Auction of 1BR UWS unit doesn’t help lender

Standing way up on the right are the auctioneer and lawyer.

It was all over in eight minutes, forty-two seconds, including a soporific reading of the Terms of Sale by auctioneer Stuart Medow.

Not only was the foreclosure auction on the courthouse steps at 60 Centre St. over in a flash yesterday, but it was a failure.

Represented by his attorney, Ronald Kahn, the lender to one Paul D. Hurley ended up with the apartment on which he had foreclosed.

Three hopeful individuals, apparently investors (who preferred to go nameless), stood mute as the auctioneer opened the bidding at $150,000.  The 550-sf co-op–Unit C at 107 W. 106th St. on the Upper West Side–had been listed for $375,000 in December 2008 and was recently reduced to $295,000.

I went to the auction for you, Dear Readers, and for me: I had never attended an auction on the courthouse steps, a very long tradition that occurs in most jurisdictions around the country.

Standing at the top of the steps were the auctioneer, holding a small sign indicating why he was there, and the lawyer.  Then came one bidder, who didn’t want to be photographed even from the back.  (I respected his wish for privacy but decided one eensy-weensy shot couldn’t be harmful, especially in a public place.)  Ultimately, two others straggled in.

Kahn wondered aloud how 20 persons could have expressed interest in the unit and only three of them showed up.

“Welcome to my world,” I offered, providing scant comfort.

The bidding was less than spirited, you might say. That's auctioneer Stuart Medow in the white shirt and my finger at the bottom left.

The auction began with the reading of the terms at 10:07 a.m., seven minutes late, as Medow intoned, “Good morning, gentlemen.”  Then, he asked whether there were any questions.  There were some, from one of two Davids who were bidding–or as the case may be, not bidding.

David seemed strangely unaware and understandably unhappy to learn that outstanding maintenance, other charges and closing costs could run him up to $20,000.  Until the auction ended at 10:16, he stood as silent as the others, who eyed him suspiciously.

Then David pumped Kahn for information while declining to offer any of his own, particularly how much he might be willing to pay for the property.  The others scooted away together, and it seemed they may have been in partnership.

The lawyer, who clearly was intent on starting a negotiation, disclosed to David in my hearing that Richard Schneider, who had developed the building, was the lender.  He asked me not to specify the amount that would make him whole, but trust that there is a gulf between it and the opening bid.

“Why didn’t you bid?” Kahn asked David.

“Too many unknown factors,” came the reply.

"David" speaking with Medow (left) and lawyer Ronald Kahn (center).

They agreed to talk and e-mail each other, each of them apparently eager to deal.  But the likelihood is small that they’ll come to agreement since David seemed fixed on a number below $150,000 and the lawyer, on a number far above it.

Once ownership is transferred to Schneider, negotiations with interested parties can begin in earnest.  If they don’t work out, the sale of the apartment will be given to a broker who already is involved with the building.

“Would you like to grab a bite?” Kahn asked Medow as I hurried off to view three multi-million-dollar lofts opened for brokers in SoHo.

Seeing how such things go was not a waste of time, but I’m in no hurry to repeat the experience.

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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
Web site

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