Discount brokerages launch fresh attacks on size of residential fees

American broker fees are among the highest in the world. (Getty)

American broker fees are among the highest in the world. (Getty)

The age-old question of what justifies broker fees often comes up as people embark on buying or selling their homes — and discount brokerages are egging on the conversation.

American home sellers and buyers pay among the highest fees to agents, the New York Times reported. In the U.S., the standard fee is 6 percent, with 3 percent going to the seller’s and buyer’s agents, respectively. Compare that to Asia or Europe, where standard broker fees are as low as 1 or 2 percent.

There have been a string of lawsuits over the past two years accusing the residential real estate industry of conspiring to keep broker fees high and violating U.S. antitrust laws in the process. The instigators range from private citizens to the U.S. Justice Department, with some industry members trying to offer discount models to consumers.

As the pandemic has pushed even more of the buying and selling process online, discount brokerages with models based on online listings and transactions are keeping the subject top of mind.

Last week, Redfin announced it would publish agent commissions on thousands of public listings. It’s a move that’s in line with the spirit of the Department of Justice’s settlement agreement with the National Association of Realtors for the industry to make agent commissions more transparent to consumers and fix the industry’s misleading, incorrect advertising.

Weeks earlier, an Oregon brokerage, REX Real Estate, filed a state lawsuit challenging the state’s policy of banning brokerages and agents from refunding commissions to buyers. The brokerage is exploring filing similar suits in Louisiana, Missouri and Tennessee.

The firm says the logic behind the suit is based on the view that homebuyers are doing an increasing amount of the work to find a home without an agent’s help.

“You’re starting to see a kind of drum beat,” Mike Toth, REX’s general counsel, told the Times. “Buyers are doing so much of the work themselves. So why are commissions so high?”

The continued suits and positioning of firms like Redfin and REX indicate that pressure on the industry to reduce fees and increase industry competition is not going anywhere.

[NYT] — Erin Hudson

Wealthy buyers scoop up real estate on warm-weather islands

Cold weather and lockdowns are inspiring people to more to warmer climates. (Getty)

Cold weather and lockdowns are inspiring people to more to warmer climates. (Getty)

As the cold weather set in and lockdowns continued in many U.S. cities, the market heated up for properties on remote islands in warmer climates.

Activity is expected to increase as travel bans are lifted — and some buyers are even willing to buy sight unseen to beat the competition, according to Mansion Global.

Some island nations are taking advantage of the uptick in demand. The Saint Kitts and Nevis government will give citizenship to buyers who pay more than $400,000 for a home in the two-island nation, offering easier access to Europe.

Bermuda is also offering a one-year residential certificate to people living in the country and working in another. Barbados and the Cayman Islands have similar programs.

“We’ve seen an uptick in purchases since the pandemic, from people looking for an escape from big cities,” said Neal Sroka, a high-end real estate consultant. “They do buy without visiting, provided they know the product, so it’s much easier to sell on a branded hotel basis rather than individual homes.”

Hotel-branded condo projects are gaining popularity stateside as well. The recognizable branding gives some buyers confidence. Four Seasons entered the market in 2019 and has completed a handful of properties around the country.

The phenomenon isn’t new: The flight of wealthy urbanites from cities last year amid the pandemic fueled activity in remote island destinations and rural communities alike.

[Mansion Global] — Dennis Lynch 

South Florida resi volume tops $44B in 2020, buoyed by luxury sales

(iStock)

(iStock)

South Florida’s residential sales dollar volume rose in all three counties in 2020, reaching $44.1 billion, according to the Miami Association of Realtors.

Luxury sales led the market, rising in Miami-Dade, Broward and Palm Beach counties. While the overall number of residential sales decreased minimally in Miami-Dade and Broward, they increased in Palm Beach County, according to Multiple Listing Service data compiled by the association.

Prices also continued to rise across South Florida.

Miami-Dade

A total of 26,345 residential sales closed in 2020, down nearly 4 percent from 2019. The decrease is likely due to slow months early on in the pandemic. Of the total, single-family sales totaled 13,250 last year, a 0.5 percent decrease compared to 2019. Condo sales totaled 13,095, a 7.2 percent decline from the previous year.

Luxury sales, defined as $1 million and up, jumped 41 percent year over year to 1,447, which accounts for the surge in sales volume.

Single-family home sales volume rose 26 percent to $9.2 billion, and condo dollar volume increased 1.7 percent to $5.7 billion.

The median price of single-family homes was $402,000, up 10 percent. For condos, the median price rose 7.8 percent to $264,000.

Broward

Residential sales in Broward totaled 31,476 in 2020, a 3.5 percent decline compared to 2019.

Single-family home sales represented 16,035 of the total, a 0.4 percent year-over-year increase. Condo sales totaled 15,441, a 7.1 percent decline.

