I've seen this happen 3 different times now. A house from auction.com is listed, dissappears, and ~45 days later ends up on hudhomestore.com. The first two houses went through several auction cycles, reserve was never met, and eventually became a HUD house.
There was another property, I was emailed from auction.com about how the bank was really motivated on the property, and I watched the auction. First week reserve wasn't met. Second week reserve was way lower, and in the last minutes was met. I was the final high bidder till the last 30 seconds, got outbid by $1000, didn't want to go any higher, and that was that.
The house is now on hudhomestores.com. I know auction.com will bid against you, but will they do so after the reserve is met? Or did someone win the bid, not close, and whatever reason the property is now on hudhomestore.com?
Does anyone else observe this transition from auction.com to hudhomestore.com?
I have not seen this, but I believe it. There's lots of funny stuff I learned once upon a time working short sales...and that is that we don't know what is going on behind the scenes. In this case I'm guessing the lender had FHA insured loan. So they try if they can to sell it themselves through auction.com. If it ends up better for them financially to turn it over to HUD they do. So they tried auction, it didn't work, so they punted to HUD. I've also seen that with mortgage insurance. Lender/Servicer tries to sell, they can get their punt price, so turn it over to MI company to sell.
This is a fairly common practice these days in a good real estate market. The lender is trying to mitigate their loss or in some instances make a profit so they try to sell the asset via Auction.com, Hubzu or H&M before collecting on the FHA insurance and transferring to HUD
We are a national REO Auction company. Veteran-founded, family-owned. Over 200 auctioneers in the field and a full time staff. Been doing auctions for almost 28 yrs. We don't work with private owners, only banks, servicers and portfolio managers.
We do NOT bid on behalf of the seller up to the reserve price. We market and advertise the asset and the market delivers the best results. No reason to mess with something that clearly works.
The auction concept works. No doubt. But it is slowly being eroded of it’s benefit when the consumer feels like they are being bamboozled. And I’m not talking about a jelly bean that you thought was going to be tutti-frutti and instead is stinky socks. Buuuut maybe that’s what RE auctions are turning into be...
Not cool jelly beans. Not cool
There's a lot of great people at other auction companies. Lots!! And there are many other auction vendors that provide a valuable service to the marketplace. But in the Terms & Cond - it will disclose that the auction company may bid - on behalf of the seller - up to the reserve price (which is rarely ever disclosed).
Yes. The reason why this happens is because Auction.com facilitates the trustee sales PRIOR to the property being reverted back to the lender (if no one wins a bid on it). Then, in some cases, the lender wants to try another round as an REO (after it's reverted at the live auction trustee sale). If not sold after that, the property can go to HUD if it is an FHA backed loan to minimize the lender's loss on it.
At least that is my experience with Auction.com in AZ. I am sure someone else will come in with a different experience elsewhere.
Auction.com is very sneaky. You have to always assume it is them bidding against you. Recently, I was the high bidder and the reserve was met. Literally at the last second they bid it higher. I was expecting it. I did not bid any higher. The next day they emailed me that I could have it at a lower price than I bid. They do crazy things. Just be prepared for it.
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