BidontheCity is a new auction website in New York. You can use it to buy or sell residential or commercial property located in Manhattan.
Here’s how it works:
* Prior to listing, Sellers sign an exclusive 45 day Listing Agreement with BidontheCity (BOTC)
* BOTC charges the seller 3% (Seller Premium), which is added to the purchase price
* BOTC also charges the successful buyer a 3% Buyer premium, which is also added to the purchase price
* Sellers agree on a standardized Contract of Sale, which buyers can see before bidding
* Seller sets a Minimum sales price
* Auction is held 30 days after the property is listed
* Buyers can review property details online, attend Open Houses
* Buyers have up to 30 minutes to bid on the property
* Buyers can bid in person at 226 Fifth Avenue, NY or online
* All bidding is live and with simultaneous audio and video broadcast
* The winning bidder has 48 hours to sign the contract and deliver the down payment in escrow
* Seller and Buyer follow terms of Contract until closing of title
* If seller withdraws the property prior to the auction, the seller is charged a withdrawal fee of 2%
The company is based in Manhattan at 226 Fifth Avenue. The bidding machine was built by PropertyShark, the souped up Zillow of New York (without the zestimates but a whole lot more).
Interesting idea.
My Take:
1. I do not care for the Listing Agreement clause which says the property can only be listed and advertised on bidonthecity.com. Why?? IMO it can only hurt the sales price by limiting visitors who might come in from other sites. Since BOTC gets a 6% buyer/seller commission, it seems like a double dumb move.
2. Sellers ought be aware that BOTC is not their agent and thus, owes no fiduciary duty to them. (see para. 14 of the Listing Agreement)
3. The addition of the 3% buyer and 3% seller premiums to the total contract price means the seller will pay higher New York transfer taxes than if the premiums were not added to the purchase price.
4. Seller’s listing agent is made to sign the BOTC agreement which forecloses advertising listing by the agent. Since agents know best where to list property, this restriction is not something I would like imposed on me or my client.
Here’s their promo video:
What do you think?
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