Investor · Conroe, TX · Member since 2013 · 30 posts · 8 votes
Hello,
I'm new to BP and was just wanting to get some opinions.... Have any of you ever used auction.com to purchase foreclosures? I see postings from them it seems like everywhere and I just want to know if this is a good resource for investment properties.
Flipper/Rehabber · Austin, TX · Member since 2009 · 405 posts · 168 votes
12y
I've purchased most of my deals from Auction.com and here is my assessment:
Beware of the shills. I don't know if it's true, but I've heard from the other side that the practice is used. Again, I don't know if it's true or not, but just don't get caught up in a bidding war. There are plenty of other deals.
Yes it's a pain in the butt to tie up all your money on EMD's while you wait for 21 days for the bank to decide if they will accept your offer or not. It doesn't seem fair, but those are the rules of the game.
Yes, sometimes your EMD gets lost. I've always received my EMD back, even though it may take a month or 2.
Always list an agent that represents you, even if they didn't represent you. This agent will be on your side and shield you against the transaction company's and the BS "attitude". It doesn't cost you any more, and your agent will be most appreciative.
Always check to see what the property wouldn't sell for when it was listed. If the auction price is getting close to that price, then go back and start looking at the MLS. Sometimes I've seen too much competition and utilize other strategies to get my deals.
I've found that the approval rate for auction properties are much higher than prior going to auction, much like there is a different set of asset managers looking at the deal.
Good luck!
I just closed a foreclouser that I purchased from them. I did not meet the reserve amount but they called me about an hour after it ended and was told to sign papers and send my earnest money in which was $2,500. They would want to close with in 30 days of the auction ending as long as the bank excepted my offer even thought it did not meet the reserve. They had 15 days to except my offer and called bacl on the 14th day and excepted the offer. I actually closed 37 days after the auction ended. If you have any other questions I would be glad to answer them.
Thanks for the response! Im guessing that all in all you are satisfied with the outcome? Do you feel as though it was a real steal? The bid amounts seem to start ridiculously low so that's what had me questioning the authenticity.
Flipper/Rehabber · Mentor, OH · Member since 2011 · 121 posts · 51 votes
12y
I have had no such luck winner any auction.com property. They seem to set the reserve very high. In my area they seem in no hurry to sell these properties and just hope someone over pays for the property. I wish they would call me with my bids. Hopefully you have better luck it is a definitely growing site with the number of properties being offered I hope I can get a deal off there but the numbers just aren't there yet.
Wholesaler · Lenoir, NC · Member since 2013 · 297 posts · 127 votes
12y
I feel that I got a deal the it is a 4/2 with 1 and 1/2 acres of land with taxes and everything of closing in all was under $11,000. The tax value is $82,000. The house started at $500. It was a smooth transacation but the people who I worked with were not real estate savy. I think is the best way to put it. But I had no problems.
Investor · Conroe, TX · Member since 2013 · 30 posts · 8 votes
12y
@David Lee Sounds like you got a great deal. I hope to be as successful with my bidding! Thanks for the feedback!
@John Ellia maybe it depends on the market area or who's handling the auction. Im gonna try in the Houston area and see what I come up with. I will give feedback on my experience as well!
Investor · Kern county Riverside County, CA · Member since 2008 · 494 posts · 261 votes
12y
Auction.com (formerly REDC) has teaser opening bids for their properties. They sell both REO properties and foreclosure auction properties. (trustee sales in California) Often I will see a published opening bid of $30,0000, for example, on a property I have valued at ARV $100,000 which would make it a great deal. However, there is a hidden minimum reserve that needs to be met. So the real opening bid might really be $60,000 on that same house, not $30,000. Depending on the condition of the house, it may still be worth it. I've been buying from REDC and auction.com since 2008 and have never got a property for the published opening bid. But, though it feels mainly like a waste of time, I have still bought plenty of houses from them, mostly as trustee sale auctions more than REO, however.
Investor · Decatur Atlanta, GA · Member since 2011 · 610 posts · 232 votes
12y
I justed attempted one bid and had registered for another bid. I didn't get the first, but am having trouble getting my deposit back. Has anyone had this problem before?
Rental Property Investor · Denver, CO · Member since 2013 · 4k+ posts · 2k+ votes
12y
I have read a number of places that people feel they are not always bidding against other real bidders on auction.com. For example they quit bidding without being the low bidder and ended up getting a call back to purchase the property. I know there are a number of reasons that could happen but it doesn't look good.
Also many of the auction.com homes around here are also in the mls before they go to auction.com. Not an insignificant number of times I have seen them sell for more than they were listed for in the mls. So any number of people were willing to pay more in the auction atmosphere then they were just walking off the street.
Know that people get swept up in the auction frenzy. Set your max price and don't go above it. Ever.
Also be sure you read their section on costs. There are many costs that are not insignificant on a higher priced home.
Knoxville, TN · Member since 2014 · 116 posts · 57 votes
12y
I have purchased 3 properties via their live foreclosure auctions. You just have to do you homework and make sure that you are gonna get a clean title. But they have all worked out to be good deals for me.
Flipper/Rehabber · Austin, TX · Member since 2009 · 405 posts · 168 votes
12y
I've purchased most of my deals from Auction.com and here is my assessment:
Beware of the shills. I don't know if it's true, but I've heard from the other side that the practice is used. Again, I don't know if it's true or not, but just don't get caught up in a bidding war. There are plenty of other deals.
