Auction. com: What's the deal?

Question

I have been following a house on Auction.com and it just finished its SIXTH auction. Several of the auctions did not meet the "seller's reserve price" but several did and still the house was put back on for another auction. Initially, the house had a minimum bid of $55,000 and there was aggressive bidding up to the 70,000s. Today, the minimum bid was $92,300! I know from my channels that this is about what is currently owed and the property is worth maybe 110k to 120k.

I know Auction.com has many complaints with the BBB but they appear legit and I know someone who has used them successfully.

Anyway out there understand the game that is being played here?

Greg H. · Answer

The properties on Auction.com usually fall into 2 categories.  Some are active foreclosures that are about to be foreclosed on and are basically advertised on the site by the Trustee(Some states have a different name but it is the one handling the foreclosure for the bank)

Other properties have already been foreclosed on and the bank is trying to sell them.  However, many of these banks have the opportunity to collect on mortgage insurance from FHA, FNMA and the like.  So, given that, there is little incentive for them to sell the property at a steal as then have the option to collect on the insurance

Brett Goldsmith · Answer

Some are foreclosure auctions, short sales, and others bank owned homes. Possible sale dates got postponed, buyers walked, etc. I have sold homes to several auction.com winning bidders on some of my short sale listings.

Jim Adams · Answer

It could just be that the bidder was the bank. If you register for the auction, it will show you if the last bidder was the bank while you're watching the auction.

Maurice George · Answer

Greg is spot on. Avoid wasting time for CWCOT properties on Auction.com. They will only sell at 95% of appraisal. For non-CWCOT properties, you may occasionally get a deal since bank has incentive to dump them.

Auction. com: What's the deal?

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