REDC-Auction.com- Any words of caution?

Question

I'm looking a property on auction.com/REDC and it is an online bidding auction only.
I have done my due diligence, know what I want to pay, know its an "as is" sale but does come with clean title.
My question: Is there anything I should be aware about the way they conduct their business/contracts that might be shady or put the buyer in an unfair position?

I know the prices tend to be high but I'll make my offer and call it a day, I just don't want to get caught because I missed something in the fine print.
If I "win", I would have my atty look at it anyway.

Thanks for looking.

E. G. · Answer

Auction.com is awesome. Just do your homework, be prepared and know what you are willing to pay and you will be fine. The process is really streamlined, the info on the website is pretty thorough and the bidding assistants online and at the live events are pretty helpful. Good luck

Steve R. · Answer

Thanks for the replies.
60-65% is good to know.
Their prices are very inflated but I'll make my offer and carry on.

Tammy R. · Answer

The only  way out of an REDC auction is if there are environmental hazards or it is declared condemned.  Keep that in mind when bidding.

I successfully won an REDC auction property for 190K, pd 199K with the 5% fee, fixed it up for 11K and it appraises for $330K ARV as of this month.  :)  Not too shabby. :)  As always, due diligence is a MUST!

J Scott · Answer

Keep in mind that REDC is basically just a glorified lead generation system, and not an absolute auction.  In other words, if you have the high bid, you're not guaranteed to get the property; instead, your bid will be submitted to the asset manager, who in turn can accept it, reject it or counter it.

In my experience (and from speaking to other investors), about 50% of REDC bids are accepted by the asset manager, with the maximum discount off of list price at about 60-65% (anything less is almost always rejected or countered).

Of course, your mileage may vary...

Steve L. · Answer

You will be fine, just make sure you factor in the Buyer's premium.

I know plenty of investors who have purchased lots of REDC properties and resold/rented them profitably.  There are deals, they just take work to find.