Developing Air Rights

Read this terrific article - Want to buy some air? Some cities have plenty to sell - to appease your interest in air rights and development.

2 Takeaways:
a) Developing a deck (the platform in the air where development happens) to build upon is quite expensive; &
b) Financing is limited as there are minimal real property rights associated with air rights, which can be foreclosed upon (collateral).

Based upon the expense and lack of collateral, perhaps development for air rights is ripe for crowdfunding to get the job done. In crowdfunding, accredited investors (net worth of more than $1 million or have earned $200,000 in each of the previous 2 years) can provide the requisite funding in consideration of equity stakes in the development company, to get the project funded, built, and ready for tenants.

10 Secrets to Closing the Deal

Highlights from Andrew Lieb's latest article featured in Dan's Papers...10 Secrets to Closing the Deal

1. Confirming Deeded Ownership
2. Setting the Listing Price
3. Staging and Active Concealment
4. Proactive Home Inspection
5. Broker's Loyalty
6. Budgeting for Transaction Costs
7. Certificate of Occupancy
8. Survey and Boundary Line
9. Avoiding Capital Gains Tax
10. Clearing Liens

Read the full article in Dan's Papers 

Real Estate Agents Forbidden to Use Air Drones for Listings

If you are a licensed real estate agent and have ever used or are still using air drones to take photographs of properties to improve your listings, stop now and do not do so again. The Department of Transportation’s Federal Aviation Administration has recently provided clarification on the FAA Modernization and Reform Act of 2012, prohibiting the commercial use of model aircraft.  

Under this Act, a model aircraft is defined as an unmanned aircraft that is flown recreationally within visual sight of the aircraft operator. There are numerous statutory requirements that aircraft operators must adhere to when flying model aircraft, such as the weight of the aircraft and where and when the aircraft can be flown. However, the most important statutory requirement for real estate agents is that the aircraft must be used only for recreational purposes.

Millions of Americans have joined aircraft clubs in order to build and fly model aircraft and have used model aircraft to take aerial photographs and video of their communities, gardens, and farms. This is allowed. If you are using a model aircraft to take photographs for pleasure and do not intend to use or sell the photographs for your business, then you do not violate any statutes. Real estate agents, however, use model aircraft for commercial purposes, violating the statutory requirement of recreational use. For example, many real estate agents use model aircraft to take aerial shots of properties for their listings, especially if the properties are large and have a high sales price. With high commissions at stake, real estate agents are willing to put forth the extra effort to take these aerial photographs and improve their listings to catch a worthy buyer’s eye. It is important to note that if a real estate agent is caught using model aircraft to take photographs of properties for listings, the Federal Aviation Administration, under this Act, may fine this real estate agent (or exact punishment in any other way it deems necessary) for the violation of this statutory requirement.

Since the Federal Aviation Administration has the power of enforcement, it is wise to avoid using model aircraft for commercial purposes at all costs.

Stay tuned for an update on what kind of fines the FAA can exact on violators.

Agency Disclosure - Free CE on 8/14 in Hauppauge

Instructor: Andrew Lieb

Sponsor: Citibank

Credits: 3

Cost: Free

Every broker must send their agents to this continuing education course to learn Agency Disclosure.

This course will answer the maddening questions that are always in the back of every real estate agent’s mind in brokerage: How do I fill out the form? Who do I work for? How can I get both sides of the deal? Can the Department of State fine me if I mess this up? Why does my broker care so much? Does this affect my commission? How about my license?

You will learn the whole enchilada about agency from disclosure in the presence of another broker to disclosure by electronic means to disclosure at an open house to disclosure when your client / customer refuses to sign the form, and so much more. You will be familiarized with the applicable statute, the relevant regulation, court cases that decipher your duties and DOS Administrative Decisions that fine violators. This course even includes a skills component where you will learn how to fill out the Agency Disclosure Form in every possible scenario. Finally, you will get it right. It’s mandatory to practice Agency Disclosure and after taking this course, you will.

Seats fill up quickly.  Click Here To Enroll

Hamptons Real Estate by the Numbers

The Great Recession is finally showing signs of letting up, but this is old news to real estate agents in the Hamptons where the housing market recovered long before Main Street felt any relief. In 2013, the Hamptons and North Fork of Long Island saw approximately 2,600 real estate transactions – a 70% increase over 2009 when the Great Recession was at its lowest point. That number is poised to grow this year. With that in mind, let’s take a look at some of the eye popping numbers from the Hamptons this year.

The $147,000,000 Estate.  This summer, Barry Rothstein, founder of the hedge fund Jana Partners, purchased an 18 acre beachfront estate in EastHampton for a reported $147,000,000, making it the most expensive single family home ever sold in the United States. The average home price in Suffolk County is approximately $347,200, meaning Mr. Rothstein could have purchased 423 homes for the price of his Hamptons estate.

High End Homes.  According to Douglas Elliman Real Estate’s Q1 2014 market report, the average sales price in the Hamptons checks in at $1.7 million.  To show how skewed that number is by high end luxury sales, the median sales price is $880,000 – roughly half the average.  According to hreo.com, the Hamptons multiple listing service, 282 homes are listed for sale at $10,000,000 or more, a bargain compared to the $147,000,000 Rothstein Estate.  In the 1^st Quarter of 2014 alone, there were 37 sales over $5,000,000. Nationwide, purchases costing $1,000,000 or more represent 2% of all home sales. Of the homes listed on hreo.com, more than 67% check in at $1,000,000 or more.

“Average” Homes Disappearing.  Hreo.com searches reveal that there are only 183 homes for sale in the Hamptons region, which stretches from Remsenberg to Montauk, listed at $350,000 or less, the average home price in Suffolk County. Of the 5,330 listings on hreo.com, only 3% are at or below the Suffolk County average. For those of you keeping track, there are more homes for sale over $10,000,000 in the Hamptons than there are homes under $350,000. Meanwhile, nationwide, the median home price is $188,900. At that budget, there are 27 homes for sale in the Hamptons, all of which are 1 bedroom summer retreats. Even mobile homes in the Hamptons come at a premium, with this mobile home checking in at a cool $199,000. 

Summer Rentals. According to some estimates, the population of the Hamptons increases by 500% from winter to summer. As a popular vacation spot, it should come as no surprise that many Hamptonites choose to rent a summer home instead of buying. What may shock you, however, is the price of some of these rentals. With the rental season already well underway, there are still 186 homes for rent in the Hamptons on hreo.com at a cost of over $350,000 for the summer, meaning there are more Hamptons summer rentals still available over the Suffolk County average home price than there are homes for sale at or below the Suffolk County average.

When looking to make your summer escape to the Hamptons, remember to bring your wallet with your sunscreen!