I was the highest (not winning) bidder on an online auction. Homesearch.com called the next day and said that my bid was "waay off the reserve price", so it must be forwarded to the bank for review. The representative wanted to know if this was my "final and best" offer. I said that I'll let them know tomorrow, after talking with my realtor and possibly an attorney. She said ok. The auction did seem a bit suspicious to me...it seemed like I was the only bidder (besides what seemed like straw bids from the auction house). Also, as the time between my bids became longer (I was reaching my pre-determined limit), the bid increment dropped from $7500 to $2500. Seemed like they were trying to get me to press that button one more time! Anyway, I'd like some opinions about what to do. Should I stand on my original price? Should I offer a few thousand more? It's a potentially very nice home, but needs a lot of work. If I give them much more, there is not a lot of room for profit on a flip. Has anyone stood on their original bid and had it accepted? Thanks.

Hi I am a rental investor, and recently purchased a foreclosure property (occupied by tenants), site unseen, for cash, on auction, on this site. Here are my comments. - The whole transaction was painless, and we closed within 2 weeks, and I used their closing attorney with no issues. - I was the high bidder, but the reserve was not met. They approached me to go higher, but I told them that I had reached the limit of what I was prepared to pay. It was a fair price, and they accepted. The price was in line with other comparable foreclosures in the area, and was also well below market value. It was also high risk because I could not see the inside of the property, do an inspection, and the property was still occupied. - I believe that I was bidding against a "ghost bidder". (offer/counter-offer) -The terms of the contract were all completely in their favor. My conclusion is that they are a legitimate site. They are offloading (mostly) foreclosed homes, and that they provide an easy way to directly negotiate price through a series or offers and counter-offers (bids). I have no complaints. However, buyer beware! If you are going to bid on this site, follow these guidelines: 1. Spend a lot of time doing your homework on the property. Know what it is worth, and what you are prepared to pay, including the risks, and any hidden surprises. 3. Make sure that they give you a Special Warranty Deed, not just a Quitclaim Deed. I queried this in the contract, and they said that it was a 'mistake', and changed it. 2. Decide how much you are prepared to pay, and don't go any higher. How much is the property worth to you, and how much can you afford? Do not budge from this. Avoid online auctions if you like to gamble, and can't resist putting in "just one more" bid. 3. Be sure to do a title search. I did a title search on one of their properties and came up with $15000 in liens against the property. I did my own manual title search and also paid for a title search on the property that I eventually purchased. Both came up clear. 4. Factor in the RISK when deciding your final price. If you have not seen inside the property, cannot do an inspection, and have tenants to deal with, than assume that you may not get access to the property for 4 months, and that the interior is a mess, and requires a complete renovation. What is it worth to you under these circumstances? Will you still come out ahead? 5. Bidding is very stressful. Try not to get emotionally attached to the outcome of the bidding process. You may not win this one. 6. Do not put another bid in immediately when you are out-outbid. The action will go into overtime if there is active bidding in the final hour and the reserve has not been met. Maybe there is no real reserve, and you are bidding against yourself. That is why it is important to know what you are prepared to pay. If your final offer is not a reasonable offer, they will not accept it. They have their ratios and targets to follow. 7. They will adjust the "bid increments" once they see that they have a serious bidder. Do not bid again if the larger increment pushes you beyond what you are prepared to pay. Wait it out. Watch the site and check to see if the increment comes down again. I am curious to know if anyone out there has ever reached the reserve price. Also, do they always call the highest bidder? Good luck! I hope this helped you. Sue

