Auction.com. Does it work for you?

Question

I recently joined and subscribed to Auction.com.  I see a few interesting items pop up.  Some with buyers premiums, some without.  Some online auction with seller reserves and some just an advertisement for the courthouse steps.  My question to those knowledgeable folks out there is:  If you have bid on and purchased a property, can you describe your experience?   Was your property occupied?  If so, how did you address that after closing.  Thank you!

Joe Ebanks · Answer

How do you make sure the title is clean ahead of time when bidding?

I am worried about getting stuck with liens or encumbrances I dont know about. Cant seem to find how to search this information.

Sean Cole · Answer

My own experiences here, so yours may be different based on location or other factors.Auction.com has been getting a ton of HUD insured houses over the last year or so.  Those are the ones listed without a buyer's premium, as HUD doesn't allow them to add one.  Depending on the actual seller, you may wind up paying all of their closing costs as well (BoA is one example).  The starting bid generally has <some> relation to the final reserve - some experience following and winning auctions will help you learn those "tricks" (I'm leery of sharing everything I've learned on a public forum).  In my experience, just because a house is listed as occupied doesn't mean that's true.  I always do a drive by and verify.  If it IS occupied, you'll have to gain possession after closing by following the laws in your state.  In Ohio, it's basically an eviction so pretty easy.Xome and a few others operate similarly, though I've not yet discovered any relationship between starting bids and reserves on the other sites.  You'd be responsible for gaining possession of the house on all of the other sites as well.

The biggest challenge that I've had with all of the auction sites is the closing process being needlessly long and difficult.  We're closing on 1 purchase this week that we won on auction.com back in February!  That's unusually long, but I regularly have to wait 45 days or more.

Jamie Hinrichs · Answer

@Matt Ashton, there should be a listing agent somewhere on the auction post.

With HomeSearch it is on the right hand column. They may not know much - but it is worth a shot.

I have seen a few of these drop off the auction sites and get listed as a normal sale. I haven't figured out that decisions making process yet, though it seems as though banks are trying to auction the properties in need of more work to drive up the price, while getting other foreclosure properties painted, carpeted, and then listed at full value. We are in a strong market here, though these houses still seem to be sitting and the banks seem OK with that here. I have made many all cash / quick close offers where the bank has not budged and they are all still on the market - one is pushing 7 months.

As far as the price increasing - the auction sites will counter bid up the price to or near the reserve which is why so many seem to stall week after week at the same price.

Matt Ashton · Answer

Thanks Jamie. I wasnt aware that there was a listing agent for these.  I will definitely try to search that out.  It would be helpful to know if the eviction process was already in motion as well.  Glad to hear you had a positive experience.  In my case the property I was specifically watching had a retail value of $190k but a starting bid of $60k.  I watched the bidding steadily rise and go to $155k and the reserve was still not met. I was under the impression that it would go for far less or that the reserve would at least be lower.   Thanks again for your input.

Jamie Hinrichs · Answer

Hi Matt,

I recently purchased an owner occupied property on Homesearch, now Xome.com. The process was very smooth. I was contacted by a representative from Xome who provided me with step by step plans. I was a little worried on the timeline because I had to move some funds around, though we had plenty of time to bring everything together. I chose to utilize my title company, not sure if I would do that again as they also provided the service.

I strongly recommend finding the listing agent and reaching out to them. I was able to determine that the eviction process was already in motion and some basic info on the property. We also visited the property and met the neighbors / family members. They were defensive at first though opened up about the possibility of the owner renting the unit back. When we finally got the property, the house was empty, clean and winterized. Closing went as our others have - sans keys, no mention or reference to its occupied status, and I was under the impression that the eviction / meet the occupied process was on me. I was also given more owner-occupied credits than initially expected at closing, so all around a good experience though I don't know how common this is.

The auction process is still a big risk to me. There are always unknowns with auction properties so it helps to get whatever information you can get ahead of time. I am currently looking at another property and know the listing agent for this property as well, though need to get more info on the property, hoping to see it this weekend.

Hardly experienced here, though this has been my experience so far. Looking forward to seeing some other responses on this topic!

Thanks!