The Seven Percent Solution

Photo: James Leynse/Corbis

Jennifer Pentland-Silbergeld and her husband, Jake Silbergeld, were moving to Los Angeles and needed to sell their one-bedroom in Morningside Heights. They’d tried marketing it on their own but got nowhere. Then they hired a broker who listed it at $659,000; still no takers. They fired him and interviewed replacements, most of whom recommended dropping the price. Except Gordon Sokich of Fenwick Keats, who won them over with a so-crazy-it-just-might-work idea: Raise the asking price to $679,000, and the broker’s fee from the standard 6 percent to 7. Within days, Sokich (pictured) sold the place at full price.

Such a scheme on its face seems counterintuitive. But in this real-estate-mad moment, when brokers compete ferociously for commissions, it makes sense. A bigger payday will coax brokers to show an apartment more often and push it harder. (The higher asking price covers the difference in cost to the sellers.) To that end, Sokich e-mailed every broker he knows with the listing, and says that he received tons of calls asking if he was for real.

Though it’s unusual, such a move is not unheard-of. “If anything, we’re negotiating our commission,” says Bellmarc’s Neil Binder, adding that some developers have dangled incentives like free Porsches, mostly for overpriced properties. But the property has to fit the client’s needs, notes Jeff Silverstein of Dwelling Quest. “I’m not going to show something just because I’ll get more,” he says.

Will this work on a regular basis? Maybe: Sokich, for his part, says he’s done it four times, all successful. According to a report by real-estate firm Brown Harris Stevens, the average Manhattan purchase now costs $1.277 million; that extra 1 percent would bring in $12,770, hardly pocket change. (At press time, rumor had it that another broker is offering a townhouse with an outlandish asking price and a 9 percent commission.) “Most brokers are lucky to do three or four deals a year, and they take their clients where they can get paid a good commission,” says Sokich.

After paying the broker’s fee, Silbergeld and Pentland- Silbergeld walked off with $631,470; had they gone with the 6-percenter who recommended they sell for $619,000, they would’ve netted $581,860. “It does sting a little that we had to part with that much more money, but he was actually worth it,” says Silbergeld. “We call him Flash Gordon.”

The Numb3rs Add Up
He became famous for playing a career cabbie without much in the way of prospects, but Judd Hirsch has done quite a bit better for himself than the average hack. Sources say the award-winning actor, best known for his work on Taxi and on Broadway in I’m Not Rappaport, and now starring in the mathematics-themed CBS crime drama Numb3rs, has accepted an offer for his four-bedroom on the Upper East Side. The sunny apartment, in a white-glove postwar building that’s one of the few built on Park Avenue expressly as a co-op, was listed at $4.49 million, and has six bathrooms, two maids’ rooms, and an enormous kitchen. No doubt Hirsch is hoping this buyer will pass the building’s notably particular board, which is said to have eighty-sixed a previous applicant. (They don’t have to worry about a loan coming through: It’s a cash-only building.) Hirsch’s broker, Dianne Van Laer of Bellmarc Realty, refused to comment on the details, saying only that she and Hirsch have “found a wonderful couple for the apartment.”

Courtesy of Bellmarc

Triple Assessment
515 Park Avenue, Apartment 5A
Three-bedroom, 31⁄2-bath, 2,500-square-foot condo.
Asking price:
$6 million.
Charges and Taxes: $5,906.
Broker: Jamie Mitchell, Bellmarc.

Having brushed off a fungus fracas last year—one resident complained of mold and sued the developers, though the building was later declared clean—this 2000 building, a rarity on prewar-heavy Park Avenue, is once again a hot commodity. No wonder our panelists expect the apartment to draw a high price, even if it may have some issues.

Harriet Kaufman, Warburg Realty: Kaufman bemoans the lack of a grand entry, which, “in this neighborhood, is almost expected.” She adds that the layout’s a little choppy, but the big windows over Park Avenue bring in tons of light, “and the room sizes are nice.”
Her assessment: $5.975 million.

Christopher Mathieson, JC DeNiro & Associates: Mathieson finds the corner apartment’s double exposures a major asset, as are the high-end finishes, from the floors to the countertops. “They feel substantial,” he says. “You’d be willing to pay.”
His assessment: $5.9 million.

Amy Tucker Meltzer, Sloane Square NYC: “515 Park is a premier address” and some units fetch $3,000 per square foot, says Tucker Meltzer. This one won’t, she predicts, because of the flawed layout, with a third bedroom just off the living room. Still, “the kitchen’s pretty special,” she concedes.
Her assessment: $6 million.

The Seven Percent Solution