Has anyone purchased through Hudzu? I hear the process is kind of a mess but there's a particular property I'm eyeing. The auction price is about $34k and the houses around it, that are currently occupied, are valued around $100k.
I'm out of state from this property; however I have a Realtor in market and with Hudzu you can get a code to go through the property. If my broker thinks it's a decent location, I was going to try to get a contractor or home inspector to walk through the property.
I've seen a few Hudzu posts in the search but wasn't sure if anyone had bought from them out of state.
I tried a couple of times but I thought the process was onerous and more expensive than it should have been, such that by the time I paid the fees the house was no great bargain. Eventually I just quit looking at anything that was listed by Hubzu, Auction.com, etc. I suspect a lot of these auctions are just designed to make you think you're getting a great deal, when it reality it's just some junk they can't sell on the MLS and are trying to capitalize on it by making you think it's a bargain. Kind of like the idea of "outlet" stores.
Also, the properties have a reserve price, that is often quite a bit below the "starting bid" aka teaser price. I have seen properties in San Diego go up for bid over 10 times, and each time not hit the reserve, so they wait a week and put it up again. I have seen a few deals close too. The 5% Buyer premium is steep on higher priced homes, and often a deal killer. Be presistent and you may find a deal.
I have both represented a buyer in a purchase through hubzu and also purchased an investment property through them as well.
They listed the house on the MLS through an agent. So, there was lockbox access to these. There were reserve prices, but when my bids didn't reach the reserve, they would contact me (as high bidder) and make me an offer. I suspect they gradually lower the reserve price and just keep re-auctioning over and over until it works out.
I believe they offered to pay for my title insurance if I used their title & closing company. It was onerous and annoying to deal with them, but it was well worth it in the end. The process was annoying, but I would do it again if it was a good deal.
We just bought one through Hubzu in March, and think it was an amazing buy! Built in 1995, no real issues or problems!
If you win the bid, chances are-- that's not the price they'll accept, ... they contact you with the actual reserve, and you can either pay that or it will just be re-listed again. We decided to pay the extra to use our attorney, or you can use their title company for free... but others have mentioned very bad experiences, so I kept mine. Since I use my attorney for all the title work, it wasn't bad at all.. he said he hated dealing with them though. Hope this helps!
I won an auction on Hubzu and tried to wholesale the deal. I was in the process of wholesaling when I discovered the property was occupied by professional squatters. They had a fake lease agreement written up and everything. There is a group of squatters here in so cal maybe other areas that have gotten so good they check the auction sites. They see a house listed and break in...draft up a fake lease agreement. I found this out after I pulled the title on an auction that I lost. I called the owner after about 5 Months and asked if he was interested in the deal I had just won on hubzu (better location for less money...I figured if they liked the last one they’d love this one) he told me the headache they had gone through with the last one. Fake lease agreement, took 6 months to get them out. The holding costs killed the deal and he said he regretted ever doing it. I think there is deals to be had on hubzu but I would account for 6 months of holding costs + construction time in your estimate. Just assume the worst tenants possible if it’s occupied.
OMG! What a nightmare! I guess the key is to have your realtor verify, but wow. Professional squatters indeed, with a fake lease and everything! What a mess.
@Courtney M. Bought a property (here locally) through Hubzu in May of this year ... have to say it was all pretty smooth. Used their title and escrow and while there were a lot of handoffs, there were no delays or issues and it was all good.
Anytime you buy something distressed (which is why it's on Hubzu and being auctioned in the first place) there's gonna be some "things", but overall I have no concerns and would do so again.
We looked at it from the outside and peaked in through the windows, and it had pictures before from when it was a rental online, so we had an idea.. but other than that it was site unseen.
Originally posted by @Courtney M. :
@Justin R., @Linda D., @Kevin Sobilo , did you go to see or have an agent go through the properties before you decided to bid?
The one I bought was vacant, but guarded at the front door by an angry swarm of bees hiving in the wall. I hired an agent as bee bait so I could get inside.
All seriousness, she (the agent) has brought a lot of value in securing other properties ... this one just happened to be a really easy commission for her.
@Justin R. , how did she get commission? She helped you after you won the auction? Forgive my naivete; I assumed an agent wasn't involved in these transactions due to the bid process.
Originally posted by @Courtney M. :
@Justin R., how did she get commission? She helped you after you won the auction? Forgive my naivete; I assumed an agent wasn't involved in these transactions due to the bid process.
When you place a bid, you have the option of naming a buyer's agent. The auction fee is the same to the buyer either way, so might as well either take the buy side commission yourself, find someone who will share it with you, or reward an agent who brings you value with a commission that requires very little work.
Oh, I didn't know that @Justin R. , thank you!
Thanks for asking, It was useful info to me!
Have bid on these sites for local housings. As a realtor I previewed inside and determine the renovation fee etc. I avoided the best neighborhoods and focus on smaller units not interested by investors. All events will keep running past the cut off time until no one wanted to bid up hours or all night. During the final minutes bids jump 50K -100K per increment even for these duds(I thought no one wanted them). You have to pay 5% hammer fee and a technology fee with your credit card. These homes are also on the MLS but you acquire through the sites.
I imagine if there are lots of inventory,duds like land is easier to acquire online. Most feel for the dead line and all hit high prices last 5 sec and found out it went on and on is the annoying part. Want to overpay? These are great sites. Finding bargains? Not sure.
@Courtney M. - I have bought through Hubzu, you need to realize it's only a digital platform for buyers and sellers with great process experience. Most of the folks having pains don't understand the REI, Sellers are financial institutions that are screwed up.
I purchased an investment SFR from Hubzu in June. While in contract and awaiting closing they evicted the foreclosed occupants and cleared furniture from the house. They paid Real Estate taxes to current and water bill will be paid. They did not accept my high bid but asked for $3500. more which I accepted. Property was strewn with belongings but overall interior was not trashed. Closed with their title company and they paid for Special Warranty Deed. The process was somewhat slow awaiting contract but overall fair. I purchased two from Auction.com and unpaid water bills, were required to be paid by me $1200. You have to research property for liens and outstanding Utiliies. I assume that I'll be redoing kitchen and baths which I figure into offer and cash flow. If they do not need replacing it's even a better deal. I buy out of state plug a realtor in as my rep, request they evaluate, take photos and I offer prop Mgt to them, or a listing if it's a fix and flip.
@Courtney M. , I went to see the property a couple times before I bid on it. I'm an agent myself, so I was able to show it to myself.
I’m a Realtor as well in Florida. I’m buying out of state in higher cash flow markets, often occupied without access.
From what I see, it is possible to buy from Hubzu, but there's not many real deals in the end. On the listings I've bid on, though being the high bidder, they're returned to market for not meeting the sellers reserve, which was never shown. The same property was returned to market several times, and each time the bids were lower, not higher, so I don't understand the reasoning. It takes a huge time commitment, and the same time spent finding properties that are actually available, or even off market would probably produce more results.
@Linda S. we're looking at a property on Hubzu right now. The first auction didn't quite hit the mark so they've relisted it - shocker. We're currently working with an agent that we feel is better suited for more traditional transactions and isn't very comfortable with REOs/foreclosures. At least that's what we've gathered from conversations. She recommended that we get a RE attorney for this transaction. Is it safe to say that we just need a RE attorney and no an agent at all? I found the property and have been communicating with the REO listing agent myself if that adds any additional context.
If you're using hubzu-- yes, absolutely use your own lawyer! It's more expensive, but it's less stress and absolutely worth it!