Coffey Modica’s Maria D’Avanzo shares her expertise in this recent Newsweek article on changes in homebuyer fee structures.

Published Mar 22, 2024  | Updated Mar 23, 2024
By Omar Mohammed

The changes coming to the real estate market over how agents are compensated could see homebuyers facing extra costs when purchasing property, a housing economist said.

Last week, the National Association of Realtors (NAR) settled claims that alleged the organization had been part of a structure that lacked transparency in the way real estate commissions were being charged. This contributed to high costs of home transactions, particularly for sellers, critics said.

NAR denied any wrongdoing but agreed to pay more than $400 million over the next four years to end the claims. They also moved to change the rules over how sellers and buyers of homes pay commissions that experts say could transform the sector.

One such change that could come into effect is sellers are now forbidden from deciding what fees real estate agents are set to be paid, which typically would be at 6 percent of the home sale price.

Currently, sellers would cover that cost, but the new system could mean that they may no longer do so and allow some flexibility in the way buyers and sellers cover the fees.

But Danielle Hale, chief economist at realtor.com, suggested that buyers may be disadvantaged in the new system as now they might have to pay their agents out of their own pocket when in the past sellers had been the ones who incurred the cost.

“These changes could put more pressure on buyers if they are responsible for compensating their own agents directly, at a time when home prices are high and elevated mortgage rates make borrowing expensive,” she said in a statement shared with Newsweek.

“Some buyers might have to lower their target price in their home search to account for this newly added expense, but even if home prices were to fall in the future, buyers’ costs are likely to rise by a similar amount if they are having to compensate agents directly.”

Hale acknowledged that it may be too early to tell how exactly the rules changes on commissions will come shape the housing market.

“What consumers decide to do will ultimately determine how it will play out, and there are countless possible scenarios,” she said. “Home sellers could still choose to offer to pay buyers’ agents, or another option might be for buyers to raise the offer price on a home and then ask for funds back in a concession to cover their agent’s cost. Or the buyer and seller might each pay their own agent.”

Agents can be helpful to buyers, Hale pointed out.

“Buyers agents play an important role in helping home shoppers find the right home, negotiate the terms of the sale, and settle on a price, and buyers will likely be reluctant to navigate the financial decision of a lifetime without their professional expertise and support,” she said. “Ultimately, if these changes bring about greater consumer transparency, that’s a good thing.”

But some real estate experts told Newsweek this week that the shift, which could take effect this summer, may force agents to work harder at proving their value to customers. Buyers may become more selective in terms of what they want to get from their agents, some say.

“Maybe there’s like an à la carte menu, right? If you want me to just bring you to the place to the house, to walk around, let you in, maybe that’s one price,” real estate lawyer Maria D’Avanzo, a partner at Coffey Modica, told Newsweek this week. “If I am also going to be sourcing your engineer or your inspector to do the inspection, that’s another price.”

This may in the long run help to save costs on transactions, she said.

“Under that formula, I think a buyer is going to end up paying less than they would if they paid like 3 percent of the purchase price,” she said.

The ultimate consequences of the NAR rule changes will take time to be fully understood, according to Hale.

“There’s still a lot to be determined with the settlement and what it means for the industry, agents, buyers and sellers, and the market,” Hale said.

Coffey Modica’s Paul Golden is one of the legal experts quoted in this Forbes article regarding Donald Trump’s troubles paying the penalty in his civil fraud trial.

Mar 21, 2024,  by John Hyatt, Forbes Staff 

THE QUEENS NATIVE WHO BUILT A REAL ESTATE EMPIRE IN MANHATTAN IS ON THE VERGE OF POSSIBLY FORFEITING HIS FAMOUS NEW YORK PROPERTIES TO STATE AUTHORITIES—IN ADDITION TO ALL HIS SPARE CASH. HERE’S WHAT COULD HAPPEN NEXT. 

On Monday, Donald Trump’s lawyers revealed in a legal filing that Trump had failed to secure the $464 million appeals bond he needs to avoid paying the half-billion-dollar penalty as he appeals the New York civil fraud judgment against him. Securing the bond was a “practical impossibility,” they wrote, adding that about 30 different bond companies turned down the former commander-in-chief’s request, in part because very few will consider “a bond of anything approaching that magnitude” and the rest will not accept “hard assets such as real estate as collateral.” Trump is now asking the five-judge appeals court panel to pause enforcement of the civil judgment or to lower the bond amount to $100 million while the appeals court hears his case. 