Yes it's a pain in the butt to tie up all your money on EMD's while you wait for 21 days for the bank to decide if they will accept your offer or not. It doesn't seem fair, but those are the rules of the game.
Yes, sometimes your EMD gets lost. I've always received my EMD back, even though it may take a month or 2.
Always list an agent that represents you, even if they didn't represent you. This agent will be on your side and shield you against the transaction company's and the BS "attitude". It doesn't cost you any more, and your agent will be most appreciative.
Always check to see what the property wouldn't sell for when it was listed. If the auction price is getting close to that price, then go back and start looking at the MLS. Sometimes I've seen too much competition and utilize other strategies to get my deals.
I've found that the approval rate for auction properties are much higher than prior going to auction, much like there is a different set of asset managers looking at the deal.
Good luck!
Real Estate Investor · Waldorf, MD · Member since 2014 · 592 posts · 320 votes
11y
@Pat Martin Did you do a Title search before you bidded on the property? Or did the financial institution where you got the money (if it wasn't your own) include that expense?
Real Estate Investor · Waldorf, MD · Member since 2014 · 592 posts · 320 votes
11y
@Jean Norton Shills, you get a star Jean for helping me to increase my vocabulary. LOL! I had to look the word up. Not a word normally exercised. I would say scammed but your word blankets what you're saying WAY better. I just added your forum to my BM in IE.
Investor · Hampstead, NH · Member since 2014 · 20 posts · 7 votes
11y
Don't worry about the reserve ... last one I closed was below the reserve. And the listing broker said "It'll NEVER close at that price". It closed ... fannie mae takes 2 weeks to decide to accept the bid. Those 2 weeks come OUT OF the 30 days you have to close.
Have CASH ready ... deals can be had but it took half a dozen bids to finally hit one.
To "live" auctions were a circus ... no wonder they no longer exist.
Investor · Marshall, MO · Member since 2014 · 29 posts · 19 votes
11y
I never send an actual check with any bid to auction.com. When placing bid I send a copy of my company check made out to the local title co as a deposit , that way you dont have any problem getting your money back if bid is not accepted. If your bid is accepted it is covered at the closing
Good advice and much appreciated! A bidder just needs to keep the emotion out of it and try their best to gauge whether there's truly another bidder out there or just Auction.com counter bidding and they're bidding against themselves (each auction I've looked at, they have a bolded disclaimer that they can counter bid on behalf of the seller, until the reserve is met).
Investor · Marshall, MO · Member since 2014 · 29 posts · 19 votes
11y
It is acceptable form of down payment as long as you are dealing with a realtor. I would never send a check to any of the auction companies, you may never see your money for a long time
Southbury, CT · Member since 2016 · 5 posts · 2 votes
10y
@James Miller I know that this thread is already 1 year old but, it's been very useful. Can you please clarify this process or explain it further where you send your company check to the local title company. Are you referring to after you win the bid & have to send EMD? The check is payable to whom?
I bet you've found this info already, but I'm just in the process of purchasing a property, and I wired my money to the closing company account that Auction.com provided me, after I won the property (and also met the reserve).
Yes, you have to provide a $2500 bid deposit to register to place bids. I'm in the beginning processes of closing, so I can't attest to all fees, yet. I know there is no buyer's premium on this one. Not sure if Auction.com usually charges those. I tried to win another property on another site previously, and they did require a buyers fee. It's been about a week since I registered to bid, and the authorization for that $2500 registration on my credit card hasn't fallen off yet. The closing company has a $695 settlement fee and a $350 abstract fee that I must pay even if I chose another title company to close. I'm waiting for a preliminary HUD statement for them to see what the total 'out the door' price will be.
Flipper/Rehabber · Austin, TX · Member since 2009 · 405 posts · 168 votes
10y
I am fortunate enough to be a VIP Gold level client and found it to be highly beneficial, even to the point were people pay me to bid on their behalf! I don't have to pay the $2500 deposit and I've closed many transactions with auction dot com. Regarding the EMD and title company - the EMD goes to the title company of the seller's choosing. You can choose your own title company and sometimes the seller will pay the title insurance if you do, however there are times you will pull your hair out dealing with the seller's title company.
Recently Auction dot com has offered properties without a buyers premium. You must be careful on these as they are either occupied, or the title hasn't cleared back to the bank yet. Either way, there will be no listing agent to help you during the closing process. I've bought some like that and I'm having a hard time with hard money lenders because they want a full appraisal. Since nobody can get inside the unit, the hard money lender wants the buyer (you) to take on more risk.
Your post is spot on (thank you!), because these are exactly a few of the things I've come across....
Yep, ours was a no buyers premium auction. And, now I understand why.... because originally when I was pulling the assessment, it was still in the foreclosed upon owner's name. It pulls up in the banks name now, so phew......
About the closing process.... I'm surprised that the Seller's title company wants to charge me a $695 settlement fee and $350 abstract fee, even if I choose my own closing company (and cover the cost for that, of course - approx $500).
Could you please confirm that these fees sound 'normal'? If it is, so be it. I'm still going to go with a local company for this first closing.