, a gift for diplomacy, and the ability to communicate with and unify multiple owners. -Dexter THE TAKEAWAY

Hiring a real estate agent is not just about whether or not you “click” with them, but about their expertise in selling townhouses, outreach to buyers, capacity for service, communication, their results and reputation. The professional you choose will be representing your property in every sense, conveying the value of your home to buyers who may not understand townhouses, and anticipating townhouse-specific issues before they become big problems to you. Remember: An ordinary approach will not work for an extraordinary property like yours. For a list of questions to ask every agent, visit TownhouseExperts.com. YOUR NOTES:

CHAPTER 4

SETTING THE CORRECT PRICE “Passion drives purpose, but data drives decisions.” A ndy Du nn, C EO o f Bo nobos “I had come to an entirely erroneous conclusion. It shows, my dear Watson, how dangerous it always is to reason from insufficient data.” S herlo ck Ho lm es i n The Adventure o f t he Speckled Band

h e n i t c o m e s to d et e r m i n i n g h ow m u ch m o n e y yo u r townhouse will fetch, it’s easy to er r in one direction or the other. Yet, pricing is one of the main factors you control in a sale. If you underestimate the value of your townhouse, you risk not reaping as much as you can from what might be one of your larger assets. If you overestimate its value, your townhouse might sit on the market for months, even years, with little prospect of selling. THE STRATEGY BEHIND PRICING

At our meetings with owners, we present sold prices of properties that are relatively similar to their building. We show them where their building fits within that range, and why. We also explain where their property fits in the list of other townhouses on the market and discuss its unique selling proposition. 21

selli ng yo u r tow nhous e One thing to keep in mind is that when it comes to townhouses in New York City, there are a relatively small number of similar properties within the city. Therefore, we sometimes have to reach back in time or outside the immediate neighborhood to find an appropriate comparable example. This can still be a challenging task, because townhouses come in so many configurations and they may be located on blocks that are more or less desirable than yours. In these cases, we combine the data we have collected on townhouses for years.

We take all of the houses that have been sold, and the ones on the market, into consideration. We then evaluate the data, through the lens of our knowledge of specific comparable properties, to determine the price at which your townhouse will sell. We are transparent with you in our process. Multiple factors go into setting the right price. Data is only part of it; there’s also context, which only comes from expertise. Instead of asking, “You’re the expert; what’s our place worth?” you will set the price. You’re involved in the process and are fully aware of how we arrive at the best price for your house. 22

SETTING THE C ORRECT PRICE T h e “Ch e ss” St rat e g y: Here’s a disappointing example of an overpriced listing that was eventually sold for a price far below market. An unscrupulous exclusive agent told their seller to a take a very low offer because otherwise they could still be on the market in three years. Bear in mind that this was an intelligent owner recently relocated overseas. Uninformed, they began with an unrealistic “aspirational asking price,” and hired an enthusiastic agent. At exactly the expiration of that agent’s exclusive listing, they were leveraged to sell far too low. This is how the public comes to think badly of our industry. - Dexter Everyone wants their homes to sell for as much as possible. That’s why we analyze every bit of data and draw upon our extensive experience of similar transactions to ensure that you’re never leaving money on the table when you set a price. However, some agents will blindly set a lofty price without considering any data whatsoever. Arbitrarily inflating a price is a tactic called “buying a listing” and it’s one we never use. The story of these listings follow the same pattern: The home sits on the market for a long time, undergoes price reduction after price reduction, then gets an undesirable reputation in the marketplace. If it eventually sells, the price will likely be far less than the homeowner wanted. Looking at the right data points through the lens of experience ensures you’ll get the most for your townhouse. Read on for the biggest factors that’ll impact your asking price. LOCATION, LOCATION, LOCATION (AND HOW THIS IMPACTS PRICING)

The prices for New York City townhouses range dramatically, depending on the location. Townhouses on the East Side of Manhattan fetch more than those with the best addresses on the West Side and, generally, houses on the 70s and 80s blocks sell for more than premium locations in the 90s. Often, sellers are surprised to learn that “location” doesn’t just refer to the neighborhood or street, but their property’s specific position on the block. 23

selli ng yo u r tow nhous e The value of your house—higher or lower—is affected by whether your house is in the middle of a quiet and attractive residential block or near a busy commercial street. Houses with a southern exposure, or a south-facing garden, typically sell for more than those that face north, which tend to get less direct sunlight. Is your house near schools (but not too near), parks, transportation, and/or convenient shopping? All these factors affect the value of your house. SIZE—AND CONDITION —MATTERS This turn-of-the-last-century mansion at Wider houses command higher 40 Riverside Drive (designed by renowned architect prices than narrower ones and Clarence True) features a corner rotunda and well-kept homes sell for more than unobstructed side windows. Townhouses have many lives, outliving us mortals. In one lifetime, this fixer-uppers. The added “extras” townhouse hosted a private school. Later, an enteralso matter—and this is one rare prising architect transformed it once again, opening area regarding price in which a up the upper floors to create dramatic entertaining spaces that frame views of park foliage and the townhouse owner has some conHudson River. trol. An elevator greatly increases the value of a house, especially in the eyes of older buyers who may be glad to avoid stairs. Features such as central air, a new roof or boiler, new electrical wiring and other renovations and improvements are taken into consideration. An unusually large garden, a finished basement, or a wine cellar can all increase the value of a building. Public-facing renovations, like restoring a stoop, add value, while also offering a way for you to contribute to the look and feel of the block.

SETTING THE C ORRECT PRICE RENTAL UNITS REDUCE YOUR SALES PRICE

The presence of rental units is a major factor in determining your price point. How many rental apartments are in your building and where are these apartments located? Are your tenancies rent-regulated—that is, are the apartments rent-controlled or rent-stabilized? Do you have any single-room-occupancy (SRO) units? All these factors help determine the sale price for your building.

The “Chess” Strategy: Act ethically and prevent costly legal issues by staying up to the minute on rental regulations. For important information on recent changes to New York City rental laws, email me at Dexter@TownhouseExperts.com for our Toolkit. - Dexter

THE TRUTH BEHIND VALUATION ALGORITHMS USED FOR YOUR TAX BILL

Another roadblock for owners to proper pricing can arise from the real estate tax bill you receive in the mail. With this bill, the city indicates what it considers the market value of the house. But, to determine this figure, the city uses algorithms that often err on the side of a high valuation, which can result in benefitting the city with higher property taxes. Unfortunately, such a valuation can disappoint owners when they discover that their homes aren’t worth nearly as much as the city claims. Here’s an example: We recently met with an owner who received a tax bill indicating that her townhouse is worth $6 million. However, the house is realistically worth $4 million. No comparable houses in her neighborhood have ever sold for $6 million. To top off the conversation, her “helpful” father interjected, “New York City says $6 million, but I think it’s worth even more than that.”

selli ng yo u r tow nhous e APPRAISERS ARE USEFUL, BUT MARKET EXPERTISE MAKES ALL THE DIFFERENCE

One way to determine a general estimate of the value of your building is to hire an official Member of the Appraisal Institute (an MAI appraiser). This gold-standard credential of real estate appraisals will assess how much financing a bank will allow for your building. But remember, even with such an appraisal, a figure offered could differ by as much as 15 percent or more from the price your house might actually sell for. The reason is, appraisers can use only recent sales to determine the value of your building, and as mentioned, there is usually a shortage of such similar sales. This lack of information leads to faulty appraisals. Believe it or not, a well-meaning appraiser hired by a large bank recently appraised a townhouse for $16.25 million, when in fact the value was half that. This did not serve the owner, or the lending institution. Thus, even the best appraisers can reach error-filled conclusions. This is why we provide comparables to appraisers for buyers or sellers when financing is involved. They don’t have the benefit of having seen the inside of all the townhouses that have sold in the area, or in other comparable neighborhoods. The complexities of New York City cause prices to differ by 20% on either side of an avenue. Known for our knowledge of townhouses, and their neighborhoods, we often get calls from appraisers seeking our information about particular comps. We’re happy to help them. YOU CAN’T CONTROL THE MARKET BUT YOU DO CONTROL YOUR LISTING PRICE

In general, townhouses are on the market longer than apartments. But the speed with which a townhouse sells varies over economies, market factors (such as new developments flooding the market), location, and price category. Lower- to mid-priced townhouses typically stay on the market for six to nine months, but they can be priced to sell immediately. Luxury mansions may take 18 months. A key task for an agent is recommending the right price from the outset—a skill that can only come through data and experience. You can’t change the location of your home, or your original choice to purchase it, but you do control its pricing. Remember, selling your property requires making its listing price “market worthy.” 26

SETTING THE C ORRECT PRICE THE TAKEAWAY

Setting the price for your townhouse isn’t an arbitrary process. The right figure takes a wide range of factors into consideration, from location to the presence of features that may initially seem minor (like a new boiler). An agent who comes up with a high price on the fly hasn’t done their homework and will do more harm than good, putting you at risk of selling your home for far less than it is worth. Also, take appraisals and valuation algorithms with a very large grain of salt, as these figures come from limited information (or in the case of algorithms, trend on the high side). However, you do have an active role in setting the price of your home—and can even increase its value by making key changes.

