I have a bought some properties on Hubzu, and as many of you have stated, you have to be patient to get a good deal.
After over a year watching and dealing with them, I can still not figure out their business model. What I have seen so far, it just doesn't make sense to me.
We would all think the objective for the seller is to get the best possible price for a property, but as far as I can see, there is no logic in their strategy.
Does anyone here have some inside knowledge or facts of their business model???
And who are these people who run the actual sales of the homes? Failed used cars dealers????
My last deal on Hubzu and as all the others, have happened as follows:
Property listed for $149.900. Minimum bid: $105.000 Result: No experienced investors are bidding as we do not want to pay the Premium.
Property relisted for $144,900. Minimum bid still: $105.000. Some amateur bid $122.000. (A total of $127.000 incl; the Premium). Hubzu does not accept the bid and the property now goes to "Highest Offer" and with no Premium.
Highest Offer listing has now a starting offer at $88.000 A few low ball offers comes and after watching it for a couple of weeks, I offer $100.000. A new offer comes in at $112.000 and I go to $110.000. One week later, Hubzu counter me with $140.000!!!!
Wow, what a deal!!!!!! I reject and the listing is reset with no offers. So here we go again, starting all over. Long story short, I now offer $89.000 and 3 weeks later Hubzu (the bank) accept.
Like I said, ALL my deals with Hubzu have gone down the exact same way. Who in their right mind came up with this business model????
Does anyone here have some inside fact and knowledge of Hubzu sellers???
Investor / Business Guy from Ellicott City, Maryland
These types of "auction" sites are just lead generation systems for sellers. They aren't making any decisions on what to sell properties for...they just pass the offers to the sellers who make all the decisions. That's why the list price generally has nothing to do with the ultimately acceptable price to the seller.
J Scott, Lish Properties, LLC
E-Mail: [email protected]
CHECK OUT MY BIGGERPOCKETS BOOKS:
Thanks for your reply Scott. I get that.
How ever, is it the BPO that is set so wrong, is it the "Auction style/Best offer" system that doesn't work very well, or is it just plain stupidity of banks and asset managers that cause so many of the properties to be sold at "lowest possible price".
I love it and make good money on every Hubzu deal, but from a bank's point of view, it just doesn't make sense at all to me.
As we speak, I just got another ridiculous counter from Hubzu (the bank). Will not even counter, but reject. This property will then relist and I am pretty sure I will buy it for less than my original offer. Does that make sense?
Real Estate Investor from Dallas, Texas
In Hubzu's Defense one thing they do have going for them is you, the buyer, sees other buyer's bids. AS you know people in auction settings typically pay more than they originally intended thus making the seller more money.
I have witnessed this many times lately as they show the increasing bid.
As far as what you are mentioning that has happened plenty of times over my career with REO's just listed on MLS as well. You have to realize the person at the bank making the decision has tons of these deals going across their desk each day. They have zero emotional attachment and only go with the %'s they can currently work with. Internally the price drops on their end and they just use that at the new basis. They aren't going to spend one extra second of their life thinking how at one point they had a 100k offer. They just see their new price point at 89k and go with it.
from Milwaukee, Wisconsin
I found this site because I wanted more information about HUBZU.com and I found the answer that I was looking for here.
I placed an offer and an offer much higher than mine came in a week later and in that time I hadn't heard anything back from them. After I placed another bid, the amount went up 50 dollars each time. I really believe that the broker representing the seller is the other bidder just trying to get as close to the listing price as possible after he catches a fish.
I read that someone placed a highest bid and the auction was due to close which it never closed and he was left trying to figure out why he didn't win the auction and it was back to the NO TIME REMAINING status again. So I then decide not to place a highest bid and wait to see what happens. Patience is the KEY!
Investor from Manteno, Illinois
So you got the house listed at 150k for 89k? Thats awesome.
Remember, never look a gift horse in the mouth. Us little guys need all the help we can get. The fact that the bank is ending
up at a lower number than you originally offered is their own fault.
But I think part of that too is that these banks have certain formulas that they use to price houses. And I think time on market is a big part of that. In week one, you probably aren't going to see much of a discount. But the longer it sits, the more they're willing to drop.
What you wonder is why doesn't the bank take a look at the bid history and see that you put in a bid some time back and then counter your 89k bid at that price. Wouldn't you think that would make some sense?
But its good to know. I haven't done much with hubzu. But I'm bidding on one right now.
They listed it 95k. I bid 77k. They countered at 94k. It needs about 18k in rehab and would be worth about 140k so it isn't a deal for me at 94k. I countered at 77,100. They countered back at 92.5.
I'm like, hey, is this how it works? :-)
I countered back at 77,105 and my realtor laughed. But they countered back at 88k. I countered again at 77,110 and they pulled it back off and set the price to 90k.
So then I put in a new offer at 75k and I'm the current high offer although I haven't received a counter as of yet.
