Here is the background behind my predicament, as I said in the description, I have been trying to purchase an REO property for the past 3 weeks on Auction.com. I am the only actual person bidding on this property every week but every time I submit a bid, the automated counter bid feature activates and I am outbid yet again. How the feature on the site works is that the seller of the property places a "Reserve" price, which is the minimum price that they say they will accept the purchase at. Every time a bid comes in below the reserve price the seller counter bid activates and the bidder is outbid by the site itself, which does the counterbidding on behalf of the seller. While I understand that the seller wants to get an acceptable price for their property, my main gripe is that the seller has configured it so that every bid must go up by increments of 10,000 up to a certain point and then 5,000 after that. So if I submit a bid for 30,000, the counter bid feature activates and automatically bids for 40,000. My only hope to get back into the running at that point is to submit a bid for 50,000. Towards the end of the auction, in the final 15 seconds usually, the counter bidding feature activates again so that the seller bids against themselves again to lengthen the auction by another 2 minutes and raise the price by another 5 or 10 thousand. This usually happens about 2 or 3 times every auction. Apparently, the counter bid feature only goes up to until the reserve price is met but every time that the auction ends, the price that the automated counter bidding system has run it up to is far beyond what I am comfortable paying for the property and it still says that the "Reserve price is not met yet". The intent for this property is to be a flip and I am not even allowed to have interior access even though it is not currently occupied so I cannot even guess what my potential costs to flip would be. Is there a solution here? Or do I have to just hope that the real estate gods smile down upon me one day and have the seller accept my bid? Any and all advice would be appreciated.
Account Closed I've heard similar stories from buyers trying to acquire from this website. I don't think there are any work around's unfortunately. Keep at it!
I have purchased from them several times and you describe the experience almost perfectly.
It’s frustrating, but as of now, looks like it will not change anytime soon. Good luck!
@Account Closed You got it. That's how it works.
Account Closed Your frustration seems to be that the seller is wanting more for the property than you want to pay fo it. That's not unusual. I run into the same problem 90% of the time and move on to the next property.
What kind of discounts do you really get off market? 20-25? I wouldn’t pay more than 50-60 of market.
I feel like that's shady as hell. That's just such a poor business practice. Is there not some way to try and make an offer to the bank that owns it outside of auction.com? Try doing some digging in that direction.
You could try but I doubt you would get very far. I tried to buy a property off Auction.com for over a year and they never reduced the price. Someone finally overpaid for it.
All you can do is put in the price you are willing to pay and see if they eventually accept it. Might be a year or more before they do. I put in one bid at the price I will pay and walk away, but bid on the same ol' property every so often to see if they got a real price yet. In my case I found a relative of the person who was foreclosed on and know there is leaking plumbing, no heater and the kitchen cabinets were taken while it was listed, saw them taken away week after week. I know their price is crazy and they know it too. But they hope and wait for a fool.
Account Closed No.....it’s the Bank that is setting that reserve....what would you accomplish if they Would talk to you?
Just bear in mind that you are not the customer. The seller is, and everything is done for their benefit (i.e. phantom bids, bid time extensions, and minimum bid increases of $10k) . I purchased an out of state rental last year and am happy with purchase despite bad service. I won a 2nd property and a low level service person kept telling me that they regularly do 1031 exchanges, which they would not do. However APIexchange had told me in advance it was not likley. I just won another out of state occupied forecluse from them below the reserve price. They phoned me about 3 minutes after winning to request proof of funds and a signed contract. We will see how this one goes. My SDIRA is buying the property.
@Account Closed I.know this doesn't really answer your question but I thought i would let you know I'm currently under contract for a property I purchased through an online auction using Hudson & Marshall and they have been excellent! I will make a YouTube video sharing the whole experience once I have the deed recorded! 😍 so if you're looking for other options I highly recommend HM for future properties
I have heard good things about Hudson and Marshall also. But like everything...do your research!
Account Closed -- Continue to be persistent and stick to your numbers. There are many other online auctions site that I use more frequently than auction.com.
XOME, Hudson & Marshall, Hubzu, Reality Bid, Auction Network, etc.
@Michael Nyszczot What's your experience with Hudson & Marshall? I have experience with Auction.com and have heard good things about Hudson & Marshall but wasn't sure if they also do the counter bidding. Do they ever drop their starting bid? Auction.com seems to but there is a house I want on Hudson & Marshall and they haven't changed the starting bid in close to a year. I haven't bid yet but I am thinking about it to see if they ever contact me wanting to take my bid even if it is under the reserve.
Hudson and Marshall was our number one auction site a few years ago. We still purchase from there but it is no longer our number one source. Our recent experience with Hudson and Marshall is they are now selling mostly HUD CWCOT's with occasional Fannie Mae and Freddie Mac's, Wells Fargo, Chase, and Bank of America. Properties must go to more auction cycles to be able to be purchased at the right number.