Columbus, OH · Member since 2017 · 7 posts · 7 votes
9y
I'm a broker and have sold a few deals for clients on the site, but not at my recommendation because I believe a 'standard' marketing campaign is more beneficial to the highest price and finding the best buyer. It's not that it isn't a good platform for selling, but there are so many little things that I feel hinder the buyer pool. Each buyer must register, provide proof of funds, and place a deposit (can be done in the form of a credit/debit card hold) in order to bid on the property - These rules I don't mind and think they show the seriousness of a buyer. And I will say, out of the dozen deals I've been involved with on the site, we've had decent success, just a limited buyer pool in comparison to a typical marketing (read the reason's below). If the broker you hire to run the deal along side auction.com knows his market and who to call, you'll do just fine.
What I dislike a lot about the process is four things:
1) I dislike the bidding process on this site because ten-x (auction.com) can bid the property up themselves - and yes, it's stated in the terms when you register so it's okay for them to do so. So not only are you bidding against potential investors but the auction site has the ability to bid up the price to meet the reserve.
2) Each buyer has to pay a $50K premium/"transaction fee" or 5% of the purchase price upon closing- whichever is higher. Just an extra charge that could keep a buyer from being able to go a bit higher in pricing because they know they have that additional charge to take into account. For example, we recently sold a deal for a client on the site and the buyer's final bid was $1.3M but they had to actually pay $1.365M at closing.
3) The terms/contract process can be very difficult for first time buyers or people with less experience. If you are the winning bidder, there is NO NEGOTIATION over contract length, contract terms, etc. Once the auction closes, you have 24 hours to sign their contract, start the process, and close within 30 days.
4) Lastly, i dislike this platform because buyers must pay cash only for any property they purchase on the site. There is virtually no time to arrange financing in a 30 day close. Although the buyers know what they're getting into, the issue is that not everyone has the ability to buy all cash. Lots of people have the 20-25% down payment to purchase a property, but much less have the ability to pay 100% of the purchase price in cash. Thus my biggest gripe with selling on auction.com, it cuts your buyer pool down substantially.
Hope this helped! Feel free to message me with any questions
Real Estate Investor · Raleigh, NC · Member since 2012 · 427 posts · 297 votes
9y
Lets just say I have probably had 6 figures worth of 2,500 deposits charged and then refunded bidding on a certain type of asset on there and every single time I have been outbid in the last hour. After the 20th time the property appeared again after the first auction I quit going on it.
At one point I was doing so many bids I had 2 credit cards I only used for auction.com deposits. Never won a single property. Was the higher bidder until the last 2 hours on at least 75% of the properties.
One of their reps was at our REIA and I asked if the bank or other parties with an interest in a higher sales price could bid and did not get a straight answer. I never logged on again
Investor · Richmond, VA · Member since 2016 · 1k+ posts · 2k+ votes
9y
If you search BP for "Auction.com" there are a few great threads on it. I use it and got a great deal on a house, however the buying process isn't fun. Their closing team is horrible, and very poorly managed. It's a stressful process, but the deal was great!
Investor · Denver, CO · Member since 2016 · 736 posts · 582 votes
9y
Yes. I bought a 2/1 in Fort Morgan, CO through them for $22,500. Rehab should be complete in the next couple of weeks (waiting for cabinets). It will rent for $650/700 month. I bought a 3/2 and a 2/1 in Evansville, Indiana. The 2/1 is available to rent - paid $7,001 for it, fixed windows, replaced stolen air conditioner, paint, cleaning, and minor items. About $15,000 total into it. It's available for rent at $600/month. Second house I paid $4,000 for and am working on rehab. Hoping to have it ready by June 30.
Columbus, OH · Member since 2017 · 7 posts · 7 votes
9y
I'm a broker and have sold a few deals for clients on the site, but not at my recommendation because I believe a 'standard' marketing campaign is more beneficial to the highest price and finding the best buyer. It's not that it isn't a good platform for selling, but there are so many little things that I feel hinder the buyer pool. Each buyer must register, provide proof of funds, and place a deposit (can be done in the form of a credit/debit card hold) in order to bid on the property - These rules I don't mind and think they show the seriousness of a buyer. And I will say, out of the dozen deals I've been involved with on the site, we've had decent success, just a limited buyer pool in comparison to a typical marketing (read the reason's below). If the broker you hire to run the deal along side auction.com knows his market and who to call, you'll do just fine.
What I dislike a lot about the process is four things:
1) I dislike the bidding process on this site because ten-x (auction.com) can bid the property up themselves - and yes, it's stated in the terms when you register so it's okay for them to do so. So not only are you bidding against potential investors but the auction site has the ability to bid up the price to meet the reserve.
2) Each buyer has to pay a $50K premium/"transaction fee" or 5% of the purchase price upon closing- whichever is higher. Just an extra charge that could keep a buyer from being able to go a bit higher in pricing because they know they have that additional charge to take into account. For example, we recently sold a deal for a client on the site and the buyer's final bid was $1.3M but they had to actually pay $1.365M at closing.
3) The terms/contract process can be very difficult for first time buyers or people with less experience. If you are the winning bidder, there is NO NEGOTIATION over contract length, contract terms, etc. Once the auction closes, you have 24 hours to sign their contract, start the process, and close within 30 days.
4) Lastly, i dislike this platform because buyers must pay cash only for any property they purchase on the site. There is virtually no time to arrange financing in a 30 day close. Although the buyers know what they're getting into, the issue is that not everyone has the ability to buy all cash. Lots of people have the 20-25% down payment to purchase a property, but much less have the ability to pay 100% of the purchase price in cash. Thus my biggest gripe with selling on auction.com, it cuts your buyer pool down substantially.