Luxury single-family home sales surged, up 43.4 percent to 1,068 closings in 2020.

Single-family sales dollar volume grew 15.6 percent to $8.5 billion, and condo dollar volume increased 3.6 percent to $3.8 billion.

The median sale price for single-family homes was $400,000, up nearly 10 percent. For condos, it was $189,000, a 10.5 percent annual increase.

Palm Beach

Residential sales rose in Palm Beach County, up 2.3 percent to 31,521. Single-family home sales totaled 18,174, a 4.3 percent year-over-year increase. Condo sales dipped to 13,347, a 0.4 percent decline.

The $1 million-and-up luxury market saw 1,922 sales, up nearly 50 percent compared to 2019.

Closed dollar volume totaled $12.4 billion for single-family homes and $4.5 billion for condo sales, up 31.4 percent and 8.5 percent, respectively.

The median price of single-family homes was $389,500, up 9.7 percent. The median condo price reached $205,000, an increase of 12.6 percent.

Corcoran launches first international franchise in British Virgin Islands

David V. Johnson and Corcoran CEO Pamela Liebman. (Liebman ph: Marc Scrivo, Oil Nut Bay)

David V. Johnson and Corcoran CEO Pamela Liebman. (Liebman ph: Marc Scrivo, Oil Nut Bay)

The Corcoran Group is going international with its first franchise outside the United States.

The New York City firm will expand into the British Virgin Islands later this month, after inking a franchise deal with Oil Nut Bay Properties Ltd., which will be known as Corcoran BVI, it said Thursday.

David V. Johnson, a developer of luxury homes, will run the 30-agent affiliate. In 2016, Johnson’s company, Victor International, developed a resort in Oil Nut Bay, on the island of Virgin Gorda. The property has 88 luxury homes “built in harmony with nature,” according to a promotional video.

In a statement, Corcoran CEO Pam Liebman said the British Virgin Islands are among the most beautiful in the world, offering a “true oasis” as a second-home market.

A subsidiary of Realogy, the Corcoran Group has been franchising in luxury and second-home markets.

Its first affiliate, Corcoran Global Living, launched early last year in San Francisco and Lake Tahoe. It now has 42 offices and nearly 1,500 agents and claims gross annual sales of $6.1 billion.
In November, Corcoran Global Living absorbed Los Angeles-based PLG Estates, which described its approach to real estate as “punk rock.”

Corcoran has also started franchises in Miami, Chicago and Hawaii, where it struck a deal with a 250-agent firm, Elite Pacific Properties, that was renamed Corcoran Pacific Properties.

Photographer pays record $8M for Biscayne Point spec home

Ira and Paula Resnick with 1410 South Biscayne Point Road (Getty)

Ira and Paula Resnick with 1410 South Biscayne Point Road (Getty)

Author and professional photographer Ira Resnick bought a waterfront spec home in Miami Beach for $8.2 million, a record for the Biscayne Point neighborhood.

Ira and Paula Resnick, as trustees of family trusts, bought the home at 1410 South Biscayne Point Road, records show. 1410 S Biscayne Point Rd LLC, managed by Diane Dreyfuss Owade and Michael Owade of Owade Development + Design, sold the house.

The sale marks a record for Biscayne Point, according to Alexander Goldstein, who brokered the deal. The previous record was held by 1220 South Biscayne Road, which sold for $5.5 million in July.

Alexander Goldstein

Alexander Goldstein

It also sold for more than the $7.8 million asking price.

Ira is a professional photographer who has authored photo books such as “Ira Resnick: A Decade through My Lens” and “The Seventies: A Photographic Journey.” He is also the founder of the Motion Picture Arts Gallery, an art gallery devoted to the art of movies.

Paula Resnick is the founder and executive director of the Ira M. Resnick Foundation and the president of the board of trustees and executive director of The Meeting House in New York, according to Ira Resnick’s website.

The lot last sold in 2016 for $2.1 million. The 5,383-square-foot-home was completed last year. It hit the market in December.

Goldstein of Miles Goldstein Real Estate represented the seller, and Stephanie Doppelt of Berkshire Hathaway HomeServices EWM Realty represented the buyer.

The six-bedroom, seven-bathroom house sits on an 11,250-square-foot lot with 75 feet of water frontage. The home also features a heated saltwater pool and a gym, according to the listing.

Recently in Miami Beach, the co-founder of discount and coupon app Honey bought a Venetian Islands home for $15 million, a waterfront spec home sold for $13 million and the president of a mortgage company bought a Hibiscus Island home for $11.8 million.

