As agents, it can be easy to assume that every deal will follow a familiar path. There are the milestones we all know need to happen to get to the closing table, but there are also countless variables in between that can derail a transaction if we are not paying close attention.
I experienced this firsthand in the recent sale of a significant historic property in Clinton Hill, Brooklyn, where I represented the buyers and had to rely on deep diligence, strong partnerships and proactive problem-solving to help get the deal across the finish line.
The importance of deep diligence
In New York City, every party in a transaction is represented by a real estate attorney. Because of that, many brokers rely almost entirely on attorneys to conduct the critical due diligence surrounding a property before a contract is signed. While it is absolutely the attorney’s role to advise clients on the legal implications of those findings, leaving the process entirely to counsel can mean missing important opportunities to add value and build trust with clients.
For this deal, I was fortunate to be working alongside an exceptional attorney, and the process was very much a team effort. The first hurdle involved a 150-year-old-plus Otis elevator that had been advertised as working. Our initial negotiation included a credit from the sellers based on what we understood the elevator issues to be at the time the deal was accepted.
Rather than taking that information at face value, we brought in one of the few Otis specialists in New York City to personally inspect the elevator and advise on what would be required to bring it back to working order. Their assessment revealed that the most viable path forward was not a simple repair, but a full restoration. The cost was significantly higher than the original figure we had been provided.
The property is located in a historic district, which meant that anything related to exterior changes, whether proposed in the future or completed in the past by former owners, had to be reviewed in connection with the New York City Landmarks Preservation Commission.
During diligence, we discovered that a project on the rear of the property had been completed years earlier without LPC approval, resulting in a violation that remained unresolved through the transfer to the then-current owners.
Anyone who has dealt with LPC in New York City knows that it can be a delicate process and one that often requires careful interpretation. To get as much clarity as possible, we engaged a team of architects to review the history of physical changes to the exterior of the property. Their expediter also met with the commission to better understand what would be required to cure the outstanding violation.
The result would have created a significant cost for my clients, and we did not feel comfortable allowing them to absorb the financial responsibility for an issue that predated their ownership.
I am a firm believer in negotiating based on facts, then layering the emotion on top of it. When it came time to return to the sellers with our request, we knew we needed documentation to support our position. We compiled the elevator restoration quote; estimates from architects, contractors and ironworkers; and other relevant materials before presenting our proposal.
Within 48 hours, we had signed the contract with the appropriate restructuring of the deal in place.
It’s never over until it’s over
After the contract was signed, we all breathed a collective sigh of relief. But if this business has taught me anything, it is that you can never assume a deal is done until it has actually closed.
After financing was in place and we completed a successful final walk-through, another issue surfaced: a last-minute sidewalk lien from approximately 15 years prior. Thankfully, our team of architects and expediters was still in place, and we were able to move quickly to understand the implications of the lien and how it could affect my buyers if they closed with it unresolved.
On the morning of closing, while the attorney handled the credit negotiation surrounding the sidewalk lien, someone needed to physically go to the Kings County Clerk’s office to see if the original document could be located in the records room. Many agents may have waited to see if an expediter could get there, but I did not feel comfortable taking that risk. I went myself, waited outside before the office opened and searched through the records to find what we needed.
Ultimately, the specific portion of the document that would have supported our assumptions did not appear to exist, at least based on what anyone there could locate. But confirming that in person gave us the clarity and leverage we needed to reach an appropriate solution.
The deal could have fallen apart on the day it was supposed to close. Instead, it closed, and my buyers are now able to call one of Brooklyn’s most iconic properties home.
The bottom line
For me, the experience reinforced several important lessons:
- Do not take anything at face value
- Surround yourself with the right specialists
- Stay close to every detail
- Remember that advocacy does not stop once a contract is signed
As real estate agents, we wake up every day without a guaranteed paycheck, often wondering where the next deal will come from. But there is no magic shortcut to building a successful business. The work is in showing up fully for the client in front of you, staying one step ahead and being willing to do what the deal requires.
The best way to celebrate closing a tough transaction is to take those lessons with you into the next one.
All July, it’s Luxury Month, and we’re going deep — surveying the market, spotlighting the top producers who own it and bringing you the playbook for breaking into high-end deals. The month caps off at Luxury Connect in San Diego, where we’ll announce this year’s Golden I Club honorees.
Luke Hoback is a Licensed Real Estate Salesperson at The Agency in New York City. Get connected on Instagram or LinkedIn.
