Experience with Auction.com

13 Replies

Hi All!

Anyone out there have experience with auction.com? If so, do you feel like you still get a good deal or do most houses end up going for market price since you are competing with other investors?

My husband and I found an awesome deal and were confirmed to view the property, which was listed on MLS. Immediately after seeing the property, we wanted to submit an offer but our agent realized that we can only submit through auction.com, which requires an immediate hold on your credit card.

We don't know why the seller's realtor let us in if the property is on auction, but either way we are very interested, but don't know if it's worth it to go through the auction.com process.

I welcome any tips and advice. We are trying to get our first rehab, but it's like a ratrace out here in central NJ!

Some auction properties have interior access so I would not be surprised that you had a showing. Others are trickier and even sell with the tenants inside of it. 

The credit card is to hold an x amount of deposit - usually 5% of it as cash reserves for the auction. That % goes in as deposit for the deal and to pay the agent fees. If you do not win, it will get refunded back to you.

Do you have an agent that's representing you in this? If you don't you should really get one who has done this before so you know where to go and what are the parameters of the sale. There's a lot of nuances that will not be disclosed to you unless you have an agent. Going with the seller's agent will provide a disservice to you as they do not have an obligation to disclose everything to you. Also be advised that auction properties do not have to have clear title and are sold as - is.

Years ago I represented several REO's that were being handled by Auction.com. We were required to hold the properties open on certain dates and times so that Buyers could see the properties. ( I wouldn't call it an inspection period but many of the potential Buyers brought Contractors with them )

The properties that I handled were all vacant and were all being sold in “ As Is “ condition. I also recall that a  5% Buyer’s premium was added to the final purchase price.

Last, it didn't happen often to me but I was aware of several REO Agents that had deals fall through. Whether the Buyer felt they paid too much or discovered too many repairs is u known.

Cheers, Winston R. Covington








@Lien Vuong Thank you! That makes sense! We are working with a realtor that is new to the business. She doesn't know much about auctions, buy is willing to learn, but from what you are saying I don't HAVE to have a realtor to make bids, right?

@Winston Covington thank you for your response! I do know that the homes are sold as is. I figured buying rehab homes from an auction, puts us in the same boat as other homes that we have seen from MLS and need significant rehab, but are also sold as is. However, I know I'm not comfortable putting in a bid on a property that I haven't seen. We want to be sure that our numbers work.

At this point, my husband and I have been on the hunt but nothing is sticking. I figured we should try another avenue to acquire homes, but I want it to be worth it.

So let me know if I have this right:

-provide credit card to hold $2500, which will go to the deal

- 20% down (does this need to be paid the day of?)

- purchase price

- 5% buyers fee

What else am I missing?

I know later I will have to add in rehab budget.

In my recent experience, auction.com houses rarely get sold because a high bidder fails to meet the reserve price.

@Jessica M.

Earlier this year I was the winning bidder on a local property auctioned by Action. Com. It was a reasonable property and at about a 20/25% discount of market. However as the deal processed I was informed that the property would be transferred to me by way of a "Quick Claim Deed". I was cautioned by local advisors that this was not good in Tx. and that I could possibly be responsible for claims, judgements or Liens on the property. I ask Action to let me use my local title Co, to do a title search and give me at least a warrantee title with title insurance. They declined, several times and we were unable to work though it so I walked on the deal. Auction.com refunded my deposit and to this day still sends me notices about current auctions which I find interesting, but I don't feel comfortable with a quick claim deed. I believe there are some deal to be had there though.

Good Luck, Rick

Originally posted by @Richard Gray :

@Jessica M.

Earlier this year I was the winning bidder on a local property auctioned by Action. Com. It was a reasonable property and at about a 20/25% discount of market. However as the deal processed I was informed that the property would be transferred to me by way of a “Quick Claim Deed”. I was cautioned by local advisors that this was not good in Tx. and that I could possibly be responsible for claims, judgements or Liens on the property. I ask Action to let me use my local title Co, to do a title search and give me at least a warrantee title with title insurance. They declined, several times and we were unable to work though it so I walked on the deal. Auction.com refunded my deposit and to this day still sends me notices about current auctions which I find interesting, but I don’t feel comfortable with a quick claim deed. I believe there are some deal to be had there though.

Good Luck, Rick

 Wow! That's very helpful information! I wonder if all deeds are quick claim and what the limitations of that is in New Jersey. I'll have to do some research on it. So, since you stepped away from auction.com, what's the best way you've been finding properties?

Originally posted by @Richard Gray :

@Jessica M.

Earlier this year I was the winning bidder on a local property auctioned by Action. Com. It was a reasonable property and at about a 20/25% discount of market. However as the deal processed I was informed that the property would be transferred to me by way of a “Quick Claim Deed”. I was cautioned by local advisors that this was not good in Tx. and that I could possibly be responsible for claims, judgements or Liens on the property. I ask Action to let me use my local title Co, to do a title search and give me at least a warrantee title with title insurance. They declined, several times and we were unable to work though it so I walked on the deal. Auction.com refunded my deposit and to this day still sends me notices about current auctions which I find interesting, but I don’t feel comfortable with a quick claim deed. I believe there are some deal to be had there though.

Good Luck, Rick

 Wow! That's very helpful information! I wonder if all deeds are quick claim and what the limitations of that is in New Jersey. I'll have to do some research on it. So, since you stepped away from auction.com, what's the best way you've been finding properties?

Originally posted by @Martin Tyler :

@Jessica M this doesn’t help you now but I’ve had pretty good luck with tax lien auctions. A foreclosure auction on your courthouse front steps might be a good avenue as well. You can’t “go in” properties but you can go outside and get a pretty good idea of what you’re dealing with.

That's might be a great idea! Do you know how to get access to the list of properties that will be auctioned each particular week?