throwing a coop board interview can come with a high price

the Barbara Corcoran experience
There is a fascinating AP interview with Barbara Corcoran on-line yesterday, which The Real Deal excerpts (badly) this morning. TRD picks out some nuggets, which started me in a different direction this morning in thinking about a blog post (mostly, in the [lack of] ethics in intentionally failing a Manhattan coop board interview). The full interview is more interesting, especially on that point, than the TRD excerpts. I read The Barbara in the full AP version as really regretting “intentionally fail[ing]” that interview.

First, let me say that I have never met The Barbara, we never worked for the same firm at the same time, and I have signed no contracts limiting in any way what I can say about her. In the past, I have squelched any temptation to comment about her because I see her more as a consummate self-promoter than anything else these days; someone who does not need any ‘help’ from Manhattan Loft Guy to achieve her purposes in life, thankyouverymuch. In my personal view, she is almost necessarily publicly cynical, as any consummate self-promoter must be, though I need to give her props for one genius gesture that — self-promoting or not — had a veneer of public spirit to it: after September 11, she canceled the firm holiday party and instead gave each agent money ($250?) to go out to dinner, but only if the agents went downtown, to restaurants whose businesses had been devastated. Serious props. But I digress.

The TRD excerpts left me with the mis-impression that The Barbara was cynical about having failed that board interview on purpose, as if she were suggesting that as a handy tool for buyers with cold feet:

… the Corcoran Group founder failed her first-ever board interview. On purpose. Corcoran told the Associated Press that she fell in love with a $35,000 Greenwich Village one-bedroom in 1977 but later "chickened out" and threw the interview. She advises buyers today to simply dive in and "buy with your heart, not your head," because "you can’t sharp shoot the market and pinpoint when it might peak." Other tidbits of wisdom….

But I don’t read the full interview that way, at all. Instead of recommending that as a tool, I hear regret in this full sequence:

Q: How about the first time you bought a place. What was the most important lesson you learned?

A: I tried to buy in 1977 when prices were just beginning to go through the roof. I fell in love with this top story, one-bedroom apartment in Greenwich Village. The price was $35,000, and I had saved $4,000.

But I got scared and intentionally failed the co-op interview. I chickened out. I was just too frightened to make a commitment. They said they didn’t want me in the building and refused to return my ($3,500) deposit.

After that, the prices ran away from me. It took another eight long years to save enough money to buy my first New York City apartment.

That taught me an important lesson. The first home is the most important — it gets you into the game.

no oxymorons allowed: ethics in Manhattan real estate for another day
I could digress into a discussion of why it is wrong to behave badly in a board interview to get out of a coop purchase contract, but I will leave that for another day. I will skip to the downside of that strategy, a downside that The Barbara personally experienced: if you do it too baldly the seller will find out that you did it on purpose and hold on to your deposit as the remedy for your breach of contract.

In her case, look again at the numbers. You might feel that the $3,500 deposit is not a lot of money (even in 1977 terms), but that was nearly all of her savings of $4,000. She panicked, and she paid a huge price for it. It took her “another eight long years to save enough money to buy my first New York City apartment”, cost her that $3,500 in cash, and kept her out of “the game” for those 8 long years.

Funny thing is, in her telling, she had timed the market very well (“I tried to buy in 1977 when prices were just beginning to go through the roof”). When she panicked, she gave up that good fortune. She builds on that experience in the next section of the interview, in which she warns that “you can’t sharp shoot the market and pinpoint when it might peak[,] If you do that, life will always get in the way”.

I was prepared by the TRD excerpts to hear some cynical bragging about how smart The Barbara was in figuring out how to get out of a coop purchase contract. In truth, the full AP interview admits that this was a huge mistake for her.

Perhaps I have low standards (am too cynical myself??), but it feels like a good day when an expectation of cynicism is unmet.

© Sandy Mattingly 2011