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Abandoning Ship: Buyers Forfeiting Million-Dollar Deposits

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Yesterday the Times dropped a bomb on the real estate world with its report, shrouded in mystery as to specifics, of a batch of new condo developments that could be auctioned off to the public come April. Now, the paper follows that story up with a second barrage in its sky-is-falling bloodbath: buyers are walking away from six-figure deposits rather than close on apartments suddenly worth far less than when the contracts were signed. While that's not new information?The Real Deal reported in December that more than 10% of scheduled closings just aren't happening, and telecom mogul Michael Hirtenstein recently gave up millions on his One York assemblage?we do get some fresh gossip.

Above, the gorgeous duplex penthouse at 304 Spring Street, a new Zakrzewski Hyde boutique condo building near the river in Hudson Square. The duplex, with private roof deck, is listed at $6.75 million, but a "professional basketball player" was in contract to buy it for $7.8 million (it hit the market at $9.25 million in 2007). In October he backed out, forfeiting the $780,000 deposit (ouch!) and now the developer will sell the apartment in a sealed-bid auction in March, with a starting bid of $4.995 million.

Of course, that's not the only case. On the Upper East Side, Vivian Toy reports, a buyer forfeited a deposit of as much as $1.1 million at 1120 Park Avenue, and, "Real estate agents representing buyers of at least three other multimillion-dollar properties also report clients who knowingly left deposits of more than $1 million or hundreds of thousands of dollars on the table." Will those buyers return to the negotiating table and try to reclaim their trophies at bargain prices? Or are they just waiting for the auctions?
· Apartment Buyers Abandoning 6-Figure Deposits [NYT]
· Coming Soon: New York City Condo Auctions [Curbed]

304 Spring Street

304 Spring Street, New York, NY 10013