HUBZU Purchase and Sale Agreement

10 Replies

Has anyone had experience closing on a property with after winning a HUBZU auction?  Their PSA looks very one sided to me.  

they not only look 1sided they are one sided.We closed on several this year .The best advice is use your own title company

All REO contracts are one sided....nature of the beast....yes, use your own title co.

I closed on a Hubzu property this year. It took about a month longer than the original scheduled closing date because the owners (a bank) had to make sure they had proof of the deed in lieu of foreclosure of the person who had given it up. I wasn’t crazy about all the extra fees but it went pretty smoothly otherwise. We used their title company and had to do a separate municipal lien search, because that wasn’t included.

It was actually through an Internet search to learn more about Hubzu that I discovered Bigger Pockets (through other forum conversations about them).

I’m in the middle of a close either then right now. Very one-sided - No room to negotiate, so be sure you’re comfortable with their rules. The fees are high too, so be sure to factor that in on your costs. Communication with and getting info from the title company has been hard. In the future, I’d probably use my own title company rather than save by using theirs.

I thought I'd update post-close. I think I might bring my own title company rather than taking chances with someone else... In hindsight, saving $1500 in title costs was probably not worth the headache. The title company for my transaction was often hard to communicate with, and lack of response delayed the close, in my opinion. In fairness, I changed from cash to finance - rookie first-time-hard-money-user mistake, hard money is not cash. :)

The title company/closing coordinator handled all of the required change documentation, but it was VERY slow - I'm talking 10 days to get a modified PSA, not even including signatures. That delayed my lender, which in turn delayed close.

Other than this, I had little issue with the actual PSA. I don't think it was any worse than any other PSA, but you don't get any contingencies, so you are taking a little bit of a risk. Everything went along fine, I got everything I was entitled to, etc. I was able to take possession the day after close, even though deed recording was delayed another 1.5 weeks due to holidays and backups at the county. (In Cleveland, that means no water at property either, until deed transfer is complete).

Process - at the 10,000 foot level:

1. Get winning bid.

2. Sign PSA and await formal acceptance

3. Wire Earnest (varies, expect 3-4%)

4. Complete intermediate paperwork as it arrives...

5. Sign closing papers (a closing agent will meet you in person)

6. Wire remaining funds and await confirmation of possession.

7. Await title and deed transfer.

Hi! I'm gearing up to make a bid on a Hubzu property, our first. I am a licensed Oregon agent, got the license to facilitate our REI business. Never submitted a bid on anything yet, though, so I am totally newbie. Sent an email to my brokerage's mentor, but won't hear back from her until tomorrow sometime.

We walked the property today, wrote up our budget, the numbers look good.  There are 5 days left on the auction.

But the property is listed on the local MLS at one price ($154,000), and the current Hubzu bid is much lower ($107,000; reserve not met). Is this typical? Should I expect the reserve to be the same as MLS listing price?

We want to do this via financing, if it will finance (we think so, but it's our first go-around, so not 100% sure until we have an experienced inspector in).  We also want to have a particular subcontractor give us a bid on the foundation.  

Do we just go ahead and make a lowball bid now on the hubzu website, and then I schedule and bring in my inspector and sub while I'm waiting for the auction to end (assuming I can get them in there that fast)?  

If I am accepted as high bidder, will the PSA have a financing contingency in it?  How long should I expect them to offer for time to secure financing?  (We have a pre-qual letter from our mortgage broker, and *could* pay cash, if absolutely required.) 

How much is the technology fee?  I see that it will be required, but nothing says how much.  

Thanks everyone!  We're excited to get going! 

Originally posted by @Tracey Hamilton :

Hi! I'm gearing up to make a bid on a Hubzu property, our first. I am a licensed Oregon agent, got the license to facilitate our REI business. Never submitted a bid on anything yet, though, so I am totally newbie. Sent an email to my brokerage's mentor, but won't hear back from her until tomorrow sometime.

We walked the property today, wrote up our budget, the numbers look good.  There are 5 days left on the auction.

But the property is listed on the local MLS at one price ($154,000), and the current Hubzu bid is much lower ($107,000; reserve not met). Is this typical? Should I expect the reserve to be the same as MLS listing price?

We want to do this via financing, if it will finance (we think so, but it's our first go-around, so not 100% sure until we have an experienced inspector in).  We also want to have a particular subcontractor give us a bid on the foundation.  

Do we just go ahead and make a lowball bid now on the hubzu website, and then I schedule and bring in my inspector and sub while I'm waiting for the auction to end (assuming I can get them in there that fast)?  

If I am accepted as high bidder, will the PSA have a financing contingency in it?  How long should I expect them to offer for time to secure financing?  (We have a pre-qual letter from our mortgage broker, and *could* pay cash, if absolutely required.) 

How much is the technology fee?  I see that it will be required, but nothing says how much.  

I typically see Hubzu properties also listed on the MLS for a higher price. I think the reserves are a bit lower than the MSL listing price, but am not sure how much.

From what I've read on BP and also seen on Hubzu over time is that properties oftentimes go through the auction several times without meeting the reserve. After this happens a few times the seller will oftentimes accept an offer that didn't meet the reserve.  The only way to know if properties have been through the auction a few times is to keep watching the site (the same probably goes for other auction websites). 

Most of the properties I've seen on Hubzu I wouldn't pay the reserve price, but at some point I might put in an offer below reserve after a place has been through the auction a few times.  On Hubzu there is usually a place that says if they will allow you to finance the purchase ('financing considered').

Thank you @eric james!  Can you see any compelling reason to wait until close to the end of the auction to place a bid?

Once bids start being placed, will I be able to see a bid history?  Right now, this property is showing the Starting Bid only, so I assume no bids have been placed.  

This is what happens with most of the properties I've seen on Hubzu.  There are no bids until the very end of the auction.  Although, it is also common that there are no bids at all.  I don't see any disadvantage to waiting.  Also, be aware that some of these auction sites will themselves counterbid on properties, trying to get you to increase your bid.

Hubzu is legit, but works better for the seller than the buyer. The term "auction" is misleading, because the seller has zero obligation to accept any offer at any price. The MLS list is usually much higher. Each property will have different terms, so watch for that (tech fee, commissions, etc).

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