Bid on the City auction too little too late?

Bid on the City auction

Leaning over a desk and blocking a small section at the left bottom of the big screen is the personable auctioneer and, left foreground, my hat.

A technologically impressive outfit called Bid on the City ventured into the Big Apple last spring, I think, with the auction by mouse, TV remote, telephone and live audience of two properties.  Yesterday, I decided it was high time to pay a visit.

My reaction to the sale of 10 Manhattan townhouses and apartments that went on the block was decidedly mixed. 

I guess because Bid on the City (to which I’ll refer as BOC) claims Web site registrants in 100 countries, the auctioneer proclaimed at the outset that people in 100 countries were taking part.

I have my doubts.  One reason is that only three of us were in the small, but pleasant BOC facility seated in front of touch-screen laptops on Fifth Avenue above Madison Square Park.  The second reason is that bidding on the first two properties – I couldn’t stand to stay any longer – was lackluster at best.

The company uses what I have to term “gimmicks” – clever ones, I’ll acknowledge – in its mostly unsuccessful attempts to attract participants and push up bids.  For example, the starting bids on nine of the properties were shown at $1 – an amount instantly met in each case.

Then there’s a countdown clock not unlike the one featured on the home page of its site for when bidding would be closed.  However, BOC stops and resets the clock indiscriminately.  Well, not indiscriminately; it does so every time the bidding goes nowhere–which it does frequently.  Thus, the clock builds anxiety but possesses zero meaning.

I suppose that technique is not so different from what auctioneers do all the time, deciding whether to gavel an item down, spotting protoplasmic bidders to raise the selling price and otherwise prolonging what in BOC’s case felt like an ordeal.  One difference is that Bid on the City’s way of doing things is somewhat transparent, except that there’s no telling when the clock will be stopped or a couple of  extra minutes will be added.

Also similar to auctions, minimum increments declined as interest lagged.

You may get what you see. Click to expand.

Consider a townhouse at 9 W. 126th St. near Marcus Garvey Park in Harlem.  It was the first item.  First listed last March for $1.7 million and then reduced to $1.65 million, the brownstone was taken off the market in September.

Although I recorded every bid, in $100,000 increments, I won’t bore you with the tiresome clockwork manipulations and the bidding changes.  But I will relate that, at $400,000 (and $1) with a minute to go, five minutes were added.  The phrase “switch and bait” leaped to my mind as 30 seconds and 10 seconds were tacked on as well.

In the end, the bidding closed at $400,000 (and $1.).

Aha! What a bargain!

Uh, uh.

As the auctioneer carefully explained to the ceiling-mounted Web cam at the beginning and repeated later, “Final bids are subject to the owner’s approval.”  Sellers have 24 hours to decide. (I didn’t quite catch whatever he meant about a $5,000 minimum fee, but the Web site states that there is a 3 percent buyer’s premium.)

So it went with the second item, a one-bedroom condo in Chelsea on 23rd Street between Ninth and Tenth Avenues.

Painfully, tediously, endlessly (so it seemed), bidding progressed in $75,000, then $50,000, then $45,000, then $25,000 and finally $10,000 increments as the clock started, stopped and started all over again with the auctioneer haranguing, cajoling and entreating his predominantly unseen bidders.

That bidding closed at $570,000, leaving the condo as possibly, possibly, the only one of two auctioned property that ultimately will go to contract – unless the owners are insane or teetering at the edge of bankruptcy.  The other residences achieved the following results, which have been posted on the site (each plus that silly $1):

  • 150 W. 51st St., listed at $595,000 and bid up to $375,000
  • 147 W. 142nd St., $445,000 and $50,000
  • 147 W. 142nd St., (another unit), $425,000 and $100,000
  • 516 W.77th St., $954,000 and $525,000
  • 175 E. 102nd St., $225,000 and $110,000
  • 175 E. 102nd St., $225,000 and $70,000
  • 155 Lexington Ave., $4.69 million and $1.65 million
  • 225 Fifth Avenue, $1.825 million and $1.35 million, which started at $1.15 million even

The low bids at this auction could not have been more reminiscent of the dismal auction of 54 condos in Riverdale’s Solaria on Nov. 22.

Hearing the auctioneer extol the virtues of the properties, the taxes, the dimensions and other pertinent details dimly rang a bell in my brain. I wondered whether he was a real estate broker licensed by the state since even hosts at an open house are permitted to provide very little information if they are not licensed.

So I asked him in a pause between items.  He gamely replied that he was just the auctioneer and the company, the broker.  That bothered me, so I hauled out a stepladder and pulled down the book I had studied for my license as an associate broker.

Maybe the book is wrong, maybe the law has changed, maybe my suspicious interpretation is erroneous or maybe it is enough for the company or its employees to be licensed, but this is what I read as No. 7 in the list of 11 “Duties That Require Licensure”:

“7. Selling or purchasing real estate at an auction.”

By the time I left the BOC facility, the 16 seats were filled, and I was delighted to return to the wintry weather.

I also was delighted that I didn’t retain the impulsiveness that caused me to purchase with a business partner I had met only that day a condo in Vail many years ago when I was assigned by Money magazine to write about the auction of units in a failed development.

We failed to cover our costs with rentals despite our hopes.  My partner failed to meet her financial obligations to that business. No, I never have tried downhill skiing.  And yes, I lost my shirt.

Next auction: March 16.  It’s caveat emptor all over again.

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Malcolm Carter
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022

M: 347-886-0248
F: 347-438-3201

Malcolm@ServiceYouCanTrust.com
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