But thanks to your post, I'm going to keep playing the game with them and see if I can get that kind of discount. At 75k or 76k, I'd be tickled pink. And since its listed at 90k, thats only about a 15% discount. Not as good as what you got on yours. But good enough.
I'll let you know how it goes......
Investor from Gilbert, Arizona
Agreed - this model that they are using is beyond terrible. The auction format is such a time waist. I have been the high bidder on one house 5 times and the auction ends in reserve not met. No counter nothing. You have to follow a house literally a month or two playing this game until it finally goes to best offer. Even worst is the employees that run the place. India outsourced and absolutely clueless borderline illegal. Search prior posts on gohoming.com which is what this outfit used to be called. What I cannot understand is why sellers would ever give them inventory. This would be the last place I would ever consider.
from Milwaukee, Wisconsin
Doesn't make since at all to me. Im with you on that one, I would never give them my property to sell.
So the auction ended and no one won because the highest bid came from their end. So Im still waiting......
Thanks for the info.
Residential Real Estate Broker from Greeley, Colorado
Here's some history on hubzu from an agent who used to work them hen try we're a different company.
Hubzu used to be gohoming which is the auction site for altisource. Altisource used to be Ocwen. Ocwen and altisource are technically different companies but they are owne by the same people. Ocwen buys properties/services them and altisource values and sells them. I would estimate 99% of the properties on hubzu/gohoming are owned by Ocwen/altisource. I see they are trying to branch out to other sellers now, but this is why the offer them is so wacky. Everything is outsourced to India.
I used to list for Ocwen four years ago them they switched their model to one agent per state an the auction idea. The listing agent does nothing but put the house in mls. They get their vales from bpos that other agents do and the people from India decide what offers to accept.
Ocwen keeps buying pools of assets from large banks. They bought gmac and one wests assets as well as many others. Their model is to sell them as fast as possible and take a quick profit.
FYI, when they do the initial auction, they won't accept anything unless the reserve is met. Your wasting your time bidding low and hoping they will accept it.
Mark Ferguson, http://Investfourmore.com
E-Mail: [email protected]
See the numbers on my 15 rentals, flips and much more at http://investfourmore.com
Is their anyway to speed up the closing with hubzu?
House Flipper from Mount Pocono, Pennsylvania
The process is slow and difficult to get answers, when your bid is accepted it takes time to get the transaction closed. From acceptance to closing, all done through emails, lots of duplication and requests for documents that were already submitted. You will not change the system. My last transaction from acceptance to close was 45 days. Stressful experience but it seems to work for them, as many people participate in the process which keeps them in business.
It appears there is no urgency to close transactions and we on the other hand are anxious to move on and consequently, frustration.
John Moore, John Moore Homes
Telephone: (570) 243-8484
3360 Route 940
Mt. Pocono, Pa.18344 [email protected]
I know it was mentioned before by someone else in another Hubzu thread, but it did help me in closing soo much quicker:
When you make your bid, you get to choose if you want to use their title company or your own. Yes, if you choose your own you will have to pay extra closing cost, but its totally worth it. I havent dealt with their title company but I took the advice and everything went pretty smooth.
from Milwaukee, Wisconsin
So I got a congratulation letter that my offer was excepted and a contract to sign and return within 48 hrs. The closing agent assigned by the seller is in GA and I have to close in his office. Who has closing experience info with HUBZU to share. Thanks in advance!
You'll most likely be overnighting documents to their office. You will probably need to sign the paperwork they send you in the presence of a notary. Either that or you wil need to close the transaction with a local title company that will work with the seller's title agent.
from West Palm Beach, Florida
@Zipporah Wood Have your attorney review the title policy they want to issue you. They can sometimes exclude things that will be a problem for you-code violations, open permits, etc.
from Milwaukee, Wisconsin
Thanks for all the useful information.
I was the high bidder on a property and I did choose my own title company and they still sent me the paperwork with their closing agent assigned by the seller in GA. So we crossed it out and attached an addendum with our title company. They are hard to contact but I must say go with your own title company.
from Grand Rapids, Michigan
I have bought a property myself and also helped 4 investors/owner occupants secure properties on Hubzu.
It is no different than a HUD/Fannie Mae foreclosure sale – Hubzu just protects themselves more by saying over and over “property is AS-IS”, “Seller takes no liability”, “Seller is not responsible”, etc etc. I’ve had 2 clients have their attorney review the documents and they are indeed legit – you buy the property AS-IS.
Edited Dec 13 2013, 15:26 by Administrator
How long does a property stay on Hubzu before they start getting serious about looking at offers? I've been bidding on one for the last couple of weeks and all I get is a simple email stating the reserve has not been met. This last week I did get an email stating the reserve had not been met and a small note that I could increase my bid. This was after the auction had ended. I guess I'll play their game for another week and then move on!