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The Curious Case of The Underpriced Noho For Sale By Owner

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Above, images of unit 6B at 718 Broadway in Noho, a co-op building where the enterprising owners are selling a 1,400 square foot, two-bedroom unit all by themselves—yep, For Sale By Owner style. But here's the reason we're intrigued: a recent PriceChop from $1.25 million to $850,000, which brings the price per square foot to $640, about $400 below where comparable units sold in the building last year. Signs of that severe market downdraft, or is there something else going on here?

Why the discount? First, we've got a stifling maintenance of $1,758/mo. Not fun, and perhaps a sign of building distress. Neither bedroom has a window to the outdoors, though the rather nice interior design offsets that concern somewhat. And, there are additional risks associated with neighboring lots, as sussed out by an Apartment Therapy commenter after everyone's favorite design blog featured the unit earlier today:

There was a glut that sold [in the building] last year after speculation that the parking lot directly outside the window (lafayette st) would be developed. I'd have to imagine that with the limited financing available that nothing is getting built there anytime soon. It is almost inevitable however. 2 yrs, 5 yrs, etc.
But blogging broker Sandy Mattingly, the Manhattan Loft Guy, susses out the real reason for the low asking tab: the owners expect to get a lot more for the place. From a blog post written by the owner, a self-admitted former eBay addict:
Though it’s not exactly an “auction,” by setting the price insanely low you will get a lot of offers that will result in a bidding war? as long as you get the word out about your property for sale. Fortunately, the only thing you have to do that is get it on the MLS? and there are plenty of services that will do that for a flat fee.

Now that you’ve created interest, and shown buyers you’re serious about selling, you just have to hold a few open houses and let people know offers are due by a certain date. (Just like a 7-day auction, you need to give a little time for people to find your amazing deal.) Et voilà, just like eBay, there is now effectively a 0% chance for your place to sell for less than the current market price. Whether that is an amount you’re willing to sell it for is a different matter, but now at least you know and you can stop wasting everybody’s time.

Auction ends at 5pm on Sunday, March 15. Get your bids in now! And meantime, kudos to the sellers for the most entertaining sales strategy we've heard in awhile; it'll be fun to see how this one plays out.
· Free Web Hosting for Life! [Dreamhost Weblog]
· 99 Cent Pricing on eBay Leads to 400ft Underpricing in Noho [MLG]
· FSBO: 718 Broadway, 6B [718apts.com]
· FSBO: Noho Loft [Apartment Therapy]