Vote No on HB 2430 in Tennessee, Urgent

Below is an urgent letter I wrote to State Representatives Beth Harwell and Mike Turner:

Representatives Harwell and Turner,

I am writing to voice my concern about HB 2430 that threatens homeowners and homeowners associations (HOA) by exempting municipal, county and state governments from the obligation to pay association fees and assessments any time these government entities acquire property through a delinquent tax sale.

As you know, more than 40% of all properties in the greater Nashville area are governed by homeowner associations and this legislation irrevocably harms every last one of those homes and condos. A vote to pass HB 2430 is a vote against homeownership and the very underpinnings of our economy. Should HB 2430 pass it would:

• Make remaining homeowners responsible for the deficit caused by the government exemption;
• Make it difficult for HOAs to budget for maintenance and expenses due to the unpredictable liability caused by this government exemption;
• Make it difficult to finance and sell properties governed by HOAs because of the potential HOA deficits;
• Cause more homeowners to default on mortgages because of added expenses that should not be their responsibility; and
• Inevitably, this would lead to further distress in the Nashville real estate market during a time of timid recovery.

No other state in the United States gives local governments this exemption from HOA fees and assessments. Tennessee should not be the first. Please oppose HB 2430 on Wednesday, February 29.

Sincerely,

Grant Hammond, Broker, ABR, SFR, ePRO

How to Take Action

It is imperative that our legislators hear from homeowners and industry professionals. If you are so inclined, please contact members of the House, State and Local Government Committee and ask them to OPPOSE HB 2430 on February 29, 2012.

Ryan Haynes (R-Knox) 615-741-2264 rep.ryan.haynes@capitol.tn.gov
Tommie Brown (D-Chatt.) 615-741-4374 rep.tommie.brown@capitol.tn.gov
Jim Cobb (R-Chatt.) 615-741-1450 rep.jim.cobb@capitol.tn.gov
Gerald McCormick (R-Chatt.) 615-741-2548 rep.gerald.mccormick@capitol.tn.gov
Larry Miller (D-Memphis) 615-741-4453 rep.larry.miller@capitol.tn.gov
Bob Ramsey (R-Maryville) 615-741-3560 rep.bob.ramsey@capitol.tn.gov
Currey Todd (R-Memphis) 615-741-1866 rep.currey.todd@capitol.tn.gov
Mike Turner (D-Nashville) 615-741-3229 rep.mike.turner@capitol.tn.gov
Kent Williams (CCR-Elizabethon) 615-741-7450 rep.kent.williams@capitol.tn.gov
Beth Harwell (R-Nashville) 615-741-0709 rep.beth.harwell@capitol.tn.gov

 

Rhythm at Music Row Condos Sold Out

With the last Cadence Bank owned condo placed under contract moved to pending earlier this week, the 105 unit Rhythm at Music Row condos have sold out. As you may recall, in a structured foreclosure on September 6th, Cadence Bank and Pinnacle Bank took possession of the 47 unsold condos in the development. Each bank listed their individual condos with local real estate brokers instead of selling them in bulk. Pinnacle bank listed their condos with Village Real Estate and Cadence Bank listed with Grant Hammond.

(final 7 condos under contract in the MLS)

Rhythm at Music Row Condos Sold

You may also recall that I postulated that if these Rhythm condos were priced correctly, the 47 would sell out in less than 9 months. I took a lot of heat for that prediction as being aggressive and unrealistic. The fact is that we collectively sold Rhythm out in only 5 months providing further proof that the Nashville condo market has bottomed out and is recovering.

Future High-Rise Condo Prices in Nashville

The Nashville condo supply has been shrinking for 3 consecutive years with no new construction in sight. We are quickly reaching a point when demand will outpace supply leading to an inevitable spike in pricing. Buildings like the Rhythm, Terrazzo and Encore which have recently sold out of developer or bank owned inventory will experience a steady price recovery over the next 12 months that will accelerate in 2013-2015.

