Happy Wednesday All!
I am new to real estate investing, but now new to Bigger Pockets; however, I did just find my way out of my "hole of fear" and decided to get back into learning and doing. Love Love this site and have learned a lot... blogs, podcasts, webinars, etc. I have found an interest in wholesale and forclosures. Strange combo Im sure lol, but that is where I am at this time.
Anyway, enough about my boring story ;) and to my question (which I have many). I recently ran across Auction.com. What are your thoughts or opions about this site... positive or negative.
Thanks so much for your time!
Hey @Samantha Lotti
Auction.com can be a good source for deals... like always it depends on the property.
Some may be occupied, some may be cash only. Most will be "as is" ... a bit more risky if you're just getting started
@John B. Thank you so much for your reply. Yeah, I totally get the risk and am not ready to do anything too risky just yet. lol So I was just curious if they were something legit and usable. I have not done a lot of research on them, but wanted to get some opinions before I do. Again, thank you so much for your input John. All input is welcome! :)
@Samantha Lotti I use auction.com some when I am looking at upcoming foreclosures. The big thing to watch out for is their title information. Don't trust it. I am sure they are getting everything that can from some kind of public record search, but I always get an attorney to do a title search for me. I would never bid at the courthouse without having a legal opinion beforehand. Sometimes the foreclosure will wipe out all other leans, but sometimes you will be left holding the bag. Those laws vary by state, so build a relationship with someone local and get those searches done on the front side.
One other thing I found is that real estate attorneys will often get calls from investors wanting a title search and then when the search comes back negative, the investor vanishes without paying. I started a relationship locally by actually going to the attorney's office (one that we had used in previous closings) and prepaying the first couple of searches. Now I can just shoot an email and the search gets underway while I process the check through my bank's bill pay. But that wouldn't have worked early on. Just be aware that some offices will be wary of running a search because of being burned in the past.
@Samantha Lotti So people can find deals but it’s really not for me. They (auction.com) will bid against you in an effort to reach the reserve. Some are no-reserve but most have a reserve, or need approval, etc. Consequently, I’m no longer bidding against a free market, in bidding against a reserve and a bank approval. That’s not 100% bad, they tell you then do it, but you should know it going in. And, of course, you have a nominal earnest money deposit with deals that have a low likelihood of coming to fruition. But don’t take my word for it, search the forums, people do have success with it and specific tactics they use to find success.
I have only used them to research properties coming up for live auction at trustee sale in my area (Phx, AZ). I have had great experiences! They have good title reports and info online. Their live presence is great too. The auctions go smoothly and it is a clear process.
The one thing I have noticed when looking at other states for purchases is that the properties can be priced high to start, and often times revert back to the bank and are then sold as REOs. I have come across alot of those failed listings on the REO market when doing my research on the property, and finding that it had a previous auction.com listing. This may because the reserve was set too high by the bank (which wouldn't be auction.com's fault). Many times banks set a price equal to what is owed, and if that is higher than the foreclosure market price, no one will bid on it. That isn't exclusive to auction.com. That happens even in a live auction. BUT what it means is that you just need to know the market, and pricing. You don't want to bid on a property that is already too high for you to turn around and wholesale.
The comment made about them bidding against you, I want to clarify a little bit. As I just mentioned, a reserve is set by the bank. Sometimes the starting bid is lower than the reserve, so as bids come in, auction.com can move up the bid. What they are doing, is bidding on behalf of the lender who holds the note. So, it may raise an eyebrow, but there's nothing sorted about it. They explain this at the live auction before it starts.
Overall, my expierence with them was great at the live auction that they conducted. As far as the online auctions, I would just do your research to make sure you know EXACTLY what you are getting.
Auction.com isn’t necessarily bidding against you. They are merely starting the auction below the upset price: 1) to generate interest and 2)so the bank has an idea of what people are willing to pay for the property if the price isn’t met
Once that upset price is Reachex there is no bidding on behalf of the site.
I met a guy at an auction.com event two weeks ago who was complaining that he had bid on 30 properties and not won any of them.
I asked him how many properties he bids normally and wins?
Thank you all for responding! :) I is great to get opinions for different angles.
@Mick Donahue please correct me if I'm wrong, but can't a person just go to the Courthouse and ask them to do a lien search on a given property? I have done a search in the past on a property, but not sure if I may be missing something.
@Cara Lonsdale I am interested in seeing it live, so I may just go by the property on the auction date and check it out. I will do my due diligence and numbers and go see how it all goes down. :)
@David Weintraub Sounds like I need to read further into their rules. I did not realize the bids start prior to the live auction.... or did I misunderstand you?
on the online auction, it starts and then it ends. Not sure what you're asking. Sorry :-/
@Samantha Lotti Yes. You can get the lien records from the register of deeds. I have done it both ways (myself and paid). The lawyers always have a more detailed report and I worry that I will miss something. For me, it comes down to what the best use of my time is. Most of the time I would rather pay an expert to give me a better report than spend a morning researching. That being said, you sure learn a lot going through the registry.
Don't forget that you need to check both the register of deeds and civil judgements on all parties on the deed. Also any assumed names. I had one deal that the guy had a DBA. Someone sued him as his DBA and his house was attached to the lawsuit. It wasn't at the register of deeds but in the civil file. And it wasn't in his name, but his company's.
@David Weintraub thank you for your reply. You explained it just fine to me, I just asked my question in a confusing way. lol Its all good though... thank you!
@Mick Donahue All great information that you have shared with me on this. Makes sense to cover all avenues and I appreciate your time. I took a snapshot on my phone to refer back to it. :) Great info!