Investor · Spokane, WA · Member since 2014 · 733 posts · 155 votes
Anyone out there purchased any property through Auction.com? Please tell me your story...I am interested to see if there are deals out there. Would like to know some tips on what to look for and what to keep an eye out for?
@Bryan C. trust deed auctions are technically called "Trustee's Sales" and in most cases they take place on the courthouse steps. It is for that reason that slang has developed to label such sales as "courthouse auctions" or "on the steps". It's all the same thing. Trustee's Sales (in Trust Deed states) and Foreclosure Auctions (in mortgage states) are part of a legal process where a lender conducts an involuntary sale of a debtors property. Title is conveyed via a Trustee's Deed and the buyer is simply assuming the same position in title as the foreclosing lender. There is no guarantee of clean title at all.
In the context of this post, another type of auction has been discussed: the online auction. These auctions are held via a variety of websites and typically are not part of a legal process. They are voluntary sales where a lender is either selling a property that they already acquired in an involuntary sale or are facilitating a short sale. In some cases these online auctions are even held on behalf of non-distressed market sellers seeking an alternative to conventional selling channels. One exception is in Florida. Some counties there actually hold their "courthouse steps" auctions online but that wasn't part of the preceding discussion in this thread. Hope that helps!
@Bryan C. I am pretty sure you need a licensed realtor to submit bids on auction.com listings for you. The only thing that may be tough is bidding on a house that you have never been inside and don't know the depth of repairs it may need.
Are you able to view these properties before bidding?
I am a realtor/investor in south Carolina, and I have kept an eye on quite a few properties on auction.com, but have never bought anything. To even be able to bid on a property you have to create an acct, and give them your cc information so they can put a $2,500 hold on your card as a binder. I have also noticed that most of these properties that I have kept an eye on have a reserve. The reserve is usually not met on the properties, and therefore the auction ends just to have it reappear in a week or so. I also know that on some of these online auction companies (hubzu included), that they can bid the price up higher on behalf of the seller. Also, many of the properties that I have seen in my area on auction.com are occupied, and they do not allow (legally) you to disturb the "tenant" to inspect the property. Last, from what I have noticed many of the properties (even if they are in good condition) are cash only offers. So far, I am not really impressed with the site. Maybe other people will comment with a success story. I have purchased properties on Hubzu.com, and the process was terrible, but I did end up getting a great deal. Best of luck.
Typically we always suggest that the buyer do proper due diligence on any property they are looking to bid on. This might include title research, obtaining a real estate lawyer, driving near the property (and viewing the inside if open houses or private viewings are allowed), contacting the listing agent, etc.
You actually do not need a real estate agent to bid on Auction.com - though in many instances it is allowed and there is a commission available.
In regards to bidding on behalf of the seller - at least for Auction.com - this is only done up until the reserve it met, as the seller typically won't agree to anything less. Once the reserve is met, the "counter bidding" stops. Even if the reserve is not met, there are opportunities for the seller to sell it below the reserve price to the "second place" bidder, but this is not always the case and the property will often go back up for auction again at a later date.
I understand that you are looking for other customer reviews (which is a great idea), but if you have any questions about our policies, website, etc - please don't hesitate to ask.
@Bryan C. I've bought 50 or more houses from auction.com but most of that was two to three years ago. For the last couple of years I bid on a dozen or so houses every week and get one every six months. A lot of the houses I bid on lately are repeats. I've bid on some houses every week for months, and there are a couple that I've bid on several times for over a year. While there used to be deals, that's not the case lately.
If you do plan to bid, most of the sales are cash (some allow financing and the listing will say so) and many don't offer title insurance and are conveyed by quitclaim deed. In those cases, bidding requires the same level of due diligence (and title examination) as bidding on the courthouse steps.
Thanks for the update. That's kind of what I have been hearing about auction.com
I appreciate the info on the title insurance @ quitclaim deed....I personally like to stay away from the quitclaim deeds because I have little knowledge on them.