In another thread recently someone pointed out that on most of these auction sites (and I think HomeSearch was one the called out specifically) if you read all the terms they do basically say they reserve the right to put in BS bids on their properties to drive up the price. So that very well could be what was happening to you. Regardless of that issue... As far as paying more than your bid, that is up to you based on what you think it is worth. Sounds like you can't go up much and still make the profit you want. That sounds like the answer is stick with the original or go up a small amount that is still in the range you wanted to be in. In my past experience I have had this situation always happen where I have no met the reserve but have been the high bidder. I have had them just give it to me since they wanted to be rid of it. I have had them come back and say they needed more and since it was a good deal I did go up a little but still within my MAO. I have also had some come back and said I didn't meet the minimum and give me a price they are willing to sell for and I declined as it was way more than I ever would have considered bidding. All that is just to say that there is noway to really know what they will do. You might say "No my bid was my highest and best" and they give it to you or you might go up past where you should and they still might not feel it is enough. Good luck but my advice is no deal is better than a crappy one, so don't overpay.

@Andrew Spelman If you are still looking for homesearch.com experiences here is a post I did about mine... http://www.biggerpockets.com/forums/41/topics/1459... And here was our result... http://www.biggerpockets.com/forums/223/topics/167... I hope yours turns out the same or better. Good luck!

Hi Stacey, First, try to relax a little bit. I know it's easy to assume that REO companies are out to get you, but I really don't think that is the case. The banks actually want to sell these properties, it's just sometimes they are really bad at it! I'm a Realtor, so their antics don't scare me, I just find it frustrating. The bottom line is that Homesearch (actually Nationstar, the seller) must be able to pass clear, marketable title to you at settlement. This is stated clearly in the contract. If they can't, then the contract will be released and you will receive your deposit back. You will also have title insurance in case something was missed (very rare!). So, I think your Greenlight rep is correct on this point. You should choose your own settlement attorney (after you are the winning bidder), even if it costs you a bit more. That way, you will know you are being told the truth. And yes, the sales contract reads like you are heading off for your execution! Basically, they are explaining that they have never seen the property, they are making no claims or warranties as to the condition, they will not do a single repair, so buyer beware! Additionally you must pay all financing expenses, closing expenses as well as a 5% buyers premium. So, you must take this into account in your final bid price. As an example, if your winning bid is $200k, you are actually paying $210k plus closing plus financing costs plus any repairs required...so DON'T OVERBID! If you are not experienced in estimating repair costs, you must have a professional do an estimate before you bid. That means contractors, not a home inspector. If you are the winning bidder but have overbid and later decide to walk away, you will probably lose $2500 minimum (your qualifying credit card hold at Homesearch). So, you must get your Realtor to do a current market analysis, giving you a price for the home in it's current condition and what it could be sold for after the rehab. If you love the home, and the numbers make sense, I would say go for it. Just don't get caught up in "auction frenzy" and bid more than is prudent. On the positive side, sometimes banks will give you a great price on a foreclosed property, so it can work out very well, as long as you clearly see the potential issues.

Aly the experience was seamless. Granted buying a house as is/where is sight unseen is generally frightening but it was okay for us. The bidding process is just like sniping on Ebay. Don't bother to bid until the last half hour of the last day. If you do, you'll just encourage the computer to place straw bids against you. The house we ended up with ended up being double the square footage and bedrooms than was listed on auction and we sold it for a good profit. It was a foreclosure so there were holes in many of the walls so we had to repair drywall and re-paint the whole house, but it was definitely worth it. Let me know if you have any other questions.

Just a follow up to my post yesterday. Homesearch did accept my offer on that property. The auction actually ended on the 22nd. I was told the 23rd they would review the offer. Got word back today they accepted the offer, so, it took a week for them to review and get back to me. I think I got a pretty good deal. Zestimate is $270k, Nationstar was high bidder at the foreclosure auction and took it back at $158,100 and my bid price on Homesearch was $152,500 to which they will add 5%.