YOUR NOTES:

selli ng yo u r tow nhous e

YOUR NOTES:

CHAPTER 5

MARKETING—WHAT YOU SHOULD EXPECT “Success is a science; if you have the conditions, you get the result.” OSC AR WILDE

retired couple recently hired us as their exclusive listi ng age nt. They bot h had wo rked in the upper echelons of the marketing world their whole careers. As smart, savvy New Yorkers, they had already correctly identified three townhouse specialists. For them, with their backgrounds in international analysis for major corporations, this was just the beginning. They wanted to learn, beyond the fluff, how each part of our marketing works. Our in-office analysis meeting, which normally lasts about ninety minutes, stretched to three hours and was spent almost entirely on marketing. We love discussing the strategies of marketing! Rarely do we get the opportunity to explain the nitty-gritty “work” components. Most sellers just want the overview and their eyes start to glaze over when we go deep with search engine optimization, Google algorithms, buyer personality profiles, and global market reach, broken down by country. But these two sellers put us to the test. So, a few days later when they announced their decision to hire us, it was very satisfying, especially when they said our marketing was “head and shoulders above the competition.” 29

selli ng yo u r tow nhous e BRAND IDENTITY DRIVES RESULTS

When we first established our brokerage, we were comprised of numerous agents selling co-ops and condos. When we decided to focus on townhouse brokerage, we built our brand carefully to reflect our values, passion, and expertise. We also developed a team and designed systems to deliver the kind of experience we would want in the sale or purchase of our property. From our name, URL, and website, to every postcard we send, seminar we hold, and everything else we do, we strive to communicate our brand. All marketing materials we design are geared to drive results for our clients. OUR DIGITAL STRATEGY REACHES THE PEOPLE WHO LOVE (AND BUY) TOWNHOUSES

Every agent or broker will provide a certain baseline of marketing by taking photographs, or using yours, to place your property on the New York equivalent of a multiple-listing service. We go far beyond that with our digital strategy. Our work isn’t just about buying and selling townhouses, but to convert anyone on our website, watching our videos, or looking through our photos on social media to townhouse ownership and lifestyles. After thirty years, the magic of townhouses has never been lost on us—and we want everyone else to feel that magic, too. Owning a townhouse is aspirational and we want people to have the resources they need to achieve their dreams. So, we employ strategies to drive townhouse buyers to our site, and to cultivate a relationship with them until they are ready to purchase. We take a personal approach to staying in touch with our buyers—and all buyers who contact us—through targeted email newsletters with information specific to current listings and townhouse lifestyles. We focus our information so well that our newsletters consistently exhibit an open rate higher than the industry average. Maintaining the database of subscribers and writing the content is expensive, so non-townhouse specialists can’t afford to compete.

what yo u sho u ld expect

Mondays With Dexter is the preferred way many of our buyers (past, present, and future) start their week. Our newsletter addresses issues involving New York City real estate in a quick, informative, and entertaining way. It’s not uncommon for readers to respond to the newsletter directly, sharing their thoughts with us on the topics of the week. Call us or email us at Dexter@ TownhouseExperts.com to subscribe. - Dexter Our Buyer Specialists stay in touch and send buyers emails when properties come on the market that fit their criteria. Our social media and publicity are all designed to drive buyers to choose townhouse living and to the Townhouse Experts. WE GIVE AGENTS AND BROKERS THE INFORMATION THEY NEED—NOW

We cut through the clutter to communicate directly with any agent who has ever shown a townhouse listing of ours. It can take awhile for large brokerages to update their databases with new listings. Our weekly email describes our listings to a custom, proprietary database of over 2,800 agents who sell townhouses (even if occasionally). This allows us to reach our outside “partners” in a way that is remarkably more efficient than posting on the MLS (Multiple Listing Service). In an age of “information clutter,” delivering our listings to agents and brokers directly has proven effective in getting the right properties in front of the right eyes, so to speak. We have a team member ready to show other agents or brokers any of our listings, so other agents can effectively serve their clients. LAUNCHING A LISTING TAKES A TEAM

We have devoted lots of time, energy, and resources into developing and sharpening the initial twenty-one steps it takes to launch a listing on the market— and that’s just the start! Our whole team sets to work to sell a townhouse, from determining and writing up its unique selling proposition, making sure 31

selli ng yo u r tow nhous e it is published on both our business and brokerage websites and listing services, creating photos and videos, and getting the word out through all our channels. We all meet to discuss your listing, its features, and comparative advantages to others on the market. Our team shows your property through other agents and to our buyers, and conducts open houses. Sometimes, we make videos or pitch stories directly to the many reporters, writers, and editors we’ve formed relationships with over the years. In addition, we provide our clients with a bi-weekly report, detailing how many times people have clicked on We love hosting events at our exclusives to gather the the photographs of their townhouse townhouse community and share information. on our website, and we can compare that figure to that of other homes in the neighborhood. If two houses are getting an equal number of hits-let’s say 300 hits over a two-week period-and one house has had five showings and the other has had none, this indicates that the second house is likely priced too high. We also provide our clients the status of competitive listings and their trajectories. We provide feedback from prospective buyers who have seen the listing, so we can benefit from their reactions, and, if appropriate, use them as a guide to making the townhouse more desirable and ensuring it’s priced properly. WHY WE MARKET TO DIRECT BUYERS (AND HOW THIS SAVES YOU MONEY)

Selling your property to a direct buyer allows you to save substantial commission expenses, thanks to “dual agency.” Over the years, we’ve cultivated a database of buyers who are passionate about townhouses. Bear in mind that our buyers are 32

what yo u sho u ld expect generally in the .1% of wealth or income, well above the wealthy 1% referred to these days. They are top surgeons, heads of major law firms, entrepreneurs who started successful companies, hedge fund founders, investment bankers, celebrities, and trust-funders. They tend to be iconoclastic do-it-yourselfers, and this attracts them to ownership of their own, singular townhouse. These types of buyers want to hear about listings as soon as they become available (sometimes even before a listing goes on the market) and prefer to be on our direct-call list rather than get information secondhand from outside agents or brokers. THE TAKEAWAY

Good marketing—that is, marketing decisions made using data, analyzed with expertise, and carried out by an experienced team—will position your townhouse listing in front of the right potential buyers. It’s also expensive, which is why non-townhouse specialists can’t afford to compete with us. Our approach presents listings in front of a large audience of potential direct buyers, which can help you save money on commission expenses. If you’re interested in receiving weekly emails on all topics related to townhouses, be sure to sign up for Mondays with Dexter on TownhouseExperts.com.

