The New York Times
November 5, 2005
Your Money
Location, Location, Location. Research, Research.
By DAMON DARLIN
Three years ago, Matthew Haines was remodeling a five-family
brownstone he bought in Harlem when inspiration hit him. "There
were all these abandoned buildings that were holding down my rent
roll," he recalled saying to himself. "What can I do to make other
homeowners comfortable buying here?"
What they needed, he decided, was the ability to research a
property - to see its recent sale prices, the prices of other
properties in a neighborhood and even a glimpse of its potential
problems. Buyers could obtain that data, but it would take days,
trotting from one government office to another. "Some of the
information is so arcane that you might as well not use it," Mr.
Haines said in a telephone interview.
His solution was PropertyShark.com, a Web site he founded that
details New York real estate like no other. Here in one spot are
layers of data from public records. "We saw our site as an
opportunity to level the playing field," said Mr. Haines, a
software developer.
As real estate markets across the United States begin cooling, the
playing field is shifting to favor the buyer. In many communities,
a seller no longer holds as powerful a position during negotiations
as was the case even four months ago. Buyers will want to play
whatever slight advantage the market is giving them. To do that
well, they need as much information as they can get. In the hands
of the buyer - or the seller - information from data-packed Web
sites like PropertyShark can pivot the negotiation dynamics.
Chances are, your neighborhood or the neighborhood you covet is no
longer the strong sellers' market it was earlier this year. Philip
Weingrow, a Century 21 Heritage broker who works the areas across
the bay from San Francisco, said that 40 percent of homes sold were
still receiving multiple offers as agents deliberately priced homes
at a discount in hopes of building a bidding frenzy. But that's a
far cry from the 75 percent rate he was seeing only a few months
ago. Buyers are no longer sending pictures of their youngest child,
at her most adorable, with the caption, "Madison needs a place to
sleep."
Of course, as the market shifts sellers have to stay alert, too. If
you're a seller, you are already hearing real estate agents
advising you to increase the portion of the commission that your
agent shares with the buyers' agent in order to make the listing
more attractive. Really? Think about this: You are paying your
agent more than enough to bring in the buyers' agents. Buyers will
come if the house is priced right, not because their agent will
make $15,000 more. Save your money and spend some time doing some
research into home values.
While the pendulum is starting to swing, it isn't a buyers' market
quite yet. "There may be individual desperate sellers," Mr.
Weingrow said, "but if a seller has a lot of equity in the house,
he isn't going to be desperate." Until that time comes, what makes
the seller sit up and take notice is that you start asking for
concessions. The more information you have about a property, the
more you'll know what to ask for and your negotiating position
strengthens.
Start on the Street Real estate agents rarely urge you to talk to
neighbors, but many acknowledge you can find out a lot about a
neighborhood's defects and charms that way. If you hit someone
gossipy, you may even discover secrets about the property you are
looking at and the circumstances of the sellers. (This is one way
the feature on PropertyShark that reveals neighbors can be so useful.)
Look at Public Information In New York, a site like PropertyShark
is invaluable because with a few clicks, a prospective buyer can
find information on assessments, building permits, repairs, code
violations, as well as flood maps, crime statistics and the names
of neighbors or prospective sellers. Many counties and cities have
put real estate records on their Web sites. Go to SearchSystems.net
for pathways into various local government databases. You should be
looking for the sales history of the property and those homes
surrounding it that are similar.
You should also check the test scores in public schools even if you
have no children. Neighborhoods with excellent scores command a
premium because the homeowners presumably won't have the expense of
private schools. But if scores are slipping, you may be paying a
premium for nothing.
As for other concerns, Jon Sturm, an agent with Boardwalk Realty in
western Los Angeles, said a client called the Santa Monica police
department and obtained crime statistics for a neighborhood.
Some of the most valuable data are the permit applications. You may
want to know about electrical or plumbing upgrades or the
replacement of a roof. The permits may tell you whether that garage
that has been converted into an apartment is legal. Sure, the
sellers are supposed to disclose all these things. But do you think
they do?
It may not be as easy as clicking a mouse. The city of Portland,
Ore., packs its site, www.portlandmaps.com, with this sort of
information. But few cities have gone to the trouble of putting up
permit applications. You could go down to the offices yourself.
Better yet, send your agent. This is what agents, especially those
who brand themselves as "full service," should be doing for the 2.5
percent to 3 percent commission they get when the deal closes. Put
them to work for you.
Have the Home Inspected Make sure the purchase is contingent on
your acceptance of the inspection report. That may seem like basic
advice, but inspections fell by the wayside during the home-buying
frenzy. If you use a thorough inspector with no ties to the agents
in the deal, you should have a good idea of the problems with any
house. If your own online and on-the-street investigations raised
some suspicions, you can ask the inspector to pay special attention
to those areas.
Ask for Cash at Closing This will allow you to fix whatever is not
up to snuff - at the seller's expense. Don't agree to allow sellers
to fix problems as they are heading out the door. If you arrange
the work, you'll be able to supervise it and make sure you are
satisfied with the outcome.
How much can you ask for? If there are no other offers behind yours
and the neighborhood has several other comparable homes on the
market, request appliances, repairs of cracked windows and damaged
floors, as much as you want. You may not get it, but it can't hurt
to ask politely.
"We will be seeing the disappearance of the 'sold as-is' listings,"
said Linda Caplinger, a broker in Los Gatos, Calif. In fact, she is
seeing more listings in the Portland area, where she wants to
invest, offering credits, right in the listing, to cover flaws in
the house.
Here are some of the best sources of online information and the
models for what Web builders should be doing in every city.
PropertyShark.com Its strength is New York City. PropertyShark has
data for about a dozen metropolitan areas. But only in the New York
section can you drill down to get layer upon layer of data like
Federal Emergency Management Agency flood maps laid over your
neighborhood. You can even see the names of all your prospective
neighbors - with phone numbers in many cases. It is free if you
limit your use to a few reports a day.
PortlandMaps.com The city government built what has to be the best
government-run real estate site. It lets you search for houses of a
certain age, size or price range and then displays the results on a
Goggle map. And that's all properties, not just the ones that are
for sale. Then you can check for permit history or hazards. (It
doesn't give out property owners' names though.) For Los Angeles,
iMapLA (imapla.lacity.org) is a good, but slightly less ambitious
city site.
HomePriceRecords.com This site pours county records of property
sales into a Google map. It is a good tool for residents of the Bay
Area, Los Angeles and Chicago because they can see in an instant on
a map the prices that houses fetched. The site struggles with data
from New York, however, and that section isn't as useful.
HomeSmartReports.com The reports on this site will cost you a
little bit of money, $7 for a limited report and $25 for more
detailed data on each property. Type in an address and it gives you
sales history and comparable prices in the neighborhood. Lot of
sites do that, but this one assesses the market conditions of the
neighborhood, even flagging foreclosures or rampant flipping.
RentSlicer.com If you are buying rental property or property you
intend to rent, this kind of site will be invaluable.
Unfortunately, it's for the Los Angeles region only.
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