Thanks for the feedback. I'm waiting to hear back on one from them right now. It was kind of strange. As you see throughout this thread people being the high bidder but below the reserve and called and asked if they can go higher. In my case, I received an email from a rep there simply stating my offer was below the reserve and being submitted to the bank for approval. I was told usually they have an answer back within 3-5 days and it's been 6 days. Other auctions I would liked to have bid on I can't now though while in limbo. If you read their terms, they say if you are the high bidder but below the reserve they have 15 days to accept or reject your offer. If they come back on the 15th day following the auctions and accept your offer and you do no execute a purchase agreement and purchase the property you are in breach of the terms of the agreement to place a bid in the auction and will forfeit your $2500 deposit to bid. So be careful. I am a little frustrated at the moment having to wait on them but I can't afford to buy 2 properties right now and if I bid on another and won I would also be required to purchase that one. If my bids were accepted on both and I only close on one they can keep my $2500 deposit on the other. Just keep that in mind when bidding. If you are the high bidder but it doesn't meet the reserve and you can't afford to purchase a couple of properties, you could be held up for 15 days from looking for another deal and have them reject the offer in the end. I guess unless another deal you find is just so good you don't care if they keep their deposit.

I just wanted to share my experience with homesearch. We SUCCESSFULLY bought a property on auction in Oct 2014. It had gone to auction at least 4 times before we won it. We bid on it in three auctions. The first we were simply outbid at the last minute, probably by the phantom bidder (the reserve price was not met). The second, we pushed the bid up against the auctioneer until we met our personal limit, again the reserve was not met and at the last second another bid came in and we lost. The third and winning time, we had more cash than before and we followed a few strategies. We watched the countdown clock and would always put our bid in within the last 1 minute of the countdown. We found that if the bid was placed with a great deal of time left, it would add another 5-10 minutes to the auction. We put our bids in with less and less time left...20 seconds left, etc. and at some point, it ran out and we were the highest bidder. By the way, you will notice that the bid increments go up to $7500, but as the time runs out, they entice you with lower and lower bid increments, to the point where they are only asking for 1k or $500 more as the next bid. So don't get tempted. We won the auction at 110k or so, and got the call that we were below reserve and was that our "highest/best". We got nervous so we gave them our absolute highest/best at 126k and they INSTANTLY, without hesitation, said "you win". Made me wonder if I left money on the table. So now having gone through the experience I would say it can be very worth it, though it's funny to see the tricks they use to bid up the auction. Don't even bother bidding until the final day.

I just bought a foreclosure thru homesearch. I saw the home listed for sale by an agent and had already seen the home. It was out of my price range. A few months later I was informed the house was on auction. I watched as the reserve was never met. A few months later I saw it on auction again. I bid 100k less than I saw the last auction close at with the reserve not met. I did not meet the reserve. The next day I got "the call" stating I was the high bidder and I was way under the reserve. They asked if I would like to go higher. Knowing I was still under the last auction reserve, I told them I might be able to go 10K more but I would have to check with the bank. The next morning I had an emailed contract saying I won, and the 10k was added to the price. I was worried it was a scam and did as much research as I could. I contacted the previous agent and was able to get other info on the home. The agent did not know a lot about homesearch other than they took it from him to auction and he was still going to get a commission. The whole thing from start to finish was suspicious. Closing day came and went w/o any Deed and my mortgage Co. would not close. My Mortgage Co. began making calls and handled most of it for me after this point. Finally 12 days after scheduled closing the deed was in hand and we closed this week. The banks appraiser showed me w close to 200k equity in the home. Inspection showed needing only minor fixes. The whole thing was very stressful, however its seems to be worth it..at this point

Highest bidder on Homesearch.com auction, what now?

Gary Fischer

Real Estate Investor · Parker, TX · Member since 2015 · 37 posts · 3 votes

11y

Originally posted by @Greg H.:

@Gary Fischer

Be sure to double check your numbers as Zillow is worthless in Texas as we are a non disclosure state meaning that sales prices are not disclosed

Thanks Greg... I'm here in TX as well. In FL the sales price is disclosed. It seems to be a safe number for the area in fact hopefully(especially with what I will put into it) a low estimate as a comp I pulled up on the same street 200 sq ft less same bed/bath sold 16 days ago for $285k. Several other comps in a small radius supporting similar values

Highest bidder on Homesearch.com auction, what now?

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