Trump is running out of time. New York Attorney General Letitia James has said that her office plans to collect from him on Monday, March 25. Unless Trump is able to obtain an appeals bond before then, New York prosecutors and law enforcement could initiate a wide-ranging action to freeze and then seize Trump’s assets. Forbes estimates that Trump has about $400 million of cash and liquid securities, but some of that money is already encumbered. Earlier this month, Trump obtained a $91.6 million appeals bond for the second New York civil judgment against him (in which he was found liable for defaming and sexually assaulting E. Jean Carroll) by posting a Schwab brokerage account as collateral, MSNBC reported. Those same funds cannot be used to collateralize a second bond. Trump’s attorneys say their client needs collateral of $557 million to post the $464 million bond. 

“I think he is in trouble,” says Kevin O’Brien, a white collar trial lawyer in New York and a former assistant U.S. attorney to the Department of Justice. “He doesn’t have the cash to pay for this. That’s why he’s in the pickle he’s in.” Mark Zauderer, a trial and appellate lawyer in New York, says that if Trump fails to get his bond or get a favorable ruling from the appellate judges, then the Attorney General’s office will move swiftly to take control of Trump’s bank and brokerage accounts, as well as his various buildings and real estate holding companies. “You do everything. You [go after] everything at once,” Zauderer explains. “Some [assets] will take longer than others.” 

Spectators can expect a long and drawn-out series of legal filings and appeals, over a period of weeks, months and possibly even years. The Attorney General is “not going to take a stake and drive a sign through the front yard that says, ‘This building has been seized,’” explains O’Brien. “It’s a legal process. It’s not like she’s going to be selling these properties next week.” 

To initiate the process of seizing property, the New York Attorney General’s Office can put liens on Trump’s assets and then give execution orders to county sheriff’s offices to sell any Trump-owned properties in their counties through an auction. Trump has stakes in 13 New York properties that are collectively worth about $700 million after debt; ten of those assets are in New York County (which encompasses Manhattan), two properties are in Westchester County (a golf course and a mansion) and one is in Dutchess County (another golf course). James could also pursue Trump’s properties in other states by invoking the Uniform Enforcement of Foreign Judgements Act, though that could create more legal hurdles and raise some jurisdictional issues, lawyers told Forbes. 

Under liquidation proceedings, Trump’s other creditors – like Ladder Capital, Axos Bank and Bryn Mawr Trust Company, which all lent Trump money against his New York buildings – will also demand what they’re owed, potentially complicating the process. Then there’s tax authorities owed money by Trump who will want their share. “Other people have been standing in line,” says O’Brien. “That might be a major fight over who has first dibs.” 

For these reasons, James may start by liquidating buildings that are unencumbered—or even wait to sell some or all of the properties. “One theory is that the Attorney General would not actually sell any of Trump’s real property until the appellate process was complete,” says Paul Golden, a New York lawyer specializing in real estate and commercial litigation. “There would likely be complicated litigation if the attorney general sells real property at a public auction now for well under the market value, only to later discover that the end result was that Trump was not liable after all.” 

There are other mechanisms for the Attorney General’s office to squeeze money out of Trump’s buildings—like taking payments from tenants that lease space from Trump. “Ultimately the Attorney General could not only look for money that Trump has in the bank, but can stop tenants that pay big amounts of rent to Trump from paying him,” says Zauderer. Extracting cash flow from Trump’s properties would further imperil Trump’s ability to service his massive debt pile: Over the next five years, he has $780 million in mortgages coming due. 

Theoretically, Trump could avoid the humiliation of surrendering assets to New York law enforcement by mortgaging or even selling off some of his assets to post the bond. His largest assets in New York include a 30% interest in the 1290 Avenue of the Americas building (publicly traded Vornado owns the rest); a collection of condo units, commercial spaces and storage units he rents out in Trump Park Ave; and two ground leaseholds on 6 East 57th Street, a retail building whose anchor tenant is the jeweler Tiffany’s. Trump also owns 100% of the Trump Tower building (another Midtown tower), which leases space to retail brands like Gucci. And of course, Trump has the penthouse at the top of Trump Tower, which he infamously claimed was three times bigger than it actually is. 

