How NOT to buy a home from an auction website

[Pat Goodyear]

I don't consider myself a newbie; i have 15 properties and have always bought distressed homes off the MLS. I saw a home that was going to be auctioned on homesearch.com and was cash only "occupied". I will say i did not do my due diligence. I should have read the threads here before bidding, and done as much research about the property as i could. I did drive by it once and reach out to the homeowner's son to find out if they were still living there. (they were not). I bid early when the auction opened. (MISTAKE #1) i bid myself up to reserve (MISTAKE #2), thinking now they would have to take my bid of $140,000. Two hours before the auction ended, another "bid" was placed. I now know this was the auction company bidding. The bid went back and forth. My "limit" was $175,000; I ended up bidding to $180,000. After the buyer fee it was $189,000.

I went back to the owner's son and left my number. The owner called me. He happily showed me the house. Where he had removed all the doors. The in ground pool that was so gorgeous in the pictures was trashed with a ripped liner and no equipment. He mentioned he took the pole barn to his new place. Yes the 2000 sq foot building that was in the pictures, and on the tax assessment and in the MLS listing. And....there was dead vehicles and equipment everywhere. OMG. Now I had instant regret.

  The barn retails for $30,000 unbuilt. I reached out to the realtor. I sent pictures. My realtor assured me they would look at everything. A week later I was told that either loss my $6000 earnest money or buy the house. I had offered $170,000 which I thought was fair. The bank refused. Then, i found a clause that said we both agreed to use an arbitrator. So i called the realtor back and asked how to proceed with that process. They called about an hour later to say they would refund my earnest money. 

 It is now relisted. I put in a bid for $140,000. They turned it down. Oh well. I learned several very important lessons.