The 5th & Main condos in East Nashville have now contracted 85 of their 129, all within the past 6 months, leading to the conclusion that this project will be substantially sold out by the summer. Once 5th & Main is sold out, there are no additional distressed condo projects. Let me repeat that: once 5th and Main sells out, there are NO more deals priced below the market. If you are a condo buyer who has been holding out for the bottom of the market, we are past that point, but there are still a few good deals remaining. Jump in soon or expect to pay a premium to live in downtown Nashville in the very near future.

♥ Grant Hammond has sold over 250 condos in Nashville since 2005. More impressively, he has never worked for a developer, all 250 sales were independent sales, making Grant the most active condo broker in Nashville. Put his unparalleled market knowledge, research and expertise to work for you.

Grant Hammond, Broker, ABR, SFR
Call or Text: 615-945-7123
Condos@GrantHammond.com

Rhythm at Music Row Condos

The Braxton in Ashland City Foreclosed, For Sale

Braxton Condos Ashland CityAfter many years of waiting, Bank of America has finally foreclosed upon the failed Braxton condo project in Ashland City. The Braxton is a 2 tower, 136 unit luxury waterfront development located next to the Harpeth Shoals Marina on the Cumberland River. Original pricing ranged from $450,000 to over $1.2 million for penthouse units.

The Braxton condos were originally developed as a luxury second residence for boaters, hence the construction of the 143 slip Harpeth Shoals Marina. The lure of the project was centered around the premise that one could take their boat to Ashland City for the weekend and have a place to stop, relax and congregate prior to returning to Old Hickory Lake a few days later. All throughout the sales period in 2007- 2008, PSLs for boat slips were included in the sale. In 2009, the sales team began advertising actual boats to be included with the purchase of a condo.

Challenges for the Braxton

Aside from the obvious challenges, the ground floor of the Braxton development was completely flooded in May 2010 during the great flood. Reportedly, there was as much as 4 feet of water in the shared lobby between the two condo towers. Additionally, the Tennessee port authority terminated its lease with the marina due to several violations that were reported by the Army Corps of Engineers. Other challenges include larger than average floor plans, the utter lack of comparables within a 15 mile radius, and an inadequate pool on the parking lot side of the building.

What Will Happen with the Braxton

Bank of America has engaged the Atlanta office of Jones Lang LaSalle to market the property for sale. That effort will begin shortly and it is expected that JLL will call for final bids as early as the end of March/beginning of April. Potential buyers will be analyzing the project from a condo, multi-family, hotel and possibly, timeshare prospective to determine the highest and best use.

As a broker who has evaluated this project for several years, I am open to working with potential bidders to aid in determining the true value of this asset. Tap into the research my partner and I have already performed and enhance your immediate understanding of the Braxton. Learn more about Ashland City, its proximity issues and who your true target market demographic is for this project.

Grant Hammond, Broker, ABR, SFR
Call or Text: 615-945-7123
Braxton@GrantHammond.com

The Great MLS Listing Syndication War

Grant Hammond discusses the great MLS listing syndication war raging behind the scenes between the San Diego MLS, Edina Realty, Denver’s MetroList, Zillow, Diverse Solutions, Trulia and Realtor.com:

I almost never post any articles concerning Realtor squabbles, but there is a massive movement building online that deserves a few moments of discussion. Recently, several real estate brokerages and MLS administrators across the country have begun to pull their listings from a few specific listing syndication sites like Zillow, Trulia and Realtor.com. More recently, the San Diego MLS has added a text field to its listings that allows listing agents to enter contact information, including names, email addresses and brokerage websites to the data that is syndicated. In a second future step, the San Diego MLS will also add a watermark to all listing photos that identifies the listing agent. The intent is to force the Zillow’s and Trulia’s of the world to identify the listing agent and brokerage.

