There must have been some epiphany on the 4th floor of 25 Ann Street in August: the owner tried to sell this "2,300 sq ft" loft for $2.5mm starting in June (for two months and one price drop to $2.35mm with a firm I have never heard of), then switched to Corcoran at $2.35mm until finding a contract just before Labor Day. That contract price was revealed after it closed in November (though it took quite a while to hit the public air) as $1.8mm -- 23% off the last asking price.

 

Maybe the owner's attitude changed overnight from not-a-penny-less-than-$2mm to will-take-any-offer, but it seems more likely that the owner took enough time in this dramatic change of heart to update the agent community that low-ball offers would be entertained (hell -- not just entertained -- that they'd be put up at the Waldorf). I have no idea why they did not; it probably cost them some money.

broader point about psychology
Using this painful Manhattan loft story as a jumping off point, this scenario shows the danger of coming to market at a price far removed from where buyers are: you don't get any offers and you probably get little or no open house traffic or phone call inquiries. Then a low-ball offer comes in and a (now, very motivated) seller deals with the only person willing to pay any money for the loft. The owner then runs the risk of losing this low-ball-bidder if they publicly adjust the price and continue marketing, so the temptation is to simply strike the best deal possible with the only one interested.

Had the owner priced closer to The Market, there might well have been other bidders (even if throwing low balls); had the owner priced at The Market, there might well have been higher bids than the solo low ball.

Manifestly, if a low ball bidder was willing to pay $1.8mm (off an ask of $2.35mm), that bidder started even lower ... maybe $1.65mm. Other people who may have been interested in the loft if they knew the owner would entertain around $2mm would probably have emerged if only they had been aware. This kind of a spread between Bid, Ask and Clearing is very dangerous to sellers.

© Sandy Mattingly 2009