But of course, he is appealing the judgment against him, which means he’s trying to avoid selling any of his properties to personally post his bond. As Trump explained in a rant on Truth Social on Tuesday. “I would be forced to mortgage or sell Great Assets, perhaps at Fire Sale prices, and if and when I win the Appeal, they would be gone.” He added: “I shouldn’t have to put up any money… until the end of the appeal.” 

It makes sense for Trump to wait: The panel of appellate judges could decide to lower the bond amount Trump owes, or even pause the enforcement of the civil penalty while Trump appeals the judgment against him. A final decision on his appeal could take up to a year, Zauderer says. 

“It puts a shadow over his ability to do business, period,” says O’Brien. “Who’s going to trust a guy like this?” 

Coffey Modica’s Paul Golden provides his insights into Donald Trump’s court cases in Newsweek.

Published Mar 17, 2024| By Sean O’Driscoll, Senior Crime and Courts Reporter

Donald Trump is expected to seek further delays to his Stormy Daniels hush money trial when more documents are released to his lawyers next week.

Manhattan District Attorney Alvin Bragg has already agreed to delay the trial by a month after federal prosecutors disclosed more than 100,000 pages of documents to Trump’s lawyers this month.
Trump’s Daniels trial was set to begin March 25. The former president is accused of making hush-money payments to adult film star Stephanie Clifford, better known by the stage name Stormy Daniels, during his 2016 presidential campaign.

Paul Golden, a partner at New York law firm Coffey Modica, told Newsweek that additional documents will be released next week, but the exact quantity is still not known.

All of the documents are coming from the U.S Attorney’s Office, the prosecution section of the Department of Justice (DOJ), and relate to Trump’s former lawyer, Michael Cohen, who has agreed to testify against Trump in the Stormy Daniels case.

“The U.S. Attorney’s Office has indicated it will produce yet another set of documents sometime during the week of March 18th,” Golden said.

“At this point it is unknown how many pages of records there will be in that set. It is also unknown how many of these new pages are directly relevant to the underlying criminal case.”
Newsweek sought email comment from Trump’s attorney on Sunday.

Trump is facing up to 34 felony charges regarding the alleged falsification of business records and concealing hush-money payments to Daniels during his first presidential campaign. Trump, the presumptive Republican candidate in the 2024 presidential election, has pleaded not guilty to all charges.

Golden noted that on March 4, approximately 73,000 pages of records from the U.S. Attorney’s Office were provided to Trump as a response to a subpoena.

“Although this may seem to be a large of amount of new material Trump’s attorneys would need to review to be ready for trial, the DA’s position was that of these pages, only about 172 pages of witness statements were relevant to the underlying case, and that Trump’s attorneys would have more than enough time to review them before the trial.”

In addition to these 73,000 pages of records, the U.S. Attorney’s Office on Monday, March 11, produced another set of records—around 31,000 pages.

Bragg indicated that because of the “distinctive circumstances,” his office would consent to an adjournment of “up to 30 days.”

“The judge now has several choices, including adjourning the trial date by 30 days, as the DA requests, or by 90 days, as Trump is seeking,” Golden said.

However, Trump’s lawyers will almost certainly seek a longer adjournment once the next tranche of documents are released next week.
Bragg has accused Trump’s attorneys of stalling their last request for DOJ documents so that the Daniels trial will be delayed.

However, Bragg’s office conceded on Thursday that it is willing to delay the start of the Trump trial by 30 days so that the former president’s lawyers can read over newly disclosed documents from the U.S. Attorney’s Office.
“We note that the timing of the current production of additional materials from the USAO (U.S Attorney’s Office) is a function of [the] defendant’s own delay,” the DA’s office stated in a court filing.

“Defendant waited until January 18, 2024, to subpoena additional materials from the USAO and then consented to repeated extensions of the deadline for the USAO’s determination.”

As Trump’s delay request is not opposed by Bragg’s office, it will likely be granted by the judge in the Daniels case, Juan Merchan. However, he could agree to delay the case by 90 days, as Trump has requested.
DOJ Special Counsel Jack Smith has repeatedly accused Trump of trying to delay his criminal trials until after the presidential election. If elected president, Trump can apply to the U.S. Supreme Court to have all his criminal trials delayed until after he leaves office.

The U.S. Attorney’s Office records released so far are all related to federal prosecutors’ 2018 investigations of the alleged hush-money payments at the center of Trump’s case, which eventually brought charges against the ex-president’s former attorney and fixer, Cohen.

