All Forum Posts by: Vic Iyer

I did not respond to it because it was listed for auction again starting Thursday. They will likely use my previous offer price as reserve to see if they can more $$. So I would rather wait for the next auction instead of sending my EMD and let them use my bid as reserve.

Just sharing an email I received from auction.com (I have taken out the $, address)

We’re excited to share that a property that you recently bid on is still available and you have limited-time opportunity to bid on this property!

Property you bid on: xxxxxxxxxx While your last bid fell below the Seller’s reserve price, it may fall within a reasonable range for consideration. You have the opportunity to have your last bid amount presented to the seller for review. Last Bid Amount: $xxx,xxx.00 (Plus any applicable Buyer’s Premium) If you wish to proceed with the Last Bid Amount, please reply with your confirmation by 2 PM PST Today 5/8/2018 Additional information: • Upon your confirmation, we will send you the purchase documents for you to execute. Upon completion of signing the Purchase Agreement and depositing EMD (Earnest Money Deposit) to the Title Company, your contract package will be sent to the Seller for consideration and review. • In the event the Seller rejects your bid, your earnest money deposit (EMD) will be returned to you. • Please remember that the purchase of the home is Subject to Seller’s Confirmation. As such, the seller has no obligation to sell unless, and until, the Purchase Documents have been fully signed by both parties and the Earnest Money Deposit has been received as required by the Purchase Agreement. Prior to that time, the Seller can continue to market, sell, or remove the asset from the auction event. We sincerely hope that you are able to take advantage of this second-chance opportunity. Should you decide not to proceed, we completely understand and we look forward to helping you find other properties that meet your real estate goals. Thank you for your consideration. 

Well, IT is always subject to the actual seller (Bank approval). Sometimes banks. Sometimes title issues can force a bank to cancel the auction and take the property offline.

Yes, They intentionally start the bid low to entice more bidders to get into a bidding frenzy. After the auction is over the actual approval takes any where between a day to 4 weeks (yes it does take for some banks).

Sometimes they intentionally list empty homes as "Occupied" to prevent potential bidders from looking at potential "Defects". Roof issues/mold issues/broken home are examples. They want naive bidders to get fooled and get their $$ .

I have bought multiple properties through auction.com

My most recent experience:

Auction never reached the reserve price and was pulled up by auction.com to get to the reserve price. They relisted it several times with the reserve price dropping every other time. In the last time they called me during auction and told me I was very close to reserve price and I incremented my bid by a small amount and won it.

They pushed me to get the papers signed and wired the EMD asap. I hired my own title company and run through the title search and closing.

What to watch out:

1. Don't end up over bidding! Seld-displine is the key. IF you don't get it then look for the next one!

2. Hire a title company to run through title search.

3. Generaly the reserve price is artificially kept high to entice a naive bidder to bid and ober pay for the property. 

4. don't forget your 5% premium on top of tyour bid price. 

5. IF bidding on "occupied home" see what kind of title they are giving (Special warranty deed versus Quitclaim). Stay away from quitclaim. Also investigate who is living there on what's going on before trying to bid. 

IF you are planning on occupying the home you are buying then look at fanni mae (HOMEPATH) or Freddy mac homes. They give preference for owner occupants and some of them are great deals with no work required.

The title should have ordered the estoppel that should clearly say the $ owed and any HOA violation

Ok this is what I would recommend.  

The security and any deposits you colelcted should be in a separate non-interest bearing account .

The rental checks should go into separate account. Similarly expenses related to the rental should be drawn from this account. This would keep things clean

Pradeep,

  Be careful with your money. Flying out a day and trying to find a deal neve works unless you have a family friends living in that place. You do not want to ink a contract without knowing about the property/neighborhood. I live in SFlorida and my friends up north in Boston area bought couple of properties through me and have them rented. Since they know me they took liberty in buying properties here in SFL. You need to have trustworthy people managing the properties. You don't want to get big repair bills from unscrupulous people.

What they are telling you is that financial contingency is okay if you are buying it for yourself (probably need to sign owner occupant certification). This means appraisal contingency should also be impleied. You need to initiate a chat with auction.com and save the response for future use if needed. Also check if they allow inspection contingency on this particular auction. Each bank is different so check it out. Last but not the least do your own title check if you plan on using auction.com title company that gives free title insurance. 

Ask about your EMD . What happens to it if you cannot get loan approved or if the appriasal comes back low.