The property in Manhattan was priced at $13.9 million early last year and then reduced to $9.95 million because it persisted in languishing on the market. It is a luxe (of course!) loft on the 17th floor of 15 Madison Square North at the edge of Madison Square Park recently sold for much more than the lower price, reports the Observer.
The freshly renovated 5,000-sf unit has 14-foot ceilings and all the usual extravagant accoutrements.
The Corcoran Sunshine Group, which marketed the property said the price cut prompted a bidding war:
“Listed early in 2009 at $13.5 million, the price was later reduced in order to draw a larger audience of interested buyers. In this case, our reduced price generated significant interest and multiple bidders for this wonderful home, which in the end drove the price back up. As is always true in an efficient market, the market ultimately sets the price.”
Brokers tend to be of three minds when pricing a property to the extent that they can predict its true value: Above, at or below that value. In a buyers’ market, many brokers prefer an asking price above the perceived value to leave room for negotiating down. Either way, many sellers, who have the last word, ignore the advice for which they pay dearly.
Naturally, circumstances vary (the chief one being how quickly the owner wants to sell), but I don’t favor listing a place above what economic and market conditions suggest it will bring.
The point is to expose a listing to as many likely buyers in as short a time as possible. And the way to do that is to tempt them with at least a fair price, if not a bargain.
(To digress, Noah Rosenblatt the other day had a post in his blog, UrbanDigs.com, motivating me to comment that the conventional wisdom is correct: The first offer frequently is the best one.)
Cutting the price worked beautifully for the loft. Hedge funder Adnan Desai and his wife Erica engaged in the resulting bidding war with gusto. They bought the unit for $12 million.
Such is a lesson of how to get the best price that many sellers would do well to emulate.
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022