In other words, local MLS operators (typically owned by the local Realtor Associations) and real estate brokerages are launching a movement to regain control of the Multiple Listing Service information. The general fear created is that home listing information will not be as readily available to the general public if many MLS operators take the same steps as the few who have already begun to restrict MLS information. For instance, if you live in Minnesota, Edina Realty is the 900 pound giant in that market. In November of last year, Edina no longer sent their listings to Trulia and Realtor.com resulting in the inability for home buyers and sellers to find Edina Realty listed properties on those sites. Of course, all of Edina’s listings are still available on Realtor IDX feeds, meaning that you can still find all of their properties on any licensed real estate agent’s website, including their competitors’ websites.

According to Edina’s press release, “The inaccuracies we’ve seen on third-party aggregator sites give us cause for alarm, and the reality is that we are no longer willing to surrender our business – or the consumer’s real estate experience – to third party aggregators, who are not required to operate under the same rules and laws as brokers.”

Whether or not the real basis for the change was the stated reason, the move caused a minor shockwave through the real estate community. A conversation began and many real estate agents came to the realization they were no longer in control of their data. Let me take a step back: officially, home listings are the property of the principal broker of the local real estate office that gathered the listing information. That principal broker has an agreement with the local MLS provider to centralize and syndicate that information to all of the local real estate agents. That MLS provider (Realtracs in Middle TN) has an agreement to also syndicate that information to MLS aggregators like Point2 Agent and ListHub which source the information to users like Zillow and Trulia for a fee. While I am not aware of what the fee is, I imagine it is quite substantial.

It is easy to see how data could be lost or inaccurately transferred in this convoluted process. Just as importantly, it is even easier to see how the original listing agent and brokerage are completely lost in the transfer of information. In fact, Trulia, Zillow and most other public portals go out of their way to not identify the true listing broker. Instead, their monetization model includes selling listing sponsorship to any real estate agent who is willing to pay for that privilege. This is a problem, especially if you believe in servicing your clients to the best of your ability. As a listing agent, you have just lost the ability for a potential home buyer to call you to ask important questions like: Does the kitchen have a gas cook top? Is the master bedroom separated from the main living space? How close is the neighbor’s house? Clearly, these are questions the listing broker can answer immediately.

A fear that that some real estate agents have is that by identifying the listing broker on all listings, it will create an atmosphere conducive to dual agency. I concede that this is probably true, but as a buyer’s broker myself, I feel that it is my job to educate my buyers as to why it is in their best interest to have their own representation. Perhaps it is because I am an ABR or maybe it’s because I have a strong belief in consumer advocacy, but I do not believe this will be as much as of an uphill climb as many fear.

Here’s the rub.

The true owners of the listing information, the originating real estate brokerages and MLS providers, are upset their information is being sold back to them. At the same time, these same real estate brokerages want their listings to accurately reach as many potential buyers and sellers as possible in order to sell as many properties as humanly possible. But, the reality is that the syndication model is based in an era that is no longer applicable. Realtors no longer need 3rd party aggregators to disseminate listing information as they did 15 years ago. Almost all real estate brokerages and real estate agents have websites with a direct MLS feed. This was not the case 15 years ago.

As you can imagine the real estate community is torn down the middle on this issue. On the one hand your have excellent brokers like Jay Thompson in Phoenix who advocate syndicating all of the information to every site that wants it in effort to increase exposure (I have no beef with Jay, he is simply vocal). On the other hand, you have agents like myself who believe the listing information is intellectual property that needs to be handled with care. I do believe the information could be selectively syndicated, but we need to choose partners who will treat the information as we would. It needs to be accurate, not misleading and timely. For example: too many times, aggregators will knowingly display listing information they know to no longer be available because they live in a world of page hits, advertiser impressions and click-thrus. Simply put, their interests are no aligned with our client’s and that is where most problems arise. I do not believe that Trulia, Zillow or Realtor.com currently meet these best practice standards.

The best analogy I can think of.