Honey co-founder buys waterfront Venetian Islands home for $15M

Honey co-founder Ryan Hudson with his new Venetian Islands home. (LinkedIn via Hudson, 508 W Dilido Drive)

Honey co-founder Ryan Hudson with his new Venetian Islands home. (LinkedIn via Hudson, 508 W Dilido Drive)

Did he save time and money on the purchase?

Ryan Hudson, co-founder of the discount and coupon app Honey, paid $15 million for a waterfront home on the Venetian Islands.

Karim Masri, managing general partner of KNR Nightlife Group and KNR Hospitality Group, sold the house at 508 West Dilido Drive in Miami Beach to Hudson, property records show.

Hudson co-founded Los Angeles-based Honey browser extension app in 2012, and the company has offices in Boulder, New York, London, Santa Barbara and Sydney. PayPal bought Honey for $4 billion in 2019.

Masri paid $2.8 million for the Venetian Islands property in 2012, and completed the 5,501-square-foot home in 2018. It hit the market in 2019 for $15.5 million, and the price was increased the following year to $15.8 million, likely due to the increase in demand for waterfront homes in Miami Beach.

Dora Puig of Luxe Living Realty represented Masri, and Betsy Madge with Compass represented Hudson.

The home, which sits on a 10,500-square-foot lot, has four bedrooms and four-and-a-half bathrooms, a pool, 60 feet of water frontage and a dock with a boat lift. It was designed by Strang Design and has solar panels.

Last year, PayPal co-founder Peter Thiel bought two mansions on the Venetian Islands for $18 million.

Recent Venetian Islands closings include a Canadian financier’s $15.5 million sale of his waterfront mansion. A company linked to homebuilder AquaBlue Group’s owner Philippe Harari also bought a teardown for $11.8 million.

Related to partner with Baccarat on major Brickell high-rise development

Renderings of the One Brickell project with Jorge Pérez  and Jon Paul Pérez (Photos via Wikipedia Commons, Related)

Renderings of the One Brickell project with Jorge Pérez  and Jon Paul Pérez (Photos via Wikipedia Commons, Related)

The Related Group is planning a Baccarat-branded three-tower development in Brickell with up to 1,400 residential units, The Real Deal has learned.

The Miami-based developer would build the high-rise project on the property at 444 Brickell Avenue, where it previously planned to build One Brickell, according to marketing materials obtained by TRD.

Related, the largest condo developer in the Miami area based on the number of units it has built, is typically the first to launch in a new cycle. Despite the pandemic, a handful of developers are working on plans for large projects, fueled in part by the huge surge in single-family home sales in recent months, which has started to spill over into high-end condos.

Related’s mixed-use luxury condo project would be managed by Baccarat Hotel and would include 57-story, 77-story and 82-story towers with hotel, office and retail components. Units would range from one to four bedrooms, and the project would include a fitness center, business center, pool and riverfront promenade, according to marketing materials.

Arquitectonica — which often designs Related’s projects, and which was previously hired to design One Brickell — is the architect for Baccarat Residences. Enzo Enea is handling landscaping.

Related declined to comment through a spokesperson.

Baccarat, a French crystal maker and jeweler, has the Baccarat Boutique B Bar and Lounge in the Miami Design District and The Baccarat Hotel & Residences in New York.

Baccarat Hotels is looking to expand in San Francisco, Los Angeles, Miami, Mexico City and São Paulo, in addition to major cities around the world, according to its website.

Related paid $104 million for the 444 Brickell Avenue property in 2013. The 4-acre property is home to an office building with a Capital Grille restaurant on the ground floor. The planned redevelopment, previously called One Brickell, had been in the works since Related bought the site, which is across the street from its Icon Brickell development.

Related, led by chairman and CEO Jorge Pérez and his son, president Jon Paul Pérez, began sales in the fall of a luxury condo tower in Pompano Beach called Solemar. The Solemar launch marked the first new condo sales launch for Related in South Florida since 2016. Related is also partnering with Dezer Development on a condo site in Hillsboro Beach.

Other developers are ramping up to launch sales of major projects this year, sources say.

Property Markets Group and E11even Partners, led by Michael Simkins, are working with Deepak Chopra on E11even Hotel & Residences, a planned 65-story, 400-unit tower northwest of downtown Miami.

According to RelatedISG’s 2020 fourth quarter Miami report, about 1,300 new construction units remain for sale out of about 19,500 units built or under construction since 2012 . The report covers new projects from Coral Gables to Fort Lauderdale, and surveys developers for sales updates.

Condo sales are on the rise in Miami-Dade. In December, existing condo sales rose by more than 29 percent, compared to December 2019, to 1,618 closings, according to the Miami Association of Realtors.

