Auction.com, how can the site automatically bid against me??
Ok, so auction.com says- and I quote..... "ADC may counter bid on behalf of Seller on any Property up to the amount of the Reserve Price"
How is that legal, isn't that like a realtor saying they have other offers when they really don't have any. I'm curious to know how can this site make a "fake" bid just to push the price up on a house. They start the opening bid super low, then set a reserve super high in our area, Hampton Roads.... This seems illegal to me. Please tell me if I'm wrong about this....?????
Hi @Kris Haskins,
It's quite common in any auction. More of an auction thing than a Real Estate thing. They do it with those car auctions or any thing being auctioned off. Set a reserve price. For that matter Ebay does it on any item going through the auction process. "Reserve not met".
Hey kris! Rob Costa here...we had coffee a few weeks back...anyway, I just got a property under contract today from Auction.com. They have under their bidding guidelines that someone (behind a computer desk) will raise the bid on the property until it reaches the reserve price that the seller has established. This is common practice for them....so unless you are willing to go to the reserve (which you don't know what it is) then for the most part your bid will not allow you to purchase the property.
What I have done is call their bidding department and you can give them what is your best offer on that property and they will let you know if it's a "A", "B" or "C" type of offer at least giving you an idea if you're close to the reserve.
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Perfectly legal.....just like the bank bidding at the actual foreclosure auction to protect their interest.
Roberto Costa that's great insight. How was closing, customer service, etc? Was the house what you expected??
auction.com is greedy and I haven't really seen that many good deals on the site. I would suggest going to an actual trustee sale. There are some deals there sometimes especially if you are the only one that shows up and the starting bid is low enough which you won't know unless you attend. You can find out about the trustee sales through realtytrac. The ones also advertised on auction.com will probably be too crowded.
Marshall,
we are scheduled to close Sep 6th...I'm trying to move it up since it's a cash deal. DO NOT USE THEIR closing and title companies!!!! Use your own...trust me will save you the hassle. Customer service has been pretty responsive but they use SERVICELINK as their closing agents....check BBB, you'll be surprised how many bad reviews they have.
The house was what I expected. I already have a buyer so this will almost be a double closing...$5K in rehab cost and somewhere between $14-15K profit. Easiest flip I've done so far.
Originally posted by @Roberto Costa:
Hey kris! Rob Costa here...we had coffee a few weeks back...anyway, I just got a property under contract today from Auction.com. They have under their bidding guidelines that someone (behind a computer desk) will raise the bid on the property until it reaches the reserve price that the seller has established. This is common practice for them....so unless you are willing to go to the reserve (which you don't know what it is) then for the most part your bid will not allow you to purchase the property.
What I have done is call their bidding department and you can give them what is your best offer on that property and they will let you know if it's a "A", "B" or "C" type of offer at least giving you an idea if you're close to the reserve.
Hey Bro, that's cool. I've had bad experience. I'm glad you can get them on board... thnx for the insight on that one...
@Roberto Costa It's great to come across your post about this because I just started a thread about something similar this morning. Is ServiceLink a facilitation company, or an actual closing company? As you are using a local company, are you still paying ServiceLink some standard fees?
The seller's title company, in my case, is Bay National. I did also choose to go local, so I'm essentially paying them both about the same $, as Bay has $1000 in fees for settlement and abstract no matter who I close with. Is that what you are doing, too? Your Sept 6th date... wow. I'm a cash buyer too, but that didn't seem to factor in at all.
I'm not sure what service link does exactly but the horrendous reviews made it an easy choice to go with my own title and closing companies. My cost so far are just the purchase price for the property plus $450 settlement charges, $250 title search, $100 Admin expenses, $400 survey, $330 Title Insurance.
I'm trying to get closing moved up.
@Roberto Costa If you get off that cheap, consider yourself lucky. I think it depends on the contract, the bank, and the seller's title company. Auction.com told me that it depends on the banks oversight. Definitely something I'll never make assumptions about again. Thanks for clarifying. Very helpful.
Even e-Bay has a similar feature. I believe they call it "proxy bidding". You enter your maximum bid, but the item only shows a current bid which may or may not be your maximum. When some one bids higher than the current bid, if the system can re-bid for you at or below your maximum, it will. See the explanation on eBay to learn how it works.
The RE Auction sites use something similar.
Originally posted by @Wayne Brooks:Perfectly legal.....just like the bank bidding at the actual foreclosure auction to protect their interest.
Doesn't seem fair, there's no REAL buyer making the bid..
Originally posted by @David Dachtera:
Even e-Bay has a similar feature. I believe they call it "proxy bidding". You enter your maximum bid, but the item only shows a current bid which may or may not be your maximum. When some one bids higher than the current bid, if the system can re-bid for you at or below your maximum, it will. See the explanation on eBay to learn how it works.
The RE Auction sites use something similar.
Hey Dave, I thought the proxy bid was the maximum I want to offer on a particular item??!!, That seems fair as long as I'm a legit buyer. What I'm seeing with auction.com is the company can bid on behalf of the seller, but the company has no intention on buying. My thoughts were from a legal standpoint: The intent can be the determination between crimes ie. 1st degree/2nd degree crimes... But, perhaps we can let the feds figure that out.....
I completely agree Kris. Someone is just "boosting" the bids up with no intention of buying.
Originally posted by @Kris Haskins:
Originally posted by @Wayne Brooks:
Perfectly legal.....just like the bank bidding at the actual foreclosure auction to protect their interest.
Doesn't seem fair, there's no REAL buyer making the bid..
Actually, yes, there is - YOU!
You enter your MAXIMUM bid. That is, "I'm willing to pay up to this amount, but if I can get it cheaper, great!"
THAT is what the proxy bid thing is all about.
Originally posted by @Kris Haskins:
Originally posted by @David Dachtera:Even e-Bay has a similar feature. I believe they call it "proxy bidding". You enter your maximum bid, but the item only shows a current bid which may or may not be your maximum. When some one bids higher than the current bid, if the system can re-bid for you at or below your maximum, it will. See the explanation on eBay to learn how it works.
The RE Auction sites use something similar.
Hey Dave, I thought the proxy bid was the maximum I want to offer on a particular item??!!, That seems fair as long as I'm a legit buyer. What I'm seeing with auction.com is the company can bid on behalf of the seller, but the company has no intention on buying. My thoughts were from a legal standpoint: The intent can be the determination between crimes ie. 1st degree/2nd degree crimes... But, perhaps we can let the feds figure that out.....
Perhaps the site's explanation is just badly worded.
"Legally" might be a tough argument. Your use of the site implies your acceptance of the terms and conditions of the site and your agreement to abide by them.
Yea always felt auction.com was bit unethical. I loved a property on there with a great price. However after reading about how their system worked, I thought it was unethical for to bid against me. Its like going to a car auction and the auctioneer is bidding against you.
They recently updated the wording re: the counter bid.
The problem seems to begin with the fact that they don't always publish the reserve. If you knew the reserve in advance you'd know the minimum the bank has set for the property to unload it. What the folks at Auction are doing is representing the bank and trying to get you to get to the reserve amount. I've found that if you set a proxy bid before the auction starts, the system will issue a counter bid until it gets to your maximum and if there is no other "live" bidder. If you're bidding against someone else, the counter seems to come in when the live bidders reach a point of inactivity but still have not reached the reserve set by the bank.
Good luck.
Ive, never bought a home from, them...i dont want to mention that companies name, i became acquainted with, and employ that used to work there.....he basically said in so many words...."Stay away"
Great info and insight. Does anyone have experience with xome.com?