A picture is worth a thousand words…and many more impressions online. We take the time to shoot a few unexpected images of a townhouse, like these magnolias in bloom in front of this brick townhouse.

selli ng yo u r tow nhous e t he “ Ch e s s ” Strat e g y: Most of our sellers choose dual agency. One reason is that we typically discount our commission by 1% if we find a buyer directly. Our odds are 50% of finding the buyer directly, compared to a typical agent who only finds the buyer directly 15% of the time. This 1% discount is a lot of money. As a seller, we inform you of the comparable sales and during the selling process keep you posted on the rest of the ongoing market. The New York Department of State requires that sellers and buyers be informed with a standardized format regarding single and dual agency. The intention of the law is to protect consumers from being taken advantage of by real estate agents. We would be happy to explain further. - Dexter YOUR NOTES:

CHAPTER 6

STAGING—PREPARING YOUR HOME FOR ITS NEW OWNER “Number one—and I want you to emblazon this on your brain—you only have one chance to make a first impression.” J u dy Shei ndli n (J u dge Judy)

u i ck qu iz : When m eet i ng so m eo n e new, how long does it ta ke t o t e l l i f yo u l i ke t h e m o r n ot ? I t ’s u s ua l ly a 30-second decision—and sometimes, you make that decision in an even shorter period of time. The same is true for your townhouse. Even the best-informed buyer will act on emotion first, then find reasons to support their feelings. A negative first impression can eventually be overcome, but it takes extra effort. However, when sellers prepare their home properly to get that ‘first impression’ right, the value of your home can increase by $200,000 to $500,000 or more—and unlike other factors that influence pricing, these elements are entirely in an owner’s control. To be one of the owners who gets to enjoy that boost in value, you’ll have to prepare your property to make the best impression possible, inside and out. 35

selli ng yo u r tow nhous e SEE YOUR HOME AS A BUYER SEES IT

The facade of your brownstone is what will catch the eye of a buyer, whether they’re looking through photos of the listings on our website, or simply walking down the street. They imagine what it would be like to live there themselves: they see the lights on through the windows as they walk down the block, they slow down as they pass, so they can see more and imagine themselves walking up the stairs into their home. The exterior of your townhouse tells a story to potential buyers, from its architectural elements, which reveal what your block was like when the home was built, to the interior details that create natural focal points in a room. The exterior will coincide with the buyer’s aspiration for themselves. As we say at Vandenberg, townhouses are aspirational! t h e “ Ch e s s ” St rat e g y: Your timeline for selling impacts which changes you make. When we work with an owner, we advise them about what work should be done, and what work would be a waste of money and time. However, if you’re looking to sell in the next two to eight years, we’ve designed a program that addresses big and small changes that will help you realize the ultimate sales price on your home: the Townhouse Experts Advisory Service.. See Chapter 2 for more information, or contact me at Dexter@TownhouseExperts.com. -Dexter

If a buyer sees cracks in the stoop, dirty windows, window boxes housing the remains of plants, bricks with chunks missing, and other unfortunate details, their vision is marred right there. While some may think of “curb appeal” as addressing cosmetic issues, structural issues can often be discovered just by looking at your home and thereby impede a buyer’s enthusiasm. That’s why we recommend making a thorough inspection of the exterior as soon as you think that you might want to sell your home. Fixing structural problems takes time (from hiring professionals, to getting the appropriate permits, to actually completing the work) and isn’t something you want to be working on as your house goes on the market. It’s likely that structural issues, if present, won’t be 36

PREPARING YOUR HOME limited to the exterior. If you choose not to fix them, you will at least know how much it will cost for a buyer to resolve them. OUR PHILOSOPHY OF STAGING

These days, it seems that every luxury magazine, real estate blog, and neighbor knows about staging, so there’s a lot of advice floating around on this topic. Most of it is repetitive and about styling. We think most of it misses the point. Here is the basic truth of the matter: staging is about creating your home as a space in which buyers can One of the best features of a townhouse is its easily envision their OWN narratives. outdoor space. Show it off to its best advantage with everything from furniture to privacy-enhancing It really is NOT about changing your shrubs and plants. decor for stylistic purposes; it’s about creating a space in which buyers can easily envision their OWN lives—in your property. We all fill our homes with items, furniture, memorabilia, artwork that convey the narratives of our lives. These are the things we love, and love to share with our friends and guests, that reflect meaningful stages of our lives, our passions and commitments. When our friends come over, we love to tell them the stories behind the artwork on our walls. But, “Dear Reader,” buyers are not your friends; they are there because they are looking for a home to fill with their own experiences. If we were to put our home on the market, a lot of stuff would have to come down to be stored, so that prospective buyers could focus on living there themselves. In our experience, townhouse owners delight in the details. An eye for beauty usually extends beyond the home to fantastic collections of antiques, interesting artifacts, art, books, and more. While surrounding yourself with interesting 37

selli ng yo u r tow nhous e items feels comfortable to you, potential buyers see the items as things that label the house as “yours”—not theirs. As a seller, it is not really in your self interest for buyers to be pondering your mementos; you want them to be thinking, instead, about where they would put theirs. A stager—and we—will ask you to store these objects out of sight, so it’s better to get this step out of the way sooner than later. If the task is an onerous one, hiring a professional organizer can help facilitate this project; they can even coordinate where to donate, and how to find storage space for the appropriate items. By necessity, we have developed a referral network for professional organizers, a packer/picture hanger and a small jobs contractor.

Plants and window boxes make your home especially welcoming!

HOW WE ASSISTED A MAJOR ESTATE

Are all townhouse owners authors? Sometimes it seems like it. But not all are as prolific as Lidie Murphy. This self-made actress, lay minister, and businesswoman designated her Alma Mater, a two-year college in Georgia, to receive the proceeds from the sale of her house after she passed. She had travelled the world as a performer and singer. She had been a radio star as well. We never met her in person, but her autobiographies tell the story of a sensitive yet flamboyant and fearless woman who was not intimidated by the odds against her successes. We were referred by another townhouse owner and hired by the college. Her five-story townhouse was filled to the brim with an eclectic mix of furniture and mementos from seemingly every locale. And there were her boxes and boxes of extra copies of the books she had written. Every room told a story—her story— 38

PREPARING YOUR HOME presenting challenges for us both exhausting and exhilarating. The house was in great need of repair, with many holes made visible as we dug our way through the layers of treasures. And to top it off, there were illegal squatter tenants who thought they could stay forever, as well as a person who claimed unsuccessfully to be her heir. Preparing it for sale required many of our referrals: lawyers, contractors, painters, plumbers, movers, and stagers. MINIMUM BASELINE STAGING REQUIREMENTS

From years of buying and selling townhouses, we have a few “instant staging” techniques that we recommend. Our favorite one involves simply adding lights to an interior—up to 10. This helps shift a person’s focus to exquisite woodwork and other types of interior details, while also making a space feel more open in an instant. For homes that need a little more help, we recommend hiring a stager who truly understands the charm and wonderful idiosyncrasies of townhouses. t h e “ Ch e s s” St rat e g y: If you have outdoor space, consider special staging to show it off in its best light. One of my favorite staging solutions overcame the challenge of deep buildings on either side that hemmed the garden in. It felt like you were on view for neighbors, as if you were inside a glass fish bowl. Trees and shrubs were strategically placed by our stagers to transform the garden into a beautiful, private, meditative oasis. Bear in mind that the sellers had lived thirty years with what had been a very uncomfortable outside space, so consider staging your garden for yourself! - Dexter Here are a few more tips we commonly recommend to owners looking to improve their townhouse’s first impression: Repair and/or replace stoop; Re-point and repair the façade; F Landscape the garden. It may be necessary to draw attention away from adjacent buildings; F Brighten rooms with bright lights and light-colored paint; F F

selli ng yo u r tow nhous e Re-plaster and paint any old repairs; F Install new carpet in hallways/stairways; F Get an exterminator. F

PERSONAL STORY: HOW INVESTING IN STAGING PAID OFF FOR OUR CHELSEA TOWNHOUSE

We owned a Chelsea townhouse that was built in 1844. It needed a complete soup-to-nuts overhaul. For example, there were fabulous ten-inch-wide wood floors…except they were badly damaged. It also seemed as though every person who had occupied the building had selected a special color to paint each room, each hallway, each door, and even the floors. The scope of issues seemed beyond what you’d normally think could be addressed by staging. Instead, this property illustrates how staging is actually about opening up a space for a buyer’s vision. Our dear interior-designer friend took one look and suggested that we do something akin to what she had seen at the Venice Biennale: a complete white wash of the interior, from the ceiling to the floors (and everything in between) in a shade of bright white. By “white-ing” it out, we created one big, welcoming, light-filled home. As we worked, we also decided to take almost every door off their hinges—even closet doors—and stored them in the basement. The exterior spaces needed work, too. The glorious southern garden had been neglected for generations. Our stagers put up a new fence and a uniform covering of wood chips, along with some pretty potted bushes. We replaced the creaky wooden entrance stoop and filled up holes where there had once been leaks in the third floor. All these changes added up to $100,000. Why would we personally spend the money when we knew that it was likely that absolutely none of the painting and repairs would be of use to the new owners when they did their “gut renovation”? So potential buyers could walk through a still-quirky, light-drenched, happy space and imagine it as theirs. The return on our investment was BIG. We sold it for a significantly higher price than the bank’s initial appraisal, and made the record for the highest townhouse sales price for an unfinished house in Chelsea. 40

PREPARING YOUR HOME EXPECT AN UNEXPECTED REACTION TO SEEING YOUR TOWNHOUSE STAGED

You might be surprised at how staging can “work” on you. These two examples illustrate how we saw our own townhouses in a completely different way. In the first example it almost convinced us to stay; in the second example it did.