Trump’s lawyers are hoping to use the records to discredit Cohen’s upcoming testimony in the Daniels trial.

We’re proud to be chosen as one of the 🥇 Best Companies to Work for in New York

Rochester Business Journal Staff

Rochester Business Journal, Best Companies Group and New York State Society for Human Resource Management have announced the winners of the 2024 Best Companies to Work for in New York state awards.

Best Companies to Work for in New York is a research-driven program that examines a company’s practices, programs, and benefits and also surveys its employees for their perspectives. Best Companies Group managed the overall registration and survey process and also analyzed the data and used their expertise to determine the final rankings.

The best places of employment in New York are identified in three categories: small companies (15-99 employees), medium companies (100-249 employees), and large companies (250 or more employees). To be considered, companies must have at least 15 full-time or part-time employees working in New York; be a for-profit or not-for-profit business or government entity; be a publicly or privately held business; have a facility in the State of New York; and be in business a minimum of one year.

There were two parts used to determine the rankings. The first consisted of evaluating each nominated company’s workplace policies, practices and demographics, worth approximately 25 percent of the total evaluation. The second part consisted of an employee survey to measure the employee experience, which consisted of 75 percent of the total. The combined scores determined the top companies and the final rankings.

A listing of winners is below in alphabetical order. The Tnal rankings will be announced at the April 18 awards ceremony.

“The 2024 Best Companies to Work for in New York foster a positive environment for employees to thrive. They are champions of business because they look out for the well-being of their team members in addition to what’s best for the company’s bottom line,” said Suzanne Fischer-Huettner, managing director, BridgeTower Media/Rochester Business Journal. “The New York State Council of the Society for Human Resource Management and the Best Companies Group join us at the Rochester Business Journal in congratulating this year’s impressive winners.”

The winners will be honored April 18 at a celebration at the Hilton Albany, 40 Lodge St. in Albany. Registration and networking begin at 5:30 p.m. followed by dinner and the awards ceremony at 6:30 p.m.

The 2024 Best Companies to Work for in NY will be profiled in the awards publication, which will be distributed to the more than 10,000 members of the New York State Council of the Society for Human Resource Management.

Maria D’Avanzo weighs in on house-flipping scams.

A surge in home prices and a rise in high-profile real estate influencers are fueling the promise of easy returns.

Published 01/11/24
Sasha Jones

During the past decade, real estate TV shows documenting luxurious agents and developers have exploded in popularity, from “Property Brothers” to “Million Dollar Listing” and “Selling Sunset” — along with the numerous spinoffs. The home-buying craze, heightened further during the pandemic, brought new attention to the seemingly easy opportunities in residential real estate.

At the same time, however, scams began to proliferate targeting the average investor looking for quick profits, particularly within one sector: house flipping.

High-pressure events and ads are coercing participants to quickly spend thousands to learn the secret sauce behind buying and swiftly rehabbing a house to sell quickly. The events typically are endorsed by a trusted celebrity who has gotten rich quick by doing the same.

But many of these pitches to would-be investors often fail to fulfill any of the promises for returns. Recently, those schemes have caught the eye of the Federal Trade Commission and lawsuits — resulting in a crackdown.

“The complaints that get filed are just the tip of the iceberg, because that’s the nature of the enforcement capacity,” said Sarah Bolling Mancini, co-director of advocacy at the National Consumer Law Center “Any increase in enforcement activity points towards an overall increase in the problem.”

In June, home prices were 44% higher than before the pandemic, according to Redfin data. Looking to capitalize on a surge in sales, more people pursued real estate.

More than 400,000 single-family homes and condos were flipped in 2022, up 14% from 2021 and 58% from 2020 — the largest number of homes since at least 2005, according to real estate data firm ATTOM. House flipping is generally defined as when an investor buys a home or distressed property at a low price, rehabilitates it and then resells for a profit over the course of several months to a year.

To illustrate the mad rush to flip, there’s such an abundance of homeowners flipping now that it’s begun to dilute profits. For example, gross profit margins on flips in 2022 sank to the lowest level since 2008. The typical gross return on investment dipped to 27%, compared with 42% in 2020.

Meanwhile, the FTC has been busy trying to root out scammers.