What if the NFL broadcast the Super Bowl to every single TV network in the United States, but did not require those TV networks to sign a specific licensing agreement? In that same light, the NFL neglected to collect the appropriate licensing fee and further neglected to share that fee with any of the team owners and players. To complicate matters, the NFL then permitted the rebroadcast of the Super Bowl at anytime and allowed networks to splice together or cut the game short if they secured more advertisers. Further, the NFL did not have the ability to control or monitor what the announcers said on any of the networks leading to inaccurate statistics and scores. Finally, some stations decided not to air the current Super Bowl and just reran last year’s game to save some time and trouble.

It is clear that the above example is a broken system. The NFL would no longer have the ability to protect the integrity of its product and would lose viewership, market share and trust. This is exactly what is happening with MLS listing information. While certain rules and licensing agreements do exist, they do not go nearly far enough to protect the integrity of the information. Enter the San Diego MLS and their new protocols to help protect the original owner of the listing information. While I think what San Diego is implementing is a very good first step, there are many more to go before I am ready to declare several syndication sites good partners. Nor am I ready to concede the point that these 3rd party sites are even needed in 2012. Do a Google search for real estate in any city in the United States and tell me if you cannot find the properties for sale on a real estate agent’s website on the first page of the Google results. You will be hard pressed to prove me wrong.

A bad situation gets worse.

Enter the National Association of Realtors. Yes, NAR wants to get in on the lucrative listing aggregation and syndication game too. NAR wants its members to sign off on allowing the association to collect and distribute MLS listing information to 3rd party sites creating yet another middle man. My point remains the same, agents no longer need a 3rd party to syndicate their listings. There are over 1 million real estate agents in the United States and a great many of them have websites that display accurate, up to date MLS listing information utilizing IDX feeds available to Realtors.

If NAR wanted to get involved, one would think our own national association would want to create a single centralized MLS service that ALL home buyers and sellers would use to search for ALL properties listed by Realtors in the United States. I would expect NAR would want to identify, celebrate and lift up all of its contributing members. I would not expect my own national association to prostitute the information as planned.

A quick word about Diverse Solutions and Zillow.

For the Denver MetroList agents who are upset by their local MLS ending its affiliation with Diverse Solutions because of the recent sale to Zillow, I understand your frustration. I too, have spent an inordinate amount of time creating sections of my websites centered around MLS information. It takes days to create all of those links and to get the data displaying exactly the way you want. However, with today’s announcement that Zillow has hired the renowned ARMLS (Arizona Regional MLS) CEO Bob Bemis to become the new VP of Partner Relations, Zillow’s path is revealed. Speculation is no longer needed, Zillow wants the complete MLS feed. In my humble opinion, Zillow having access to the complete MLS feed is like the Iranians obtaining intercontinental missiles armed with nuclear warheads. Nothing good can come of it.

In conclusion, I believe real estate agents are entering a bold new era in which they realize the true worth of the services they perform. Agents who value their effort need to understand their work product is being treated inappropriately. Now is the time to speak up for the integrity of your profession and take note of this movement. For those who value their clients and wish to give them the highest level of service, you must educate yourselves on these syndication and aggregation issues.

By the way, I am also slightly offended by the notion that home buyers and sellers will not be able to find listing information if it is not on Zillow, Trulia or Realtor.com. Granted, these venture capital backed companies have outspent real estate brokers on search engine optimization, but their work product is inferior on accuracy, timeliness and boarders upon dishonest when it comes to the source of the listing data.

Grant Hammond is a 10 year veteran of the real estate industry who promotes professionalism with an emphasize on client service and work product.

Sales Update for the 5th & Main Condos Nashville

Outside View of Fifth & MainIt’s official, the 5th & Main condos are over the hump. If you had any reservations about this project not selling well or falling into distress again, fear not. In fact, the only fear you should have is missing out on the best condo deals in Nashville. The Marketing Directors have sold 88 of 129 condos, have 1 pending leaving only 40 available. Of the 40 available, only 3 two bedroom floor plans remain. If it’s the panoramic view of downtown you desire, only 3 one bedroom condos remain ranging in price from $142,900 to $223,900.