Example #1: We staged the townhouse we owned in Chelsea, as described

above. The more we spent time there, the more we loved it. As it neared completion and exhibited its full 1846 charm and streaming sunlight, we began asking ourselves and our children and our friends if we really should move there. Who wouldn’t want those five fabulous floors, even if we couldn’t afford to fix it up? But, we blinked. Not the right time, not near our kids’ school, etc.

Example #2: From the proceeds of the Chelsea townhouse, we did a 1031

Exchange for a deteriorated townhouse in Brooklyn Heights with legal and illegal tenants—the kind of thing most buyers would run from. But we knew it was a diamond in the rough, or as Warren Buffet would say about his best purchases, a “cigar butt.” Much to our surprise and good fortune, after a couple years, the parlour floor became vacant. So, we decided to stage and sell it. This involved lots of paint and lots of cleaning; the tenant had been, shall we say, a hunter/gatherer of much-too-much of everything. Once we had the townhouse on the market and it looked so pretty and the views were so amazing, we started contemplating living there ourselves. This time, the magic of staging worked on us and we moved in! It’s a cute story—and it’s true—but there is a P.S. For us to move in, we had to redo the kitchen and a whole lot of extra special things that weren’t part of the staging. Our dearly beloved contractor said: “Why didn’t you just move in at the beginning and save yourself the (contracting) money?” The answer of course is that staging really does allow the goods to shine, and there is not a shortcut to physically experiencing the finished product.

selli ng yo u r tow nhous e THE TAKEAWAY

A great first impression is what will make a buyer fall in love with your property. Projects that lead to a positive impression can help increase the value of your townhouse by $200,000 to $500,000—or even more. However, it’s not as simple as choosing the right door color or hiring a stager. Fixing structural issues, finishing a renovation, and even removing excess clutter should be considered first. For a list of value-adding improvements, specifically for townhouse owners, visit TownhouseExperts.com. Overall, de-cluttering and staging can bring up many emotions. That’s because your home tells the story of your life. But now, it’s time to begin to focus on writing your next chapter.

YOUR NOTES:

CHAPTER 7

NEGOTIATIONS ARE ALL ABOUT POSITIONING “Before a negotiation can proceed and be completed, what is outside the scope of negotiation needs to be agreed.” Ch r i st i ne Lagarde, Manag ing D irecto r and Chai r perso n of the T h e Int er nat i o nal Mo netary Fund ( IMF)

n a ny ne g ot i at i o n, t here’s no “ o n e s ize fits all” approach that’ll work for everyone. This is especially true for townhouses, for a few reasons: the market is complex and seller and buyer needs are varied. (Even their motivations and personalities affect the negotiating process.) But whatever the challenges specific to your property, an experienced townhouse agent can help you navigate your way through the complexities and make the wisest decisions. A townhouse agent knows which banks are likely to provide loans to prospective townhouse buyers and which mortgage brokers are best suited to particular situations, thus helping the process move along briskly. Good negotiating means not simply relaying offers and counteroffers. Your townhouse sale will probably be the biggest financial transaction of your lifetime. It all comes down to strategy. Your agent must position offers and counteroffers so you’re heading toward the desired result. AVOIDING “ROUND NUMBER SYNDROME”

If you’ve ever wondered why a property was listed at precisely $6.23 million, there’s a reason: avoiding “round number syndrome.” In real estate, opting for 43

selli ng yo u r tow nhous e t h e “Ch e s s ” St rat e g y: Know what’s going on behind the scenes. When it comes to real estate transactions, one thing that separates New York City from most of the rest of the country is how we handle negotiations between buyers and sellers We don’t use documents known as “written binders” during the bidding process. Those documents become part of the actual sales contract, and they are used in many places around the country. However, in New York, an offer is formalized only after the attorneys have prepared a contract, it has been signed, and escrow money has been exchanged. - Dexter round numbers instead of more precise numbers have been found to lead to lots of headaches—underpricing, overpricing, negotiating snafus, etc. That’s because the market is much more precise than hundred-thousand-dollar or even million-dollar increments. If either you or the buyer draws a line in the sand with an inaccurate round number, the chance of a successful outcome is greatly diminished. Fortunately, this syndrome is treatable. Make sure you know the correct value A still from our video “How to Sell a Townhouse range of your townhouse in 60 Seconds.” You can watch it at TownhouseExperts.com long before you face the pressure situation of a negotiation. THE BENEFITS OF DIRECT DEALS FOR SELLERS

As discussed in Chapter 5, we typically offer a discounted commission if another company isn’t involved, so the seller saves money. Secondly, there tend to be fewer “games” in the negotiating. Remember, there are tens of thousands of agents out there, and, on average, most of them are not expe44

ALL ABOUT POSITIONING rienced in educating buyers about current townhouse sales comparables, etc. So, with a direct deal, the seller’s odds are increased that the direct buyer will get beyond the “sticker shock” and actually pay the true value of your townhouse. Then, there is the “we are all grownups here” argument. As long as you, the seller, feel properly educated about the real value and the real current market conditions, you can feel confident about dual representation. Often, you are similar to the buyer in wishing to not find yourself removed, by multiple levels of people, during negotiations. THE TAKEAWAY

No two townhouses are alike—even when they’re neighbors. We mostly sell in Historic Landmarked neighborhoods, which have limitations regarding color and facades, resulting in the coveted uniformity of NYC townhouses. We ain’t San Francisco. But there are some fun variations, such as these side by side Brooklyn Heights townhouses.

An experienced agent makes all the difference when it comes to the negotiation stage. It’s not just about being able to draw upon extensive knowledge of previous sales. It’s about thinking strategically about every facet of the selling process, right down to precise pricing that avoids “Round Number Syndrome.” During this process, you need to have two feet solidly on the ground. This can make the difference of hundreds of thousands of dollars.

selli ng yo u r tow nhous e YOUR NOTES:

CHAPTER 8

THE RIGHT ATTORNEY, THE RIGHT BANK, THE RIGHT INSPECTOR “People who are passionate about and good at what they do, tend to also be pretty good at cutting to the chase.” A l i ne Ler ner, C EO and founder of I nt ervi ew i ng .i o

“Good leadership requires you to surround yourself with people of diverse perspectives who can disagree with you without fear of retaliation.” Do ri s Kear ns Go o dw i n

s wi t h h iri ng an agent, we recommend that our clients hire attor neys who are experts in townhouse sales. After all, New York City is home to countless real estate attorneys. Some of them specialize in commercial real estate; others handle both commercial and residential transactions. You can safely assume that most residential transaction attorneys aren’t knowledgeable about townhouses. 47

selli ng yo u r tow nhous e A WORD OF CAUTION

It is generally not advisable to hire a family friend as your attorney, or even a family member, for the transaction. Their role should remain as an advisor. Generally, they are not versed in townhouse-specific issues or may use an outdated, atypical, or computer-generated contract. Also, be wary of the “best attorney in the city.” That person may be very smart and successful, but their junior associate will be doing the work, who in turn will need to consult with other expensive associates to make sure about essential protections that are townhouse-specific. You can be the loser if you are inappropriately overprotected. Such delays can mess up a sale.

THE SIX RULES OF HIRING A LAWYER

1. Don’t hire a relative or family friend. They may be overprotective and get in the way of the deal, or not have the correct expertise. 2. Don’t hire an attorney who rarely does townhouse contracts, because they could

take too long researching the basics, or miss on significant issues.

3. Don’t call in a favor so you are saving money, because this is one of the

largest transactions you might ever do, and you want to have your lawyer’s attention, front and center.

4. Don’t let your lawyer use a computer-generated, non-standard contract, as the

momentum of the deal could get soured by negotiating the details.

5. Don’t hire a litigator, as this is not a battle where you and the buyer wear

each other out.

6. Don’t hire the “best lawyer in New York City,” as they will farm it out to

junior, less experienced associates.

