Is auction.com playing games with me?

Question

I just discovered that a property which I successfully bid on and won through auction.com is now also listed on the MLS. As an outcome of the auction process, I received a contract which I signed and the seller signed and it is still valid. However the seller has twice extended it and appears to plan to do so again. It would appear that either auction.com or the seller is continuing to shop this property around.

Has anyone encountered this in situation before?

Pavel Sakurets · Answer

If your contract allows you to cancel it, contact them and tell them that you found another property that you are considering to purchase (and am sure, you have something that you would like to buy right now) and tell them if they don't execute the offer within 7 days, you would cancel.

I do it with some realtors because they try to shop your offer elsewhere and usually tell them if the offer is not accepted within 2 days, I cancel it. (this doesn't work with banks though, only with regular consumers).

It doesn't cost you anything, just a phone call or email and should speed things up.

They do whatever they want. 3-4 years ago one day before the closing of the house I was buying in St Paul (1 day before the closing, the listing agent called me and said that the other investor group came in town and bought 50 houses, even though the bank has execute the PA with me before). What can you do after you paid for the inspections, title work, spent your time? Sue them for breach? Not worth the hassle. Move on.

Joel Owens · Answer

Steve sometimes the asset manager after it is listed pushes to Auction. Then if the winning bid is low they decide to list it again etc.

My experience with auctions is they are a waste of time. I look at commercial stuff but the system has it where auction can throw out counter bids on behalf of the seller to get the price upped.

It goes way over value by a bidder caught up in the hype process. I no longer bid on Auctions unless it's a smaller type auction where you might still can get a deal.

I also an not a fan of the round robin system for marketing listings. Some brokerages have a tour date for a property and then a date for " call to offers ". Then they take 4 buyers, down to another round, and then another  until the buyer is selected. This is all done to try and extract another 20 basis points on the price etc. The other buyers waste months of time on a property.

My clients we do not even look at those properties anymore. I like putting the price out there and say if the seller wants to engage here it is & if not we are moving on.

Steve B. · Answer

@Wayne Brooks

For sure, it was on the MLS before the auction.   The property history shows that it was removed before the auction then the listing was activated again a few days after my winning bid.

Wayne Brooks · Answer

The property was on MLS before the auction, that's how they drive traffic to the auction.

Dawn Anastasi · Answer

That's the issue -- if the contract included a clause that whichever party had to pay $100 per day to the other party for any extensions, they would have closed by now.

Steve B. · Answer

The terms of the contract are very much in their favor.   They can pretty much do what they want without incurring any damages.

Jassem A. · Answer

@Steve B.

They're greedy.  They will keep you as their backup plan until they are sure they can't get that extra 10%.  If you call and threaten to back out then maybe they will try to lock it in.  I'm guessing there is some kind of exit clause that would make it so that they do not have to sell it to you or it could be that the person that listed it on MLS has no clue the property is already under contract.

Steve B. · Answer

@Jassem A.

Thanks.   I guess it would make more sense to me if there was a significant spread between the bid they accepted from me and the MLS price - it is less than 10% on a property that cost even less than yours.

Jassem A. · Answer

Most of the sellers on auction.com are lenders that have foreclosed on the property and they are trying to get top dollar.  I bought a house earlier this year for 50k from the MLS.  A house a couple blocks down in worse condition had a bidding price that went well over double and they still didn't end up selling it.  I think a lot of these lenders are maybe overvaluing some of their properties and aren't happy until they can get all or most of the note paid off or they are going by some kind of automated plan before they finally decide to sell.

I've contacted them about possibly selling some of my properties through their site because I would also like to get top dollar but so far they haven't emailed me or called me back.  I guess it's because I'm not a bank and do not carry a note that went sour on the properties that I want to sell.