Auction.com in Connecticut

Foreclosures
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Auction.com in Connecticut

Jason Richards
New Haven County, CT · Member since 2019 · 27 posts · 17 votes

I just sold my home and found a great fixer-upper but it turns out it’s on Auction.com and the auction starts in 3 days.  This is intended to be my primary residence but they will only accept a cash offer.  I’m okay with that since I can find some private money.  However, I don’t know what the process is for an online auction. The selling realtor told my realtor that it’s sealed bids.  Does this mean that anyone can submit a bid and when it’s over the highest bid wins? Or is it like eBay where the highest bid is showing?  I would like to get an idea of how the process goes so that I can prepare for the auction. Also, if I go to the town assessors office and do a title search, will that show me all of the lines on the property?  Can I then safely assume that there are no more encumbrances on the property if nothing but the first mortgage is showing?  Any help in understanding the process, especially as it goes in Connecticut would be appreciated.

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Jeff Bridges
Investor · Hyattsville, MD · Member since 2012 · 822 posts · 441 votes
7y

You need to provide proof of your cash offer within 24 hours. I believe that means they expect you to show a bank account with enough funds in it and/or authorization letter for you to receive those funds. There will be no funny business about some promise from someone else to get you the money or they will cancel the deal if you are the winning bid. I recommend calling customer service so you know exactly what POF they will require if you are winning bid.

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  • Jeff Bridges
    Investor · Hyattsville, MD · Member since 2012 · 822 posts · 441 votes
    7y

    Auction.com is not for the faint of heart. They have foreclosure "auctions' which are wild west and dont guarantee there are no other liens or other issues with the title. Then they have real estate owned foreclosure sale listings which state if they will provide title insurance. I only bid on those because I can look at the title history in the docs section and know that they are required to give me a clear title as a condition of the auction sale. With regular auction, they dont have to provide the guarante and nothing short of title insurance will guarantee that you have some encumberance that you havent been aware of. They have a reserve price that is usually at or near the foreclosure price when they reposessed. You can research that in the deed history if CT has online records that you can access to find that price out (or zillow.com might show that foreclosure price (pre-listing) as well). They will then give a teaser initial listing price and then their computer automatically bids it up incrementally to the reserve price (to make you think there are other bidders competing with you). Once it reaches the reserve price, then the computer stops bidding and its only live human bidders that you will be competing against. Decide your MAO beforehand and dont get caught up with the irrational exuberance. Know that these properties usually end up being auctioned 3-4 times before someone actually settles on in because the property gets bid up too high and the seller backs out realizing their mistake. Don't use their recommended title company and instead use your own selected title company to make sure they don't screw up the title paperwork and research. It will cost you a little more but their firms dont want to disrupt closings and might cut corners in order to get a deal done quickly. This is not CT specific, just auction.com specific. FYI

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  • Jeff Bridges
    Investor · Hyattsville, MD · Member since 2012 · 822 posts · 441 votes
    7y

    You need to provide proof of your cash offer within 24 hours. I believe that means they expect you to show a bank account with enough funds in it and/or authorization letter for you to receive those funds. There will be no funny business about some promise from someone else to get you the money or they will cancel the deal if you are the winning bid. I recommend calling customer service so you know exactly what POF they will require if you are winning bid.

    2Reply
  • Lynnette E.
    Rental Property Investor · TN · Member since 2018 · 2k+ posts · 2k+ votes
    7y

    The bid you put in is not closed, but the bid is posted on line.  They will bid against you.  So if you put in a bid of say $100k and the reserve is $120k, they will bid against you to over $100k, but below $120k.  This is to make you bid that $120k they want.  I just put in the max I will pay, let them bid against me.  Then I can figure out where their reserve price it.  It will be a little above where they stop bidding.  A week later they will relist and I bid again what I want, one time, and just wait until their reserve gets closer to what I will pay.

    Don't put in a small bid and then bid when you are out bid.  Its just a waste of time.  You are bidding against auction.com's computer.

    And you might lose to a real bidder.  Occasionally someone comes on and bids full price on a foreclosure that is occupied and needs major work.  Best to them!

    1Reply
  • Sin Hang Lai
    Investor · Norwalk, CT · Member since 2019 · 20 posts · 9 votes
    7y

    Hi, I have been monitoring some auctions on the site for fun. I echo all the previous comments. One thing I want to add is that towards the end of an auction, I think if either the bid price is near the reserve OR the bid price already met the reserve, Auction.com will decrease the increment amount to encourage more bidding. Also, if there is a bid within a certain amount of time before the end of the auction, the platform will also extend the auction ... obviously to encourage more bids. Good luck.

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  • James McGovern
    Member since 2020 · 69 posts · 15 votes
    5y

    @Sin Hang Lai or @Jason Richards Have either of you won a bid on auction.com? Was your attorney familiar or did they need to come up to speed? How would you describe the experience?

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  • Sin Hang Lai
    Investor · Norwalk, CT · Member since 2019 · 20 posts · 9 votes
    5y

    @James McGovern Sorry I've never actually made a bid on auction.com. 

    1Reply
  • Jeff Riewer
    Member since 2020 · 16 posts · 8 votes
    5y

    @Sin Hang Lai...Also...I just won a property where I was the high bidder but the reserve wasn't met...After the auction ended the bank agreed to my bid and I won the auction even though the reserve wasn't met...So be patient and see what happens...

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  • Sin Hang Lai
    Investor · Norwalk, CT · Member since 2019 · 20 posts · 9 votes
    5y

    @Jeff Riewer  ... are you saying that was on Auction.com? 

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