The ri g ht At tor ney An attorney who specializes in townhouses will be looking out for matters that are unique to townhouses; the physical structure and mechanicals must be addressed in legal terms that are completely dissimilar to sales contracts for apartments in large buildings. If you have rental unitsâ&#x20AC;&#x201D; or if your building did in its pastâ&#x20AC;&#x201D; DHCR (the Department of Housing and Community Renewal) reports provide information about rent-regulated tenancies who might have rights that are not immediately obvious. And because so many townhouses are located in historic districts, neighborhoods governed by strict landmark laws that are designed to protect hisJust as an agent well-versed in townhouses has an eye for the features that make a property special, toric buildings, an attorney familiar a great attorney knows the essential details and with townhouse sales will not have to protections specific to townhouse contracts. educate themselves on the most current obligations under these laws. Perhaps most importantly, contracts can be prepared quickly, and negotiated efficiently, which saves you money and preserves the momentum of the deal. CERTIFICATE OF OCCUPANCY ISSUES

Yet another legal issue involves what to do if the certificate of occupancy for your house doesnâ&#x20AC;&#x2122;t match the current configuration. Most townhouses were built as single-family homes over 100 years ago and have long since been divided up into smaller apartments. Good to know: If the necessary paperwork for this reconfiguring is not in order, we can work with your lawyer to help you clarify this, to minimize or eliminate any devaluations at the time of sale. You may do corrections, if there is plenty of lead time. We are often 49

selli ng yo u r tow nhous e consulted by owners who want to compare such costs and headaches to the increased sale value. Sometimes the choice may be to do nothing and just know that this is something your agent will need to prepare for. We actually encounter this scenario frequently due to the “plight of the small building owner” in the face of complex New York City regulations, which continue to be modified. THE ROLE OF ENGINEERS

It’s a good idea for sellers to know what to expect from the buyer’s engineer, who inspects the property prior to contract signing, not after. This is another way that most townhouse sales differ from apartment building sales or property sales outside New York City. There is rarely a thirty-day due diligence period after the contract is signed. During a townhouse inspection, engineers could discover issues about which you had no knowledge; these could be structural, electrical, plumbing, roof, termites, etc. For example, a repair of a structural issue may cost you $10,000, but facing the It’s never too early to prepare for a rainy (or unknown, a buyer may try to renegosnowy!) day. When you decide that you are ready tiate their offer by $30,000 or more. to sell your townhouse, take a moment to schedule a You should know in advance about meeting with your attorney to ensure that your legal these issues and be prepared to hold paperwork isn’t water-stained beyond recognition, as one of our clients was. firm or allow monetary concessions. We can recommend several professional engineers who are thorough, know townhouses, and have excellent judgment. We can make recommendations and arrange for such inspections. On occasion, we will be aware of violations that need to be addressed, and we can bring them to your attention. 50

The ri g ht At tor ney FINANCING CONTINGENCIES

Occasionally, a buyer will require a financial contingency as part of their offer. In this instance the sales contract typically provides 30 to 45 days for the buyer to obtain financing for a specific percentage of the sales price. If unsuccessful, the buyer can cancel the contract without penalty. Your agent should be versed in all recent comparable sales so they can assist the bank appraiser. It’s a big problem if the appraiser incorrectly values the townhouse below the negotiated sales price. REALISTIC TIMING EXPECTATIONS

After the price has been negotiated, you should expect two or three weeks, or longer, to get the actual contracts signed. According to attorney Craig Price, a partner at Belkin Burden Wenig & Goldman, LLP, who specializes in townhouse contracts: “If the seller has all their legal ownership papers in order, we can draft a contract in days. For this reason, it’s best for an owner to come in for a preparatory meeting as soon as they first consider selling. Delays in contract preparations might cause a perfectly good buyer to get cold feet.” Contracts usually specify 30–60 days for a closing. If there is a financing contingency or 1031 exchange, it could be 90 days. Bear in mind that in New York, the date specified in the contract is typically subject to change. Either party to the contract can adjourn the closing for up to 30 days before a demand called “Time-of-the-Essence” can be enforced. THE TAKEAWAY

Patience is key during this phase of selling your townhouse. Whether it’s hiring an attorney or an engineer, you’ll have a distinct advantage and an overall less-stressful experience with those who have lots of townhouse experience. Need a recommendation? We are always available to assist you.

selli ng yo u r tow nhous e YOUR NOTES:

CHAPTER 9

PLANNING NOW FOR THE PROCEEDS

“Whoever said money can’t buy happiness simply didn’t know where to go shopping.” Gert ru de St ei n

fter a deal has been hammered out, important issues can arise d u r i n g clo s i n g s i nvo lv i n g s u ch m at t e r s a s ve n d o r ag re ements, outstanding violations, and the condition of your building. Streamlining the closing process, troubleshooting, and making sure that you understand the timetable is essential. Even once the closing has been completed, other important financial tasks await you as the now-former owner. What’s key is devising strategies to manage the often generous proceeds from the sale and determining how best to reinvest that money. These decisions involve tax considerations, the implications of relinquishing rental income, and the special issues involved in selling or bequeathing a home to one’s children. Other considerations will be the amount of your “basis” (your original purchase price plus improvements, minus the amount of “depreciation” you have declared over the years). Owners often come to us with these questions, and we are happy to provide the basic information for decision-making, but we don’t pretend to be accountants or tax advisors. 53

selli ng yo u r tow nhous e t h e “ ch e s s ” st rat e g y: When it comes to whether you write or make a phone call pertaining to a delicate matter, consider the wisdom passed on to us by a New York City attorney friend: “There’s only one thing worse than a schmuck. That’s a schmuck with a fountain pen.” - Dexter 1031 EXCHANGES

When selling multi-unit townhouses, the rental portion of the house is considered investment property. When investment property is sold, you can defer your taxes through what is called a 1031 exchange. This means that the investment portion of your townhouse taxes from your profit can be deferred when you buy another investment property. Here’s how it works. Let’s say you have tenancies in half your house. As a result, half of the house is considered the investment portion of the building. If you sell it for $6 million, $3 million of the sale is considered the investment portion. As a replacement you can buy $3 million worth of investment property anywhere in the United States, and you can defer taxes on that half of the profit from the sale of your townhouse. A 1031 exchange is an often overlooked tax advantage to owning real estate. We can refer you to a 1031 tax attorney. Simultaneously, some owners choose to arrange for generational transfers. If portions of your estate will be sold anyway, why not complete those distributions now while you are living? If you have children who have moved to, say, Maryland, they might want to buy houses there so they can have investment income where they live as opposed to being long-distance landlords. If you have three children and $3 million worth of money to disperse, you can buy $1 million dollars of property in locations where each of your three children wants to live. And the advantage is that you have the full $3 million to spend and you don’t pay $1 million or more in taxes at this time.

PLANNING NOW FOR THE PROCEE DS ESTATE SALES

An estate sale provides a tax advantage because your heirs, under current laws, don’t have to pay federal taxes on the profits of their inheritance, subject to limitations. As we’ve said, rarely do heirs keep a townhouse once the owners die. They often sell it and split the proceeds, and hopefully they do so peacefully. Here is an example. According to what’s called a “stepped-up basis,” the value of the inherited property When planning for the future starts to feel for the heirs is the market value at the overwhelming, take a moment to “stop and smell the time of death, not the amount paid roses.” Placing rows of potted chrysanthemums are for the property when it was bought. an excuse to visit the Farmer’s Market. Plus, you Therefore, if the heirs turn around are giving back to the community by making a real contribution to the streetscape. and re-sell the property, their taxes will be relatively low. However, there are also city and state taxes to address. This is an important consideration in a city like New York, because real estate taxes here are higher than in many other parts of the country. A NORMAL SALE

There are many reasons to simply sell, pay taxes, and have that coveted euphemism referred to as “cash.” You are taxed on your profit after subtracting out your basis and closing costs, less depreciation. There are Federal, State, and City taxes, each with its own calculation. Your “basis,” which is not profit, is what you paid for the property and the documented improvements. We can explain the basics to you because we’ve been through this so many hundreds of times, but you will need to rely on your tax experts for decisions about deductible expenses since there will most likely be judgement calls that relate to how aggressive your advisors are, and of course your own temperament.

selli ng yo u r tow nhous e

Springtime on a townhouse block can be magical. 56

PLANNING NOW FOR THE PROCEE DS CREATING A TRUST OWNERSHIP

There are various Trust ownerships that can transfer ownership to relatives. These often require several years of advance planning, but are well worth the effort and expense. You may consider a Charitable Remainder Trust. Or there is the Irrevocable Living Trust, which allows you to avoid probate and is used for Medicare planning. In this way, your assets are preserved for your beneficiaries and don’t have to be sold to pay for expensive long term care such as nursing homes. Through the years, we have worked with townhouse owners who have availed themselves of these various trusts. Tax issues involving the sale of townhouses are complicated. Your accountant can help you sort out these issues, and because we understand this subject well, based on our broad experience selling these buildings, we can also be helpful. THE TAKEAWAY

