Homesearch and Preauction Offer for Foreclosure

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Homesearch and Preauction Offer for Foreclosure

Taylor Ernster
Sioux Falls, SD · Member since 2015 · 15 posts · 0 votes

Has anyone successfully submitted a pre-auction foreclosure offer to homesearch and won? I would like to submit an offer at my max price and hopefully get it under contract before it hits auction but I have 2 questions:

1. By me submitting my bid before it goes to auction and they accept it, does that end the auction or do they just keep that in their back pocket if the auction doesn't reach that high? Is it a smart idea to do this or just wait it out for the auction. I am worried someone else could do a pre-offer too and scoop it up first.

2. They have a very good idea of what I am willing to pay for it and therefore may not agree to the offer and anticipate me paying at least that much when it goes to auction. They would have even more information on my bidding strategy while I would just have a rejected offer. 

I have spent the last years hours browsing bigger pockets about homesearch and have about read it all and have not seen much discussion regarding the pre-auction offers.

Thanks,
Taylor

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  • Chad U.
    Investor · Boca Raton, FL · Member since 2012 · 1k+ posts · 1k+ votes
    10y

    @Taylor Ernster

    If ever there is an option to submit a pre-auction offer for an online auction, whether it be homesearch, hubzu, auction.com, etc, go for it.   If your max price offer is higher than the reserve price set by the seller, then they will pull it from auction and negotiate the deal direct with you.  This cuts out the competitive bidding situation, and reduces potentially days or weeks of painstaking rounds of bidding.   I wouldn't worry if they know your "bidding strategy", it's just a number and since there are no contingencies anyways, price is what dictates whether you win or not.  

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  • Rob Tarsio
    Investor · Lindenhurst, NY · Member since 2016 · 8 posts · 0 votes
    10y

    I just closed on a home from homeseach.com and submitted numerous offers pre auction which were declined.   I participated in 8 auctions over 10 months of the property and never met the reserve. 

    i Won the final auction which never reached the reserve price.   The auction ended on a Friday and I had an email on Monday morning that my offer was accepted .  

    My advice,   Before you participate, do your own searches for liens, unpaid taxes , & unpaid water bills ,etc.   

    the contract was so 1 sided and the seller pays for nothing.  

    I had the contract in my inbox Monday afternoon and had 24 hours to sign it.   Then48 hours after that, I had to send a deposit. 

    Be careful . 

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  • Taylor Ernster
    OP
    Sioux Falls, SD · Member since 2015 · 15 posts · 0 votes
    10y

    @Rob Tarsio

    You went after the same property through 8 different auctions? Wow, talk about persistence! Way to go and I hope it all worked out for you!

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  • Rob Tarsio
    Investor · Lindenhurst, NY · Member since 2016 · 8 posts · 0 votes
    10y

    @Taylor Ernster

    I got the house about 40% off the value in the area and the location was prime.    it really was a steal.  I plan on renovating and moving in later on this year. 

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  • Gautam P.
    Real Estate Investor · Franklin, NJ · Member since 2014 · 21 posts · 1 vote
    10y
    Originally posted by @Rob Tarsio:

    I just closed on a home from homeseach.com and submitted numerous offers pre auction which were declined.   I participated in 8 auctions over 10 months of the property and never met the reserve. 

    i Won the final auction which never reached the reserve price.   The auction ended on a Friday and I had an email on Monday morning that my offer was accepted .  

    My advice,   Before you participate, do your own searches for liens, unpaid taxes , & unpaid water bills ,etc.   

    the contract was so 1 sided and the seller pays for nothing.  

    I had the contract in my inbox Monday afternoon and had 24 hours to sign it.   Then48 hours after that, I had to send a deposit. 

    Be careful . 

    Can you please provide some guidelines about what can wrong with REO from homesearch or auction.com I understand these are foreclosed property with all the junior liens and all judgement wiped out , am I safe to assume that ? Because these are owned by bank I assume they are uptodate with taxes and utility bills.

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  • Rob Tarsio
    Investor · Lindenhurst, NY · Member since 2016 · 8 posts · 0 votes
    10y

    My advise is to do your homework before bidding.  

    Home search will give you some sort of deed like a special warranty deed which covers you from the time they took back the property.    In my case, that was 3 months.   

    On my property, the former owner was receiving a veterans credit on taxes and the bank was paying the veterans credit amount after they took back the property.    In the end, there was a $1400 tax bill that I had to pay.    Not a big deal for me as I still wanted the property.  

    I've read about major unpaid water bills, homeowner association fees, sewer bills all coming up on REO properties.

    Also, I bought my house "site-unseen" as it was an occupied property.  

    You need to take all these things into consideration when bidding, so have your highest bid when submitting and I recommend don't get caught up in the bidding process .    They are just trying to get the most money out of the sale. 

    And don't forget their "buyers premium" fee.   

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  • Jonathan Drago
    Tampa, FL · Member since 2015 · 42 posts · 7 votes
    10y

    From my experience, I've found that Homesearch.com has the "Buyer's Premium" fee tacked on for the majority of their auctions. They sometimes run specials with "No Buyer's Premium" but not often.  It's typically 5% of your winning bid price and not negotiable. Also note that when you win the auction (or they accept your pre-auction offer) you will owe an earnest money deposit equal to 3% of THE SUM of your purchase price + buyer's premium OR $3000, whichever is higher. That deposit will go toward the total cost in the end, but be sure that you add on the buyer's premium to your purchase price before submitting your 3%, and submit on time, so you don't go into "default."  My advice is to thoroughly read all disclosures, event agreements, and e-signature information prior to bidding. It is very one sided in favor of the seller/auctioneer, and there are many ways you can trip up and they can terminate your contract for being in "default" and they keep your earnest deposit, based on the verbiage of the bid contract. This info is solely based on my research. Definitely do your own to satisfy your hesitations before purchasing.   Hope it helps!

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