BidOnTheCity.com aims to stimulate Manhattan real estate sales with a high-tech system for global online auctions that features a 30-day marketing timeline and a 30-minute bidding window.
Albert Feinstein and Vlad Sapozhnikov, executives for New York Business Group, a real estate brokerage firm, contracted with PropertyShark.com, a real estate data company, to build the bidding engine for the new company.
After two years in development, BidOnTheCity.com will host the first live auction on May 14 — the platform integrates in-person bidding at the company’s Manhattan office with bids placed online or by phone.
The company, which charges a 3 percent commission fee to both the buyer and seller, does not directly represent sellers or buyers in the transaction.
"Broker services are definitely not required for this particular transaction — that was the whole idea for BidOnTheCity," said Feinstein, who has worked in real estate for more than a decade.
Feinstein said he and Sapozhnikov conceptualized the bidding platform when it became clear the Manhattan market would slow down. The financial crisis and economic slowdown have put the brakes on the Manhattan real estate market — co-op and condo sales sank 47.6 percent year-over-year in the first quarter, according to a report prepared for Prudential Douglas Elliman Real Estate by real estate appraisal company Miller Samuel Inc (see Inman News).
The auction company can work with brokerage companies to list properties — Prudential Douglas Elliman has partnered with BidOnTheCity to sell a seven-bedroom, 10-bathroom home along 74th Street — the starting bid is $15 million and the home was previously listed for $35 million.
Feinstein said that BidOnTheCity will add a buyer’s premium to the final price of that home for its bidding services but is not charging a seller’s commission.
The company handles online advertising and marketing for properties prior to the auction, and the company can also arrange photos, virtual tours, comparative market analysis and property inspections.
Why only 30 minutes for the bidding process on each property?
"Thirty minutes creates a certain pressure on buyers to express how much they like this property. It is the only time they can truly show how much they think the property is worth," he said.
There is no reserve price for the properties, Feinstein said — so a property could conceivably sell for the opening price. Buyers must pre-register to participate in the bidding process. …CONTINUED
"As soon as (there is) a winning buyer, the contract of sale — already preapproved by the seller — is automatically e-mailed to the buyer."
The auction room at BidOnTheCity headquarters features touch screens, and Feinstein said he doesn’t expect screaming and shouting during the event like you might find at a typical ballroom-style auction.
Feinstein said the in-person bidding space can accommodate about 40 people per bidding event.
The whole team from New York Business Group is involved in the new auction venture, Feinstein said, and are assisting in showing the properties and preparing them for auction.
BidOnTheCity can accept both residential and commercial properties for sale, and Feinstein said he expects to handle one commercial property auction for every five residential property auctions.
Properties up for bid include an 899-square-foot one-bedroom, 1.5-bathroom condo on 5th Avenue, with a starting bid of $1.13 million and a 440-square-foot one-bedroom, one-bathroom condo on West 51st Street, with a starting bid of $399,000.
While the initial group of properties up for auction through BidOnTheCity comprises condos, Feinstein didn’t rule out co-ops. Co-op purchases are subject to co-op board approval in Manhattan, though Feinstein said, "We are equipped to handle co-ops as well," as language could be added to make it clear that the winning bidder is subject to board approval.
At this point BidOnTheCity has no plans to handle auctions for short-sale properties and other distressed properties.
At this time, the company is offering the platform only in Manhattan. "Vlad and I are strong believers that we have to work in the market where we know everything," Feinstein said.
There are several other online real estate auction sites in operation, including online national auction site RealtyBid.com and ZetaBid.com, a hybrid model featuring in-person and online bidding (see Inman News). Williams & Williams is also among the firms offering online real estate auctions.
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