We recommend speaking with your accountant or tax advisor regarding what to do with the money from the sale of your townhouse. From our experience, there are several options for owners. For example, a 1031 exchange, where the investment portion of your townhouse profit can be deferred when you buy another investment property; a generational transfer; estate sales; normal sales; and Trust ownerships. The best option for you is one that fits your situation. YOUR NOTES:

selli ng yo u r tow nhous e YOUR NOTES:

CHAPTER 10

AVOIDING RENTAL-UNIT PITFALLS “Before anything else, preparation is the key to success.” Alexander G raham Bell

any buyers start out by saying they don’t want to buy a tow n h o u s e w i t h re n ta l u n i t s. H oweve r , b e c au s e tow n houses with tenancies are more affordable, and more common, buyers who want to be in a certain neighborhood (such as the Upper East Side) often compromise and purchase a building that has free-market tenancies. Others save even more money when they purchase townhouses with rent-stabilized or rent-controlled apartments. Buyers often come to this decision slowly. We sometimes educate and address objections from such buyers for a period of years before they finally buy a building with tenancies. For these buyers, a preferred location is a higher priority than getting the use of the entire townhouse. SPECIAL INFORMATION REGARDING RENTSTABILIZED UNITS

About half of the townhouses we sell have tenants residing in them, and a number of those live in rent-stabilized or rent-controlled units. These rents are strictly regulated by the City and State and can be raised only in certain prescribed increments. Tenants may be paying minimal rates for their apart59

selli ng yo u r tow nhous e ments, especially when it comes to rent-controlled units; sometimes they pay only a few hundred dollars a month for a two-bedroom that would otherwise rent for ten-to-twenty times that much. If you have rent-controlled or rent-stabilized tenancies in your building, you face special challenges when it comes time to sell. A whole series of laws and lesser-known court rulings protect the rights of these tenancies—and the laws are always changing. For up-to-the-minute news on rent-regulation changes, subscribe to our newsletter at TownhouseExperts.com. A key goal for sellers is to reduce the number of tenancies overall and clarify the legal status of those who remain. Generally, a buyer will pay a higher price for fewer units. One tenant is ideal; then the owner doesn’t really feel like a landlord. CHECK YOUR CERTIFICATE OF OCCUPANCY

We also often encounter buildings that have had multiple owners over the years, and permits may not have been properly applied for before construction began. Previous owners may have changed the number of units in the building—chopping up what was originally a single-family house into small apartments—or illegally removed what are called SRO (single-room occupancy) units. As a result, the document known as the Certificate of Occupancy (C of O) for your building may not reflect those changes. This discrepancy can negatively affect your sale price, and it may be expensive to correct the configuration. In this situation, your best strategy may be to minimize any C of O and rent-regulation issues by providing an empty building, especially if the prospective buyers will be turning it into a single-family townhouse anyway. This may become a cash-flow decision. You may be able to significantly increase the rent of a vacant unit by combining it with another apartment. Owners often consult with us and some choose to simply leave the unit as is, if they plan to sell in the next couple of years (see Chapter 2). Also, without a proper certificate of occupancy, your building will be an illegal residence, and that makes it more challenging for a buyer to get a mortgage. If the tenants discover these discrepancies, they could stop paying rent, and you could face legal penalties and rent rollbacks. 60

AVOI DING RENTAL -UNIT PITFALLS IT’S WORTH YOUR TIME TO MAKE CORRECTIONS

The process to correct the filing can take six months or longer and it is not cheap. But, in the end, completing this process makes your townhouse much more valuable to a prospective buyer. Similarly, if you have rent-stabilized tenancies, it’s essential to make sure that they’re legal, that the actual tenancies are the ones named on the lease, and that you are charging them the legal rent. Especially thorny is the issue of incomplete documentation at the time each apartment was deregulated. We recommend that owners of multi-unit townhouses contact us long before Whether you have free market, rent-controlled or rentthey put their house on the market. stabilized units in your building, it’s crucial to know (and follow) the current laws that apply to each type of tenancy. Owners can thus avoid or mitigate last-minute selling nightmares. You will have to deal with all these tasks when it’s time to sell so it’s better to get them out of the way before a buyer comes along and says, “My lawyer found out that tenants should be paying $500 less.” And, of course, in that instance the buyer would rescind their offer or want a reduction of the sales price. PRACTICAL GUIDELINES

Here are some specific things you can do to resolve issues involving tenancies. F Reduce the number of units. A single-family townhouse will earn the highest price, and, in general, the fewer units, the better. F Evaluate all stabilized apartments as soon as they become vacant. Consider combining a vacant stabilized unit with another vacant unit, as you can potentially increase the rent to market. Be sure to document this exactly 61

selli ng yo u r tow nhous e as the law requires. Don’t attempt to understand these regulations on your own; get the advice of a knowledgeable attorney. F If you plan to sell your house soon, leave rent-regulated units vacant. AN EXAMPLE OF A HAPPY TENANT RELOCATION

Let’s say you have tenants who might be willing to be relocated. We can help. Here’s how this can work: In one of our estate sales, the owners inherited a beautiful house on a Park block, but the house had a rent-controlled tenant, a kindly 85-year-old war veteran. The heirs of the estate liked and respected him and didn’t want to even broach the topic of relocation with him—they were concerned that to do so would be disrespectful. We explained that the building would be more valuable if he moved and that would free up dollars to share with him. Following legal guidelines, we also had a long talk with him. During that conversation, he admitted that the few steps leading to his street-level apartment were already a lot for him, and that he was reaching an age where he really needed an elevator. Prior to the sale, the estate did not have enough money to buy a condo for this tenant, but, with the tenant’s agreement, we were able to set a purchase t h e “Ch e s s ” St rat e g y: Because legal issues related to rental units are so complicated, please email me at Dexter@TownhouseExperts.com for my Rental Tool Kit or for a referral to top attorneys. -Dexter price such that the buyers bought not just the townhouse but a condo for this man to move into as part of their contract. The sellers were able to offer a building that was vacant and the sale price was considerably higher as a result. The estate made a lot more money, the rent-controlled tenant was happy, and all this was achieved through respect, dialogue, and proper planning. There are restrictions on how you enter into a dialogue with a tenant, which are periodically revised. Talk to us and consult with an attorney before communicating with one, so you do not run afoul of any laws designed to protect them.

AVOI DING RENTAL -UNIT PITFALLS T H E TA K EAWAY

Though most townhouse buyers would prefer not to have rental units, some choose properties with them for various reasons. However, both types of buyers would agree that “less is more” when it comes to multiple units. A savvy owner may be able to successfully relocate tenants by adhering to New York City and State laws regarding rent-regulated units. You should also check your Certificate of Occupancy to ensure that it correctly reflects the number of units in your home. YOUR NOTES:

selli ng yo u r tow nhous e YOUR NOTES:

JOURNEYS AND DESTINATIONS

“Without leaps of imagination or dreaming, we lose the excitement of possibilities. Dreaming, after all, is a form of planning.” Glo ri a St ei nem

“It will never rain roses: when we want to have more roses, we must plant more roses.” Geo rge Eli ot

Thank you for reading our guide. Please contact us if we can help you in any way. We also welcome your feedback to expand upon and improve future versions. Just write to us at Dexter@TownhouseExperts.com or call 212.769.2900.

selli ng yo u r tow nhous e YOUR NOTES:

WHAT TO EXPECT WHEN WORKING WITH VANDENBERG—THE TOWNHOUSE EXPERTS ® “Eventually everything connects—people, ideas, objects. The quality of the connections is the key to quality, per se.” Charles Eam es

e’ve revealed how we can help you when it’s time to sell your townhouse. To get a sense of what it’s like to work together, we thought we’d let our clients share their experience about the process. CLIENT TESTIMONIALS

“

When I hired Dexter Guerrieri as my exclusive broker, the first-class service he and his team at Vandenberg provided was an unexpected bonus. From Day one, Vandenberg Real Estate provided me with a total package—from a detailed list of closing costs…to obtaining the Certificate of Occupancy…even to finding an attorney to assist me in orchestrating the closing…there was no detail too small. Over the years, I have received hundreds of letters from Brokers wanting my business, but Dexter Guerrieri’s team at Vandenberg stepped forward like no other and found a real buyer with the right price.” - T. Cowan 67

selli ng yo u r tow nhous e

“

This is a note to express our appreciation for your work in the sale of our townhouse… The fact that we obtained the highest price ever on West End Avenue is to be credited a great deal to your expertise. As our Exclusive Agent, you did a terrific job of marketing… Our house was unusually large and required finding a special buyer. We were especially pleased with the way you promoted it to other brokerage firms, thus reaching all possible buyers in the market. ...We are in the real estate business ourselves, so we know that Vandenberg went above and beyond the call of duty. ...There’s one other thing I would like to mention. You made our lives easier because you were so courteous and professional in dealings with our two tenants. If you had not kept up a smooth rapport with them, the house would have been much more difficult to sell. Thank you again.” - H. F

“

My business partner and I attempted to sell our West 90th Street property and initially gave the exclusive to another broker. Despite extensive periods of promotion and advertisement, the property did not sell. As we watched other properties move on the market, it became clear to us that we needed Dexter Guerrieri’s expertise in townhouse sales. Dexter’s area knowledge, innovation, and perseverance were unsurpassed and, in short order, he ultimately obtained an excellent price. He is truly a Broker’s Broker!” - Bruce M.

