Auction.com tactics. What is this BS??

Question

So I haven't bought at the Auction forever. I was thinking buy a few cash and resell regularly for a quick profit.

Reading the fine print used to back in the day there was a reserve but if you only bid and they started at 20,000 and you ended at 40k then even though the reserve wasn't met they would send to the seller for consideration to accept or counter.

Now there is possible counter bidding on behalf of the seller but you do not know if it's the seller ( auction company) or a real buyer. This is total BS and price fixing. They call it illegal when buyers do this kind of stuff but it's okay apparently for Auction.com to play these games.

I think I might not even bid now if this is the kind of stuff they are doing.

Joel Owens · Answer

Yeah I also noticed and this is the biggest thing for me that many of these auctions it lists the property as occupied and not to approach it.

I would assume these are the homeowners who have been foreclosed on. The banks are trying to sell off a problem at a premium. You can't assess damage fully and you might have a mess getting them out. It could take one month or six months to get them out of the place. GA is pretty straightforward.

I would have to buy it pretty low to compensate for that aggravation as for selling the longer I have to wait to resell the return goes down due to time.

Patrick L. · Answer

Well everyone has always suspected them and others (like Hubzu) of doing it and now they just spell it out on every listing.  It's no longer just a suspicion, it says right on every auction listing that:

Until the seller's reserve price is met, Auction.com may counter bid on behalf of the seller.  Counter bidding gives buyers and sellers more flexibility to find a  mutually agreeable price. Counter bids do not occur after the seller's  reserve price is met.

Paul Hoeppner · Answer

I've had instances with auction.com specifically where I'll stop at a number, get outbid, then get a call from the website asking if I'm still interested in the house at the last price I bid.  At this point, you can even knock off a couple more thousand (depending on the bid increment).

Jennifer Lee · Answer

@Joel Owens Thx for your last post.

Very timely, just got a call today about auction.com and it says do not disturb occupant.

I was wondering how to advise said client ;)

Jennifer Lee · Answer

I think it's their way for targeting owner occupants and weeding out investors.

It's all over for foreclosure not just online!

I have no idea if we are dealing with phantom bidders, dual agency or what!

And if your bid gets accepted, the headache continues it doesn't stop hahaha

Dzmitry Zakharau · Answer

Well, think about it from another perspective: by allowing auction company bid on sellers' behalf, the process goes WAY faster. It could take days to get a response from the seller that's already overwhelmed with asset volume. This is the largely the reason they hire an auction company to begin with. So, like @Wayne Brooks said, bid to your number, then quit.

Wendell De Guzman · Answer

This is one of the many reasons I hate bidding at auctions...and if auction.com is doing what you suspect it's doing, then we should stay clear of it. There are better ways of finding deals.

Wayne Brooks · Answer

Yep, they "reserve the right to bid on behalf of the seller".  This is much like our online foreclosure auctions, you don't know if you're bidding against another bidder, or the bank, as their reserve is hidden.  Same as always though, bid to your number, then stop.