Hope this helped! Feel free to message me with any questions
"1) I dislike the bidding process on this site because ten-x (auction.com) can bid the property up themselves - and yes, it's stated in the terms when you register so it's okay for them to do so. So not only are you bidding against potential investors but the auction site has the ability to bid up the price to meet the reserve."
I friggen knew it. That should be illegal. They could technically bid it up to increase their commission due to getting 5% of the final sales price.
Investor · Orange County, CA · Member since 2016 · 38 posts · 7 votes
9y
Great site, you just need to know how to use it. I've closed 12 assets, there is def a methodology. My biggest piece of advise would be to focus on your ROI and not acquiring a "house". I see a lot of people that go through home heart break just because they start thinking as if they were buying a home.
Investor · Denver, CO · Member since 2016 · 736 posts · 582 votes
9y
Eric F. They do this to meet reserve prices set by the banks. Likely the properties you bid on had reserves set that didn't hit the target. This is in the terms as well.
Occasionally they have no reserve auctions as well as pre-bid offers you can make where this isn't an issue.
My only bad experience is with my $4,000 home- it was a Fannie Mae Homepath Property. It was not disclosed to me until closing that the recorded title would have a stipulation that I could not sell or take a lien out on the property for more than $6,600 for the first 90 days after the recording of the title. That 90 days is up Feb. 10. ARV on the property is about $60k so I have no problem making small improvements with time then taking a loan on it after the date that stipulation expires.
Columbus, OH · Member since 2017 · 7 posts · 7 votes
9y
@Eric F. Yes but if they bid it too high and they are the final bidder they are S.O.L. And when that happens they have to go back to the next highest bidder and ask if they're interested in their most recent highest price. Had that happen too, the buyer usually comes back thought.
Investor · Princeton, TX · Member since 2014 · 1k+ posts · 1k+ votes
9y
@Paul Flynn I stopped bidding on any site that using a reserve system. I consider it them being willing to waste my time. While I might chose to waste a huge amount of my time, I do not give that option to others.
Flipper/Rehabber · Allentown, PA · Member since 2011 · 1k+ posts · 701 votes
9y
@Account Closed
Ed, that's just not true about your HomePath purchase. The contract specifically states there will be a deed restriction. It's on page 5 of the Fannie Mae Purchase Addendum. You might have missed it, but you signed a contract that stated it.
Investor · Denver, CO · Member since 2016 · 736 posts · 582 votes
9y
@Mark Gallagher Going to disagree with you Mark. I just went through all 24 pages of documents associated with the purchase. I was provided a HUD 1 and Wire Instructions (and wired the money) before I was provided with ANY other documents. I was never provided with a Fannie Mae Purchase Addendum - I found out by reading a copy of the quitclaim deed provided to me at closing.
While there was a lead disclosure and Indiana REO disclosure on the auction listing, there was no other document indicating anything otherwise. I didn't even know Fannie Mae was the seller until I asked to get title insurance...and was told by the closing company that I couldn't...and it was because Fannie Mae was the seller.
All other documents were provided at closing. As I stated - it wasn't disclosed to me until closing.
Investor · Columbia, MO · Member since 2015 · 27 posts · 25 votes
9y
The first home I tried to purchase went well with them. I'd agree, getting to closing was a pain, and I had to buy the house without being able to view inside, so I bid accordingly. It was still full of previous owners stuff. I was very pleased overall.
Since then I've probably tried to purchase 15 different homes and they all get bid up beyond what anyone would pay for them and are back on the site within a week or two. One in particular did this probably 8 times. I finally got an email saying the owner was going to consider all best offers on the last auction. I was the only bidder other than the bank and still never got a call. It's back on now. I've about given up using them in my area.
Flipper/Rehabber · Allentown, PA · Member since 2011 · 1k+ posts · 701 votes
9y
@Account Closed
Read your contract that you signed to purchase the property. It's on page 5 of the addendum. It's not related to closing documents other than the deed.
Investor · Cincinnati, OH · Member since 2012 · 506 posts · 331 votes
9y
auction.com is like any other platform for selling houses. Sometimes there are good deals but most of the time there aren't, at least in my area. Over the last 3 years, I've bought over 50 houses from the site so I'm pretty familiar with how to spot a house that will likely trade vs. one that won't. If you can figure that out, you'll save a lot of hassle and frustration.
If the seller won't sell for less than reserve, I don't see a reason to get made if auction.com bids against you. They'll never make the bid that meets reserve, so you aren't losing anything through their participation.
Real Estate Agent · Chicago, IL · Member since 2016 · 283 posts · 71 votes
9y
Mostly good experiences with it. Many of the properties are occupied and for the ones that are online bidding only the reserve prices tend to be pretty high. It also shows a list of judicial foreclosure live auctions so it is helpful
Lender · Fort Collins, CO · Member since 2015 · 304 posts · 148 votes
9y
I've had one client use auction.com and I wasn't a fan. There are other, smaller auction companies out there that are fantastic, they'll just have less inventory. My favorite so far is Hudson & Marshall. Great customer service.
Investor · Grapevine, TX · Member since 2014 · 88 posts · 75 votes
9y
I've purchased from auction.com and Hudson and Marshall. I found Hudson and Marshall to be very professional, helpful and easy to work with, but no so with auction.com.
Investor · Silver Spring, MD · Member since 2015 · 25 posts · 7 votes
9y
I've purchased from Auction.com and Hubzu. Some of Auction.com reps do not know what they were doing, and EXTREMELY difficult to work with when things need little extra attention. I strongly recommend to do the title search yourself (I mean your title co), and get a title insurance. They only provide a quit claim deed or equivalent. And "quit claim deed" isn't much of anything.
I have heard some horrible story about using Auction.com when it comes to problem with a title/deed situations. I will be very careful before jumping into it blindly.