“

T h a nk yo u s o very m u ch fo r all yo u did to tr ans act what see m s l i ke t h e best pri ce and t he qu ickest s a le ever of my late father’s Manhattan townhouse [in the West 70s]. I think I’m speaking for all the parties of the estate when I say I’m very happy with the outcome. By the time I left your office after our first meeting with you, I felt entirely comfortable with the decision to list with your firm. I felt that you would be sensitive to the variety of interests inherent in an estate with multiple out-of-town beneficiaries, and you proved my instincts right. Our top priority was to get the best price possible. We also wanted it sold in a timely manner and we wanted our stepmother to be treated with courtesy and clarity, as she was anxious about moving out of her long-term home. Although you had known my stepmother for seven years, you always handled all

cli ent t est i m o n ials the parties to the estate with equal respect, taking each of our needs into account. I can’t express how much easier this degree of professionalism made the transaction. Of course, the results of the sale speak volumes of your real estate talents. After reviewing the comparable sales we decided to set an asking price on the high end. You and your team managed to sell this townhouse within a few weeks of listing. Even better, we received our full asking price. Your forthright and ‘transparent’ mode of communication works to guide and assure both buyer and seller in this business fraught with anxiety for all. As my father, a sculptor, would have said, ‘You’re an artist at what you do.’” - N.G.

“

T h a n k yo u agai n fo r act i ng as o ur broker in the purchas e o f t h e b e aut i f u l b row n sto n e [ i n t h e We st 8 0 s ] . Yo u a n d your sales staff assisted us in ways that were far above our expectations. I especially appreciate how quickly you and your staff were able to connect us with an attorney who specializes in property tax reductions. It also made all the difference in the world to be able to quickly meet with an architect who provided expertise regarding our special zoning and Certificate of Occupancy needs. … We didn’t know a great deal about townhouses or about the pros and cons of the various West Side neighborhoods. By the time we decided to purchase this building, you had clearly informed us in such a way that we could feel confident that this was the right choice. Please feel free to use me as a reference for other sellers or buyers. You and your firm were clearly head and shoulders above the other brokers we encountered, both before and during this purchase.” - E.H.

“

I am writing this letter to express our family’s g ratitude for the work you did on our behalf… When we decided to sell our brownstone in the Village, we looked around for a broker who was knowledgeable about that very special sort of property. All we could find were people who knew real estate in general but relatively little about 69

selli ng yo u r tow nhous e 19th-century Federalist townhouses. We then checked with our highly respected attorney who informed us with no hesitation that you are the expert in the city when it comes to townhouse sales. We met you and were impressed. You understood the building in far more detail than others we had approached… Best of all, through your questions you sought to understand our interests and needs. My wife and I, both psychologists, agreed that you deserved praise for your way of interviewing us. All of us together were able to come up with an honest and exquisite sales strategy. We found it refreshing to deal directly with the president of a small, specialty firm rather than with the sort of faceless corporation that abounds in New York. You helped us sell the building for the asking price of $5,950,000. One of the large firms that we had considered…had proposed to sell it for us at about a million dollars less. Our building had a senior citizen in a rent-stabilized apartment. This made achieving our price all the more remarkable. The house had been in our family for over fifty years. Four generations have known it. Relations with our tenants had consistently been excellent. We took pride in all that as well as in the condition in which we kept the house. The sale was therefore a major event for us personally as well as financially. We were concerned that our history would somehow be sullied by a crass, commercial intervention. We had little cause for concern. Dexter and his Vandenberg team were entirely professional throughout. Our tenants enjoyed dealing with them as did we. They were courteous, respectful, responsive, prompt in follow-through, and canny in anticipating possible problems. The marketing so far as we could see was excellent as was rapport with co-brokers. We parted friends, entirely satisfied and grateful.” - B.B.

“

Yo u s h o u l d k n ow t h at we d i d n ’t c o n s i d e r a n y ot h e r brokers. We had decided years ago, based on your mailings, that Vandenberg would be the best choice when we sold...[Once we hired you]... we got all the deep expertise and energetic, systematic thought and action that this book suggests. Result: happy sellers! ” - J. and J. Leon

cli ent t est i m onia ls A FINAL MESSAGE JUST FOR AGENTS

The answer is yes! We would love to team up with you. Contact us at Inquiries@TownhouseExperts.com or 212-769-2900. Receive our weekly Townhouse update, receive a referral fee, team up with us to benefit from our 72% odds of being hired, or barter for advertising on our website that generates an enormous number of buyers. YOUR NOTES:

ACKNOWLEDGEMENTS

f t h e re i s a t h e m e to o u r bu s i n e s s, i t i s t h e b e n e f i t s o f i n p ut, c o l la b o rat i o n and t eam wo rk, a s a bas is for s erving our clients. We have many to thank. For starters, thanks to Dan Sullivan and Babs Smith, founders of Strategic Coach, a brilliant coaching program for entrepreneurs. The genesis of this book began in their seminars, which we began attending in 2009. Over the years, our expert coaches there have included Lee Brower, Kim Butler, Adrienne Duffy, Shannon Waller, and Maureen Sullivan Garrelts. We have always sought the insights of thought leaders in the real estate and communications industries as well, ever since the days we were first inspired by the Howard Brinton and his national Star Power conferences. It only makes sense to benefit from the expertise of fellow professionals who have different skill sets that complement our own. It was there in 2002 that Jane met and hired Linda McLean of McLean International. She and Amy Stoehr of Real Estate Masters Guild, and their associates helped us reimagine our business model for our townhouse brokerage. Our carefully selected and trained professionals work within their unique abilities, as a “real” team, not just as competing individuals, working with assistants. Thanks to our son Julian Ordway Guerrieri, and to our dear friends Lesa Ukman, John Stiefel, Sara Gould, and Rick Surpin for providing support and advice through the years. We have received strategic advice from consultants Doug Gould of Douglas Gould and Company, Tara Slone and Karen Everett of Marketing Matters, and Teresa Easler of Connect to the Core. Award-winning graphic designer Louise Fili created the look and feel of our brand, as well as the cover and design of this book, and our logo, which has generated a multitude of compliments over the years, especially on our townhouse for-sale signs. It does “take a village.” Our work would not be as effective—or enjoyable–– without these professionals who address our client needs alongside us: townhouse and apartment contractors, Larry Burda, Sr. of Burda Construction, and Ifte Alam of Ifte Construction; real estate attorneys Sherwin Belkin, Esq. and Jeffrey Goldman, Esq. of Belkin, Burden, Goldman, LLP and Partners Craig Price, Esq., Noelle Picone, Esq., Kara Rakowski, Esq., and Diana Strasburg, Esq.; architects Michael Ingui of Baxt Ingui Architects, Paul Gleicher of Gleicher Design, and Gor-

