Any luck using online Auctions like Auction.com?

Question

I was recently looking at listed properties and came across a property that was listed at significantly less than the others in the area.  I looked further and the property is listed through Auction.com.

The property is 3 bedroom 2 bathroom 1/2 duplex and appears to be in decent shape and is in a strong school district.  The property is currently bidding for $11,5000 and I think the property could retail for around $65,000 with some work and rent for approximately $700 per month.

Does anybody have any experience with Auction.com, good or bad?

I'm assuming this it is like ebay and if the reserve is not met the property doesn't sell?

Who typically owns these properties?

Rob Gillespie · Answer

David,

I do not mess with them too much, but look up Sherry Lewis here on BP. She has been posting recently about a nightmare on two houses she picked up on line.

The pics on line and what she actually got were two totally different things.

I guess the disclosure that it was a 2 story house really meant "the story when you are bidding, and the story after you actually see what you bought!" LOL! :mrgreen:

Uwe S. · Answer

Sorry Jason, but that is not correct, all bidder are able to see if reserve price reaches or not, look just under starting bid.

-Uwe

Jason Mak · Answer

David...I came across the same on auction.com.  Here are stuff that I learned through reading other bigger pockets forums and browsing through the terms and conditions on auction.com

1.  The seller sets an reserve price which is not published on auction.com.  So even if you win the property, if it doesn't reach the reserve price you may not win the property
2.  If you win the auction, auction.com drafts a purchase agreement which is submitted to the seller.  This is when the contract is formed...not when you are actually bidding for it.  If the price is too low, the seller may reject the contract.
3.  5% buyers premium - the buyer pays a 5% commission to auction.com as well as any closing cost (escrow, title, etc...)

Those are some of the key things that I had to dig a little deeper and read in the fine print.  If anyone can add anymore or correct my mistakes that would be greatly appreciated.