Ever bought properties @ the courthouse steps? What kind of research and due diligence to you do as prep? Thanks.
I've bought a few on the courthouse steps. Well...500 or so. DD consists of a title search, bankruptcy search, "curbside" inspection, property tax inquiry, valuation, and the math of determining a maximum bid price. If quitclaim deeds make you nervous, a trustees deed won't give you any reason to sleep soundly at night.
what is the difference between 'buying from courthouse steps' and trust deeds auctions?. A follow up question is: what title do you get on either of the instances?
boy, do i agree with adam. hubzu is the absolute worst to deal with. i have been fighting with them for nearly a month now on a property. i was the only bidder. my bid was well below their reserve price. when it ended, i still had my original low bid. they countered with lowering their reserve by $4000. however, they would not let me counter with anything else. it was a take it or leave it situation. not a good way to deal with your only bidder. i bought it. since then, they have sent me a purchase agreement to sign, which i did. my partner was out of the country at the time, so i notified them of the date he would be back and asked if they could delay things a bit. all of a sudden i was getting threatening emails from the about cancelling the sale. i got permission to sign my partners name and send the docs over to my agent. he faxed them in. i still got threats from them. i had my agent refax them again. both times they claimed that they got only 1/2 if the doc. and again, another threat to cancel. they told me i had 2 days to sign he " contract" or hey were cancelling it. they NEVER sent the contract to my attorney or my agent. we had to beg them for it. it finally came, we signed it and sent it back in. they got back to us stating that there was a signature missing. we asked where as no one could find it. they literally sent my agent an email back that said " find it yourself". then another threat to cancel the deal came in. i finally had to tell them that i would sue them for breach of contract before they gave us a little more time. at this time, i am still getting threats to cancel, but they have never set a date for closing. do NOT deal with hubzu. you can't even understand their agents on the phone anyway. i have bought one deal thru auction.com and they are fantastic, no issues. they are the site you want to deal with
@Bryan C. trust deed auctions are technically called "Trustee's Sales" and in most cases they take place on the courthouse steps. It is for that reason that slang has developed to label such sales as "courthouse auctions" or "on the steps". It's all the same thing. Trustee's Sales (in Trust Deed states) and Foreclosure Auctions (in mortgage states) are part of a legal process where a lender conducts an involuntary sale of a debtors property. Title is conveyed via a Trustee's Deed and the buyer is simply assuming the same position in title as the foreclosing lender. There is no guarantee of clean title at all.
In the context of this post, another type of auction has been discussed: the online auction. These auctions are held via a variety of websites and typically are not part of a legal process. They are voluntary sales where a lender is either selling a property that they already acquired in an involuntary sale or are facilitating a short sale. In some cases these online auctions are even held on behalf of non-distressed market sellers seeking an alternative to conventional selling channels. One exception is in Florida. Some counties there actually hold their "courthouse steps" auctions online but that wasn't part of the preceding discussion in this thread. Hope that helps!
@Ndy Onyido It's not that you don't GET clean title, you just don't get a GUARANTEE of clean title. That's an important difference. It's quite possible the title you receive will be just fine or easily correctable by paying whatever liens survived the trustees sale (which may or may not be a big deal).
If the title is particularly messy there could be instances where you would have to initiate a quiet title action to seek to perfect the title. I've never had to do that, however. Then again, I do my due diligence before I buy so I know exactly what my title will look like and if it's a mess, I don't buy.
Hey Brian what cities have you bought auction properties in?
As far as due diligence for potential properties, do you have any recommendations on property inspections?
A lot of cities in Northern California. Probably most of the cities an at least half a dozen counties.
As for inspections, most of the ones that I bought were occupied so there was no opportunity to see inside, much less conduct inspections. My DD was limited to a title search and a drive-by in most cases.
when the property is occupied, does the tenant leave when the deal closes?
If you want them to move, they will, after you convince them to do so. Which may simply be after a conversation, or after evicting them through the court if necessary.