In May, a $16.7 million judgment against Response Marketing, and the celebrities involved with the company’s training program, led to the ban of six different training programs. The programs took over $400 million from participants, according to a complaint filed in Utah federal court.

Response Marketing would advertise a coaching program that cost up to $30,000. Through the company, students were told that they would have access to a network of buyers who would purchase potential properties for them to flip.

Aspiring house flippers were lured to free events through infomercials and social media advertisements, according to the FTC.

The vast majority of consumers did not become successful in real estate and did not recoup the money that they spent on the programs. The group, and its celebrity endorsers were also involved in burying online customer complaints that reported the scam, according to the FTC.

As part of the case, Scott Yancey, the star of the home-flipping show “Flipping Vegas” on A&E, and Dean Graziosi, the author of “Millionaire Success Habits,” were fined, paying $450,000 and $1.25 million, respectively — the FTC’s first monetary settlements with celebrity endorsers.
Yancey and Graziosi did not respond to The Messenger’s request for comment — nor did the FTC.

“People are more comfortable with residential real estate. It doesn’t seem as complicated as stocks or ETFs,” said Maria D’Avanzo, a partner with law firm Coffey Modica who has worked in the real estate industry for 20 years. “This is an area where people are really vulnerable.”

On April 11, 2018, a group of wannabe real estate entrepreneurs and one wired Federal Trade Commission agent crowded into the Sheraton Pentagon City hotel in Arlington, Virginia, for a free coaching session on home-flipping. It’s one of many events hosted by the now-banned company Zurixx, from which participants have yet to recover tens of thousands of dollars.

On stage, a Zurixx representative boasted about his rags-to-riches story — going from bankrupt to a millionaire — thanks to home-flipping. He shared photos of him with rapper Pitbull and a video of Tarek El Moussa and then-wife Christina Hall, co-stars of HGTV’s “Flip or Flop,” endorsing the program. He told the audience that the TV personalities’  lending partners would “fund all of your purchases, all of your renovation, regardless of your credit or your background,” according to a transcript of the event.

El Moussa did not respond to The Messenger’s request for comment.

As long as participants paid a discounted rate for continued workshops, they were told they could just sit back and watch the money roll in. Except that wasn’t true.

Zurixx settled with the FTC in 2022 for $12 million, but unanswered complaints with the Better Business Bureau have continued to roll in. One, filed in 2023, documents an instance where a participant paid the group $16,500. Another, filed in 2022, states they paid $29,000 for a year of unlimited coaching — for which they have yet to receive a refund for.

Older Targets

Marcelo Diaz-Cortes, an attorney who specializes in commercial litigation in state and federal courts, compared the rise in such real estate scams to crypto schemes that have emerged in recent years. Both are industries that have become perceived as increasingly lucrative and both use similar advertising techniques with celebrity ties.

“The older generation sees [crypto] with skepticism, because it’s hard to explain after having transacted in tangible things for all their lives,” Diaz-Cortes said. With home flipping, “the audience that may be more susceptible is the older crowd who believes in real estate because for the past 40, 50 years, it’s been a solid investment.”

“There are lots of iterations of these kinds of services that will continue to pop up,” Diaz-Cortes added.

However, it does not take a TV star to entice consumers. In October, New Jersey social media influencer Cesar Humberto Pina, known as “Flipping NJ,” was charged with engaging in a multimillion-dollar Ponzi-like investment fraud scheme.

Pina allegedly partnered with a radio personality to conduct real estate seminars and other appearances, promising 20% to 45% returns within five months on investments into his home-flipping projects. While he did buy properties, most investors did not see any returns, according to a complaint filed in New Jersey federal court. Instead, Pina would continue to grow his social media following and solicit more people, using funds for renovations for personal spending and additional building purchases.

The case remains ongoing. Lawyers for Pina did not respond to requests for comment.

In June 2022, YouTuber Mikki Lynn Fox, known online as both Michaela Pink and Summer Black, was sentenced to five years in prison after pleading guilty to swindling eight investors out of over $136,000.

In the scheme, Fox, who posted lifestyle and dating videos, would use her platform to encourage investments into homes she was planning to renovate. Though she paid victims in bits overtime, she made excuses and eventually stopped responding.

“She was very charming. People would look her up online and say, ‘Oh, she is somebody.’ No, she just created that persona,” Sheila Hansel, who prosecuted the case in Harris County, Texas, said in a statement.

Read the full article on The Messenger.