Buyers Publicly Watching, Reacting As Price Drops $10M Per Week
By Lore Croghan
Brooklyn Daily Eagle
It worked great with tulip bulbs, so why not a Carroll Gardens condo?
Real estate executive Bill Ross is using a Dutch auction – first conceptualized in 17th Century Holland – to sell an apartment at 411 Clinton St.
Once a week, he lops $10,000 off the asking price, which was $695,000 when he started on May 28. He vows to keep cutting methodically, $10,000 every Saturday, until he gets an offer that matches his asking price.
“I thought it would be cool,” Ross, the director of development marketing at Halstead, told the Brooklyn Daily Eagle.
He bought the five-story, 10-unit walk-up rental building more than a decade ago and converted it to condominiums three years ago.
“I thought what the heck – I'll test the market at a price that's higher than what I thought it would sell for,” he said. “You know I like to have fun.”
Ross hasn't spoken out about his Dutch auction until now – but real estate-obsessed New Yorkers have noticed it's going on without him publicizing it. They've seen the listing's price history on website StreetEasy, which shows every decrease and indicates that as of July 13, the ask is $635,000.
“People look on StreetEasy and are figuring it out,” said Ross, whose Brooklyn Heights and Cobble Hill firm William S. Ross Real Estate was acquired by Halstead in 2007.
Halstead is handling the listing on two-bedroom, one-bath Apartment 5, which has high ceilings, wood floors – and a shared rooftop deck to make friends jealous, with views of the Statue of Liberty and the Empire State Building.
The building was constructed in 1925; the apartment was renovated two years ago, Ross said.
Before he put it up for sale, he really didn't know what its price should be.
“There's such scant supply in the neighborhood,” he said, with very few recent sales of condos for him to use as comparables, and no sales in his building in 2½ years.
Current Carroll Gardens listings are heavier on townhouses and multi-family buildings, according to StreetEasy.
He decided to go with a Dutch auction – inspired by the way tulip bulbs were sold in Holland in the 1600s, with an initial price set, then lowered until there were takers.
Today the Dutch auction is used to sell U.S. Treasury securities, and as an alternative method for pricing stock in initial public offerings. Google's IPO was handled in 2004 with a modified Dutch auction. But Ross doesn't know of anybody else in New York City who's using this sales technique to move real estate.
“This seems like the perfect way for the market to determine the true value of this condominium,” he said.
The process requires a certain patience, to be sure. He began more than seven weeks ago but hasn't landed the right buyer yet.
“I've been getting some offers, but not to my liking,” Ross said. “I know what the price will be next week – and so do they.
“When I get a full-priced, qualified offer, I'll take it. Otherwise, I'll keep lowering the price.”
He didn't want to deploy the “fairly common tactic” of setting the price too low and sparking a bidding war: “I'm not a fan of breaking people's hearts,” he said.
He does his weekly price-chopping as a prelude to open houses held every Sunday – there was even one during the Fourth of July weekend. Despite hot temps, at least 25 potential buyers have shown up at them, and usually 40.
Some would-be buyers want to do their own renovation, and are waiting until the price gets low enough so they can afford a makeover, he thinks.
By the next open house, scheduled for Sunday, July 21, the condo's price will be $625,000 – $75,000 lower than when he started the auction.
“I think we're getting close to the right price – the sweet spot where I will get full-price offers,” he predicted. “I think it might be this Sunday or next.”
Click to see the apartment listing. But be aware – the asking price it displays will be $635,000 until Saturday, July 20.