Skip to main content

Featured Post

Atlantic Yards/Pacific Park graphic: what's built/what's coming + FAQ (pinned post)

“I was just a hired gun,” says broker Ryan Serhant re Bed-Stuy foreclosure sales (same for 550 Vanderbilt?)

The 12/20/17 Buzzfeed article by Lisa Riordan Seville and Lukas Vrbka, They Lost Their Homes. Now A Reality TV Star Is Selling Them., is subtitled, "Behind the scenes of Million Dollar Listing New York are black and Latino families who lost their homes in the wake of the subprime mortgage crisis."

(It was written with the support of an investigative reporting grant by the Urban Reporting Program of the CUNY Graduate School of Journalism.)

It's a sad and sobering story of sketchy--if not necessarilyillegal--behavior by real estate investors and the tone-deaf (and willfully oblivious) performance of Ryan Serhant, a star of the reality TV show Million Dollar Listing New York, who opened a Nest Seekers International office in Bedford-Stuyvesant to sell houses from there and adjacent Bushwick.

From the article:
What Million Dollar Listing’s viewers did not learn, and what Serhant told BuzzFeed News he did not know, is that before the fresh paint and white Carrara marble, these houses were teetering on the edge of foreclosure.
Their transformation into reality TV dream homes played into a growing crisis in affordable housing, with vulnerable New Yorkers losing their grip on homeownership just as the value of their homes is skyrocketing.
“It’s a land grab,” said Catherine Isobe, an attorney at Brooklyn Legal Services. “It’s a big wealth transfer from people of color who scraped and saved to get these houses when no one wanted to live in these houses, to the white people who now want to move in.”
The authors estimate that the real estate investors "bought the houses from sellers facing foreclosure for a median price of $305,000, and within about 17 months, they had sold 27 of them for a median price of just over $1.5 million." 

That's hardly pure profit, of course, since they had to invest in renovations, lien removals, debt repayment, and more, but that suggests a significant cut for Serhant and his team. (It's also an argument for a flip tax, by the way.)

The authors found 12 cases where homeowners alleged deception by the buyers, with four cases leading to court rulings in the homeowners' favor, three cases resolved by the parties, and five facing continued litigation.

The hype

From the article:
They [Serhant and investors] inked the deal in September 2015. At the time, Serhant said [on Instagram] it was for about 70 homes. On television, he called it 100. [Investor Michael] Gendin described it as “roughly 20” and said the big numbers were “for publicity.” BuzzFeed News identified 31 listings...
In response to questions from BuzzFeed News, Serhant said he didn’t know the investors were his landlords, or that the luxury townhouses he was listing had recently been in foreclosure. He’s only there to sell them. “I was just a hired gun,” he said.
Gendin, however, is candid about the fact that “distressed assets” are his business. . 
Serhant sounds not a little tone-deaf:
Now 32 years old, GQ handsome, a TV star, and a millionaire, Serhant has little patience what he calls the “grouchy” critics of soaring prices in New York’s lower and middle class strongholds. To him, surging home values signal progress. “I think progress is a good thing,” he said. “If you don't like it then there are open swaths of land in South Dakota that will be the same for the next hundred years. I can almost guarantee it. So they should go there.”
The AY angle
Serhant, of course, was the high-profile broker chosen last summer by Greenland Forest City Partners to boost sales at the 550 Vanderbilt condo.

Behind that boost was a stealth effective price cut, involving lowering of the cost of ownership thanks to a maneuver drastically lowering monthly taxes, as I wrote

Even beyond that lowering of taxes, the developer and the broker advertised spurious $1 taxes (as shown in the screenshot at right), and refused to answer questions about that.

Perhaps his answer would be, "I was just a hired gun." 

Perhaps the developers will take truth serum someday.



Comments