ACKNOWLEDGEMENTS don Kahn of Gordon Kahn Associates; Diana Elton, Managing Director at First Republic Bank; Pamela Michaels, Esq., Senior Vice President, Asset Preservation, Inc.; Andrew Weltchek, Esq., Cohen, Hochman & Allen; interior designer Ellen Hamilton, founder of Hamilton Design Associates; Amanda Sullivan, founder of The Perfect Daughter: Chaos Control; and Ken Jones, Jr. and Ron Morris, co-owners, This Beautiful Life, LLC. Every idea in this book has been sharpened by our collective experiences with our townhouse clients over thirty years. Thank you for entrusting us to meet your real estate goals. Some owners have been kind enough to read and improve drafts: Joe Bulgatz, Susan Nemens, Carla Hall and Ben Friedman, Judy and Jeffrey Leon. We thank them for their time; of course, any mistakes or gaffes are our own. Many thanks to Devon Kasarjian for applying his skills to the layout of this book and to Dylan James Walker for his gorgeous photographs of townhouse living featured throughout these pages. Thanks to those editors who reviewed and edited drafts: Constance Rosenblum, previously of The New York Times; The Ninety Minute Book company; and Brianne Dyas, formerly of Huffington Post, who teamed up with us for the twelve-week home stretch, and we are very grateful to her. Past Vandenberg team members we would like to thank include: author/ playwright Rae Mariah MacCarthy (Squad, Caps Lock Theater), playwright/ filmmaker Rehana Mirza (Hiding Divya, Barriers), Maureen Palumberi who worked many years as our Financial Officer, and Andrea Bertola Shaw, filmmaker, and founder, The New York Web Designer. We are grateful to our current team members, which include Leonard Finkel, Esq, CPA, Chris Baker, Sales Associate, Ekaterina Yatcheva, Sales Associate, and Carrie Galvan, Financial Officer. Writer/producer/actor Christianne Greiert (Clutch Productions) and long-time associate Mari Schatz have both been articulate proponents of this book. Our daughter Olivia Ordway Guerrieri works on marketing, office systems, and our real estate investments. Her roles tap her expertise in technology, social media, and townhouse living to expand our brand and community to the benefit of our clients. Our long-time colleagues, Listing Director Nicole Kats and Lead Buyer Specialist Cathy Connolly are the kind of brokers who lead the real estate 73

selli ng yo u r tow nhous e industry today and are instrumental in our ranking in the top 1/1000% of the 50,000 licensed agents in the New York City metro area. Cathy possesses superior knowledge of the townhouse market, an expansive network of domestic and international contacts, and the expertise to seamlessly navigate buyers through the purchase process to closing. Nicoleâ&#x20AC;&#x2122;s track record of successful advocacy on behalf of owners is nuanced, sophisticated, strategic and her encyclopedic knowledge of townhouses and their value citywide is an essential asset to our team. They have negotiated so many of our often-complicated sales, all of which became salad-makings for this book. We could fill another book with our case studies. D ext e r G u e r r i e r i and Jane van den Berg Ordway oc tob e r 2 0 2 0

ABOUT THE AUTHORS DEXTER GUERRIERI FOUNDER, PRINCIPAL AND PRESIDENT

In his thirty-plus years of townhouse brokerage, Dexter Guerrieri is recognized as New York City’s townhouse expert. A townhouse owner and investor himself, he shares with clients his passion for all things townhouse: their preservation; investment value; strategies for maximizing each unique house’s value—and achieving it at sale; and for townhouse living. After successfully founding a multi-office, apartment-sales division for Gala Realty in the 1980s, Dexter co-founded Vandenberg in 1990 with his wife Jane van den Berg Ordway. Real estate legend, the late Austin Haldenstein, was Dexter’s friend and mentor. Under Dexter’s direction,Vandenberg became Vandenberg—The Townhouse Experts.® He assembled and trained a Team of professionals to fully address clients needs, strategically and thoroughly, in keeping with Vandenberg’s core values of excellence in brokerage. He and his Team are consistently the leaders in brokering townhouse sales, achieving record prices in multiple New York City neighborhoods year-after-year, with a market dominance as high as 21%. When Dexter and the Vandenberg team meet with owners who are choosing an exclusive agent to sell their property, they hire him, rather than other agents or brokerages, 72% of the time. The complexities of townhouses brokerage draw on Dexter’s unique abilities as an entrepreneur, which include thinking out of the box strategically, to achieve clients’ real estate goals and to maximize townhouse values for sellers. As an owner and investor himself, he not only “talks the talk,” but “walks the walk.” Dexter’s pristine reputation is evidenced by his long-standing role as Chair of the Admissions Committee of the 17,000-member Real Estate Board of New York. In 2002, he co-founded Preservation Volunteers, which links volunteers to worthy historic sites for restoration work every summer. Check out their projects at PreservationVolunteers.org. He is also Chair of the Brownstone Revival Coalition, which began back in the 1960’s when the preservation of 75

selli ng yo u r tow nhous e townhouses was a new idea. The BRC pioneered free educational seminars for townhouse aficionados, a tradition Vandenberg upholds today. He also co-founded Home Equity Retirement Options, a way for Boomers to remain in their homes and extract cash, without the burdensome debt of a reverse mortgage. Dexter excels at addressing clients' needs through press relations and generating new ideas for marketing and communication. Potential clients can look forward to the Townhouse Experts Seller's Scorecard®, which assists prospective sellers in their decision-making and can be found at TownhouseQuiz. com. Additionally, a book for townhouse buyers is in the works. JANE VAN DEN BERG ORDWAY CO-FOUNDER, CO-OWNER

Jane van den Berg Ordway, have been engaged in real estate management, investing, and brokerage for over thirty years. She and her husband Dexter Guerrieri founded Vandenberg in 1990 as an independent, residential real estate brokerage, with numerous agents. Through the company's first years, Jane was a silent partner, as she was working professionally for women's rights internationally, first in 1981 as Research Director for the Robin Morgan’s ground-breaking Sisterhood is Global: The First Anthology of the International Women's Movement, (Anchor Press/ Doubleday 1984). In 1987 she joined the International Women's Health Coalition (IWHC) to work with Joan B. Dunlop and Adrienne Germain. She developed IWHC's brand, infrastructure, and public education program, fostering constituencies and political will for centering women and girls in global population and development policy. IWHC's collaboration with women leaders from the Global South brought about a paradigm shift at the United Nations International Conference on Population and Development in 1994, altering the global agenda. In 2000, after having children, Jane devoted her time to working with Dexter, shaping their brokerage to focus on townhouses—their passion. Together they transformed it into Vandenberg—The Townhouse Experts.® They formed a team of professionals collaborating for the benefit of the client. 76

ABOUT THE AUTHORS Jane's expertise in brand development, content creation, communications, and front- and back-stage systems helped usher in Vandenberg as New Yorkâ&#x20AC;&#x2122;s townhouse market leader. Today, Jane is a leader at Vandenberg and founder of Courage Chronicles: How Women Transformed the Global Agenda, (CourageChronicles.org). A recipient of a grant from the MacArthur Foundation, her project preserves and documents the untold stories of women leaders from the Global South, whose unprecedented collaboration expanded human rights. She works with Dexter, their daughter Olivia Ordway Guerrieri and the Team to keep Vandenberg's content, marketing, and public relations on the cutting edge. Jane and Dexter live in their townhouse in Brooklyn Heights.

D exte r G u e r ri eri and Jane van den Berg Ordway Contact us: Dexter@TownhouseExperts.com TownhouseExperts.com 212-769-2900 @TownhouseExperts

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THE TOWNHOUSE EXPERTS ® GUIDE

SELLING YOUR TOWNHOUSE

Dexter Guerrieri and Jane van den Berg Ordway Dear Fellow Townhouse Owner, You should benefit from other sellers’ experiences, their successes, and their non-successes. Your townhouse is perhaps your largest asset and it really doesn’t make sense to wing it. Save these strategies for the future or give a copy to your neighbor. - Dexter and Jane “We interviewed four companies with whom we had been most impressed over our 40 years as owners. I am absolutely certain we made the correct decision with Vandenberg. They were professionals in every aspect of the sale, and we are completely satisfied that we left no 'money on the table.' I recommend Vandenberg to fellow East Side townhouse owners because I feel that they are truly "The Townhouse Experts" for all of New York.” - G.W. “Our experience was enjoyable, simple, and extremely productive. After several unsuccessful attempts to sell our townhouse, we contacted Vandenberg. They provided a frank evaluation of the property and recommended specific staging to get the price we wanted. A few months later, we had closed the deal—despite the 2020 crisis. We have also purchased several townhouses from Vandenberg, and we will definitely work with them in the future.” - M.B. and P.B. “It was very clear that Dexter and his exceptional team at Vandenberg were the best, and only, group to sell our townhouse. Of course, I wish that I had this book in hand before I started the process. It is a real "keeper.” - C. H.

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