Online Auctions?

[David Stefanovic]

What are people's experience with online auctions, specifically with auction.com? What are some of the things that I need to be aware of when placing a bid on a property that is being auctioned off online? My biggest concern is whether or not title on these foreclosed properties have any liens that would transfer over to me if I were to win a bid on a property.

[Brian Burke]

@David Stefanovic, you need to read the terms and conditions of the specific auction you intend to bid on. Terms vary from site to site and from auction to auction on the same site. You want to pay close attention to how title will be conveyed to you.

If you will receive a warranty deed or grant deed you'll likely be receiving clean title. In some auctions you can even purchase title insurance.  If you are to receive title via quitclaim deed, the title is whatever it is and it is up to you to determine if there are any liens that will survive the sale. This task can range from simple to extremely complex and shouldn't be taken lightly.

As for your question as to what you need to be aware of...what you need to know is that these online auctions aren't auctions at all.  An auction is where an opening bid is set and then the highest bidder gets the property. That isn't what happens here.

The auction company will be bidding against you until you drop out of the auction.  If you were the highest "legitimate" bidder, the auction company will call you after the auction is over and tell you that the high bidder dropped out and you were the second-highest bidder so they are moving on to you.  They will then submit your bid to the seller to see if they want to accept it, which they may or may not, or they might counter you at a higher price. The auction was just a method to fish out your max bid and get you to submit an offer that is binding on you but not the seller.