“Brady Bunch” producer sells La Gorce Island mansion for $23M

Douglas Cramer and 40 La Gorce Circle in Miami Beach (Getty, Google Maps)

Douglas Cramer and 40 La Gorce Circle in Miami Beach (Getty, Google Maps)

Longtime TV and film producer Douglas Cramer sold his waterfront La Gorce Island mansion for $23 million, shortly before buying a home in Morningside for more than $8 million.

Property records show Cramer, who produced shows such as “The Brady Bunch,” “Star Trek” and “Dynasty,” and his husband Hubert Bush III sold 40 La Gorce Circle in Miami Beach to investment manager Byron Roth in an off-market deal. Roth leads Newport Beach, California-based Roth Capital Partners as chairman and CEO.

Buyers are increasingly turning to off-market deals as the inventory of waterfront homes continues to shrink, especially in cities like Miami Beach.

Brett Harris

Brett Harris

Cramer and Bush’s sale of their four-bedroom, five-bathroom, 8,800-square-foot estate was brokered by Douglas Elliman. Eloy Carmenate and Mick Duchon represented the sellers, and Brett Harris brought the buyer. Harris said the buyer plans to keep the home, which was originally built in 1937 and later renovated.

It last sold for $7.4 million in 2012, records show.

Eloy Carmenate

Eloy Carmenate

Earlier this month, Cramer and Bush paid $8.1 million for a waterfront home in Miami, setting a record for the Morningside neighborhood. Bruce Alan Weil, a partner at Boies Schiller Flexner LLP, and his wife sold the house.

On La Gorce Island, Cher’s former home at 64 La Gorce Circle recently sold for $17 million.

In November, a member of the Jack Parker real estate family bought the waterfront teardown at 66 La Gorce Circle for $7.5 million.

Mick Duchon

Mick Duchon

In Miami Beach and the barrier islands, single-family home sales surged in the fourth quarter, rising a whopping 195 percent to 224 closings, according to the Elliman reports. Inventory fell 30 percent to 530 single-family home listings.

Trump Plaza’s condo board votes to remove ex-president’s name from West Palm towers

President Donald Trump and Trump Plaza  (Getty, Google Maps)

President Donald Trump and Trump Plaza  (Getty, Google Maps)

Trump Plaza’s condo board voted to remove the ex-president’s name from the West Palm Beach towers.

The twin towers’ board unanimously voted last week to change Trump Plaza’s name as a result of the attack on the Capitol on Jan. 6, the Palm Beach Post reported.

The move marks the latest attempt in the past year to create distance from Trump. Last year, residents voted to remove Trump signage, including street-level signs as well as the Trump Plaza signs that adorned the top of the buildings. The rooftop signs were originally taken off for repairs, but residents voted for them to remain off the building.

Trump purchased the 221-unit development at 525 and 529 Flagler Drive in 1986 and handed the buildings over to lenders in 1991. They decided to keep the Trump brand attached to the condo to help sales, according to the Palm Beach Post.

The 32-story towers have sweeping views of the Intracoastal, Palm Beach and the Atlantic Ocean, with units selling from $1 million to over $4 million. A new name has not yet been determined.

Many businesses and former partners of The Trump Organization are cutting ties in wake of the Capitol storming. In Chicago, the 3,000-square-foot “TRUMP” sign on the Trump International Hotel & Tower may also be coming down.

[Palm Beach Post] — Jordan Pandy

Waterfront Palm Beach mansion sells for $41M

1330 South Ocean Boulevard (Compass)

1330 South Ocean Boulevard (Compass)

A waterfront estate in Palm Beach sold for $40.7 million — almost $20 million below the original asking price.

Records show a Swiss entity, Sunshine Estate Partners, sold the mansion at 1330 South Ocean Boulevard to 1330 South Ocean LLC, a Delaware corporation.

According to The Palm Beach Daily News, European businessman Gerald Herz and his wife, Isabelle, are the sellers. West Palm Beach attorney Paul Krasker signed the deed in favor of the sellers.

The Swiss entity bought the mansion in April 2017 for $31.6 million from luxury home developer Mark Pulte, who finished the home in 2016, according to property records.

Linda A. Gary of Linda A. Gary Real Estate represented the sellers in the most recent deal, while Lawrence Moens of Lawrence A. Moens Associates represented the buyer. Moens also represented Pulte in the 2017 sale.

According to Realtor.com, the property was first listed in July for $59.5 million and later changed to $56.5 million at the end of October.

The five-bedroom mansion has nine-and-a-half-bathrooms and 12,830-square-feet under air, with more than 3,000 square feet of terraces and covered outdoor space. The furnished home also has 184 feet of Lake Worth Lagoon water frontage, a dock and a pool.

A company tied to Pulte listed a Palm Beach estate for $140 million to start the year, a record for the most expensive residential listing in South Florida.

Recently, spec home developer Todd Michael Glaser bought a home in Palm Beach for $13 million, with plans to renovate.