Auction.com counter bidding

[Linda Smith]

I've bought one property through auction.com a couple of years ago. On that one I didn't meet the reserve but was the highest bidder. It was submitted to the bank and they accepted. Cash deal, I was skeptical all the way through but it turned out OK.

Now I'm interested in another property. I assume the first bid was a real person (auction.com wouldn't actually start the bidding, right?) I then watched the bidding go back and forth, assuming auction.com was counter-bidding after each bid, with every other bid being auction.com. This drove the price up quickly, too early in my opinion. At one point I jumped in and was high bidder. At that point the counter bidding stopped and I was high bidder at my absolute max for about 12 hours. Then I was outbid, and there it still sits with just a few hours left. I'm trying to figure out if that last bid was real or auction.com counter bidding... if it was a real person I think there would've probably been a counter bid shortly after? It still hasn't met the reserve.

Are there any hints as to whether a bid is real or not? What happens if the auction closes with auction.com being the highest bidder? I really want this property but can't go any higher. I guess I'm hoping that if it closes with a fake high bidder it will be relisted and maybe I'll have another shot at it.

[Richard Weinberg]

@Linda Smith

I have purchased several homes from auction.com.

I have also bid unsuccessfully for a house on auction.com. Auction.com will be against you if the reserve is not met. Once the reserve is met they will not be against you or counter bid.

Auction.com knows who is on your side and your contact info. They know if you’re bidding or just watching. They have gone as far as to call me when I failed to bid again when they were at the last few moments of an auction in an effort to asked me to make one more bid.

Almost every aspect of the process with auction.com is leveraged to put auction.com and the seller in the driver seat. I have found you have to do your due diligence from every other possible resource as you can to learn as much about the property as you can without ever having been in the property. That means visiting all the public real estate sites, tax records, gathering all the comps you can but understand that if you bid on the house it’s likely you won’t get the winning bid unless your bid exceeds the reserve.

I won the bid on a current property and they failed to clear all of the liens and asked for an extension. I reluctantly granted the extension and now they’re asking for another extension at which time I’m saying that’s enough....and walking away. I typically find the winning bid price point and clearing the reserve, puts most properties at a price point where most flippers would not be interested. This winning price point typically could leave enough margin for a good buy and hold investment.

I would advise you to expect most auctions on auction.com to not work out well but then sometimes they do.

I would be interested in hearing about others experiences with auction.com, what went well and what went poorly.

Good luck.