Having regained FHA project approval on January 19th, 2012, condo owners are well positioned to earn a handsome return on their investment. Once ACG Equities sells their last unit, meaningful appreciation should begin in earnest and peak in 4-6 years.

Price Increases in 5th & Main

The Marketing Directors have been strategically raising prices ever since the auction last Fall. Recently, the 2 bedroom condos received a $5,000 across the board increase and the 1 bedrooms were assigned a $3,000 increase. This is not the first increase, nor will it be the last. Heading into the hottest time of year for sales, I fully expect price increases to become more frequent and aggressive.

MDHA Affordable Condos in 5th & Main

5th & Main does have 17 condos that participate in the MDHA affordable condo program. If you are single and earn less than $37,000 annually, you may qualify to purchase a condo priced between $115,900 and $122,900. Unlike many other developments in Nashville, many of the affordable program condos have the best views in the building. As you would guess, the best views are limited so I would make my reservation quickly.

HOA Fees and Commercial Space

The 5th & Main condos have a $0.27 per foot monthly HOA fee, the second lowest in Nashville (The Rhythm has a $0.25/ft fee). To keep this in perspective, the Icon and Terrazzo have a $0.35 fee, the Encore has a $0.38 fee and the Adelicia is over $0.40 per foot. As you know, the Germantown Café East has been open for years (previously named Allium) in the building and a second restaurant called Myridia will open next month. Myridia is a Asian fusion lounge style restaurant.

I have assisted nearly a dozen clients locate and negotiate the best deals in this project. Put my unmatched research and expertise to work for you!

Grant Hammond, Broker, ABR, SFR
5andM@granthammond.com
Call or text: 615-945-7123

See all condos listed for sale in 5th and Main

5th and Main Condos Nashville

Navigate back to my Nashville real estate home page to see additional research I have posted.

Terrazzo Condos in Nashville 2011 Sales Review

Terrazzo Condos PoolIt has been just over 3 years since the Terrazzo first opened its doors and with the conclusion of 2011, the project is virtually sold out. All that remains are 3 penthouses priced between $950,000 and $1.1 million and 1 two bedroom flat priced at $535,000. More good news is that the average sales price per foot posted a significant 7.76% increase in price jumping from $238.72 in 2010 to $257.25 in 2011. Yet another positive sign for the building is that 3 condo sales in 2011 were resales compared with just 1 resale in all previous years. There are currently 4 resale condos on the market, with one presently under contract for significantly more than what the original resale buyer paid. You heard that correctly, #1207 will be on its third owner in as many years with each successive purchaser paying more than the last.

Looking to the future, I believe 2012 will bring continued price gains in the Terrazzo. I am conservatively predicting a 4.75% increase, but I believe that with sustained economic recovery and a lack of luxury high-rise inventory in Nashville, that price increase may be closer to 10%. I have been involved in dozens of sales in the Terrazzo and look forward to another great year in 2012.

As Nashville’s most successful condo broker, having been involved with more than 250 sales while never representing a developer, let me put my unmatched resources to work for you. As your representative, I know how to uniquely present your home to the market, maximizing exposure, sculpting the message and avoiding the pitfalls that besiege lesser qualified agents. Should you or someone you know be in the market for a purchase, allow me to share all of the inside minutiae associated with each high-rise so you can make the most informed decision. As a personal owner of multiple condos in multiple buildings, I have a keen perspective that uniquely qualifies me to represent your best interests.

Direct Line: 615-945-7123
Email: Terrazzo@GrantHammond.com

View current inventory listed in the Terrazzo Condos

Terrazzo Condos Sold in 2011

Terrazzo Condo Sales for 2011

(note: the blue highlighted transactions are resales)

Navigate back to my Nashville real estate home page to see additional research I have posted this year.

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