By Luke Constantino
Most people who enter the real estate field think they are going to make money with no flaw, no waste of time, this isn’t always the case. I have been doing real estate for over 20 years and ran into my worst year ever. Knowing all the games, ins and outs and techniques sometimes isn’t enough. It’s all a game of numbers: Some are gains… Some are loses. Here are some factual accounts of some of these loses:
I was contracted to work with this multi-million dollar high end car dealership owner from outside the NYC area. He wanted a commercial lot, 40,000sq/ft+ in a desirable area. I did my due diligence on the man and his business, went through my many commercial contacts/sale areas and came up with 14 different locations… HE DENIED THEM ALL. Not for my lack of work, but for his lack of knowledge of locations, prices and demographics. These were all written in a prospectus like folder given to him along with verbal description. Sometimes your best laid plans can fold for reasons unknown.
TIME WITH CLIENT: 3+ MONTHS
POTENTIAL COMMISSION LOST: $240,000
Sometimes you get a listing that is way over-priced. This is not uncommon, especially in the inventory shortage they have in Manhattan. You orientate the seller of the fair market value, how much you estimate to get and they tell you their bottom line, along with a commission breakdown. This seller bought a building at 8.5 million and put it out on the market for 13 million. The sellers bottom line? 11.5 million. I advertised it and told my investors, revised the rent roll and expenses. Many investors were coming in at 10.5MIL, 2 at 11.5MIL… Sold, right? NO. This greedy seller wanted more. Long story short, I had an investor at 12.25MIL. FIRM. The highest price to be paid for a building like this in that area… The seller refuses once more, stating he needs the money to retire and wants 13 million. I did the whole your property is only worth so much and you shouldn’t place your financial burden thing to not avail. Will he get it? I doubt it.
TIME WITH CLIENT: 4 MONTHS
POTENTIAL COMMISSION LOST: $390,000
Years ago, I did rentals, I was quite good at it. Most of my clients had the utmost confidence/ respect for me and would call me years later when their previous tenants were ready to move. This person I got renter’s for wanted to sell their house and retire to another state. This is one of the reasons we do what we do… A win/win situation. Without warning, a family feud insures inside the home with everyone wanting to go in different directions if the house sells… YOU CANNOT MAKE THIS STUFF UP. I’ll probably sell the house when the smoke clears… Who knows when that might be?
TIME WITH CLIENT: 1 MONTH (But know them 12 years)
POTENTIAL COMMISSION LOSS: $39,000
A woman calls me after hurricane Sandy, she wants to sell what’s left of her home. I told her I would only be able to get her about 1/4th of what the home was originally worth… If that. Since Sandy the house hasn’t sold, but has been fixed, with the price changing accordingly. The wants me to put the house on the market at fair market value, which no other house it at due to the hurricane… I GET FULL ASING PRICE!!! I call to congratulate the owner (another thing us Realtors work for and love) and the seller tells me they cannot sell at the time due to some personal health problems I cannot disclose… AGAIN… YOU CANNOT MAKE THIS STUFF UP!!! Another house temporarily off the market till further notice.
TIME WITH CLIENT: 2 YEARS
POTENTIAL COMMISSION LOSS: $36,600
The seller of a beautiful prewar condo contracts me to sell the place, pretty much what we call in the real estate business “A slam dunk”. A very high end real estate company (I use to work for) was advertising the condo upstairs for 1.6 million, which went into contract. Working off the buzz from this and creating my own I pushed the lower floor condo up to 1.7 million!!! I’m buzzing, feel like “Houdini” awesome!!! The tenant, a self-proclaimed artist/night club promoter senses his renting the place is near, doesn’t ever want to leave or be bought out, calls his attorney and doesn’t allow anyone in to see it. GOD KNOWS HOW LONG THIS WILL BE LITIGATED IN COURT!!!
TIME WITH CLIENT: 2 MONTHS
POTENTIAL COMMISSION LOSS: $70,000
I have a few other vampires in my closet that have sucked time out of my life last year, and as we know in this business, time is money… Money that you cannot get back. I have literally sold every type of property in every borough of NYC and this still happens. I just goes to show: No matter how good you think you are, these things happen… Even to the best of us!!!
Grand commission loss total: $775,000.
I would have been happy with a quarter of that ($193,750).
Think about that next time you’re faced with splitting your commission.