General Real Estate Investing
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback
Auction.com
Wow, I'm dealing with Auction.com on one of their real estate wonders and I just have to shake my head. They want me to sign a contract without a legal description! The representative claims most of their deals don't have one in the contract....... Dealing with them is shady enough, but this one takes the cake. Of course it's a Nationstar property......No legal, no deal......
Be careful you may not have a choice at this point if you won an auction
An update. I got auction.com to get the legal description added. You would have to be out of your mind to buy a property without the legal description. Auction.com will try to strong arm you into signing, but hold your ground. They caved when I said I wouldn't do the deal without the legal and had a little AZ state law to help me. The fees are ridiculous. The staff don't know much about real estate or real estate law. They stick to their scripts and you have to fight through the 1st layer to talk to someone with any knowledge or ability to get things done.
This is a very inexpensive property and the fees are almost 20% of the property price. The escrow company they are using is in CA and not very communicative. They don't offer any title insurance on many of these deals. Do your due diligence before hand and know what you are buying. In this case I was able to buy title insurance. I will have the deal closed on Friday.
This is the 3rd deal I've had with auction.com. The other two were much easier deals and were more standard deal, sold with Warranty deeds and title insurance. This blind buying isn't for the weak at heart. I can't imagine myself doing this on any property over $50K. Way to much risk. On this particular property I paid $19K and I figure the place is worth around $65K in good condition. Is it? Good question. Because this is an AZ house I fear termite damage more than anything. I will update when I find out.
Hi James,
Thank you for reaching out with your concerns- we always appreciate getting feedback from investors using our platform! At Auction.com, we pride ourselves on delivering nothing less than a positive experience. I understand you’re already well into the closing process, but I’d like the opportunity to further discuss with you in detail your concerns about our contracts and staff. Please contact me or my Customer Service Supervisors Yamir Gonzalez or Vicky Hernandez at [REMOVED].
Sincerely,
Peter Chevalier
Director of Customer Service
Read Auction.com reviews here:
Another update. The deal has closed. Still haven't been in the house as of yet. Probably later this week. I will update when I figure out the real condition of the place.
Interesting to see Auction.com keeping a tab on their business.
Hi James,
Congratulations on your successful closing! I want to thank you for your continued use of our online marketplace.
Sincerely,
Peter Chevalier
Director of Customer Service
Final post on this property. The Structure is good, the house is in good shape though a bit dirty from the single male tennant who has signed a new lease. Looking at 22% ROI on this place. Looks like a winner!
James Bell auction.com never visits the property. They are a liquidation strategy for the seller. You are getting a good deal, but need to do your homework. I've purchase a number of propertis through their platform and sold some stuff on there as well.
@perterchevalier I commend you proactive participation and diligence in this forum. Your presence isn't just interesting, it's very reassuring. I'm in the process of conducting my own due diligence on Auction.com and considering Andy Chu's result, this is a big endorsement for any investor.
Hey all, I had a heck of a time with an auction.com property recently too. My agent found a foreclosure property that looked intersting and is within a mile of my home. The property would list on the MLS but say all offers must be made through auction.com. Upon going to the property, it did have a legitimate agent's sign with a brokerage. We toured the inside and outside of the home (lock box on it my realtor had the code for) and it was in pretty good shape, comps go for 70-80k in the area. I had my agent contact the listed agent and he said after the auction ended, and if no bid was accepted, the agent would take an offer to the seller (Nationstar mortgage). Well, we made an offer of $20,000 through my agent and didn't hear anything for a week.
I then logged into auction.com to see that the property was relisted for auction. My agent then contacted the listed agent and was told "not accepted, all future offers must be made through auction.com". My agent then grilled the sellers agent about the legitimacy of auction.com and he assured her it was legit. Well, I then bid $18,500 on the property (plus $2500 auction.com premium) for a total bid of $21,000. I won, but it was below reserve. I then got a phone call about 20 minutes after the auction ended from auction.com congratulating me on winning the property and told me they were emailing me the documents to sign and asked me to escrow $2500 earnest money deposit. I then related that the auction had not reached the reserve price. I was then told I was legally obligated with any bid I made, even if it is below reserve. After consulting my real estate attorney, he told me that was not the case. He did say, however, that as long as the escrow delivery site was legit, I would be able to get the earnest money back if the deal was not accepted. So, I docusigned the papers, wired the earnest money to escrow, and waited. 5 days later, I was told the mortgage company accepted! I was in disbelief considering the property was listed on auction.com 3 times and each time the auction ended at close to 30k and didn't meet reserve.
Over the last 2 weeks or so i've been dealing with the settlment company and the title searchers. The title search was performed by my agent's title company, at the sellers expense. Everything came back clear. I'm now awaiting the hud-1 settlement statement and we should be closed on the property within a week. All of the paperwork has been through email and my real estate attorney has reviewed the documents - so far, so good. I'll let you guys know when we close. Apparently the closing will be through emails and scans and then I will meet up with the agent to transfer the keys. They said we could do the closing in a formal building like is traditionally done but it would be at my expense - no thanks! Will let you guys know when I close and begin the flip!
Congratulations on your auction win. What you are describing is pretty much par for the course with auction.com. The last couple of houses I won didn't met reserve and like yours, Nationstar accepted the bid. Both were also on the 3rd go around on auction.com. There can be some good deals, but you have to be careful. Sounds like you dotted the i's and crossed the t's! Onward and upward!
I have a client who in the midst of a very similar experience. The only catch was the property had a lien that was not picked up during the foreclosure process. This was a property they were offering a clean title and title insurance on, so that's positive. Sounds like the lien has been resolved and we should close next week. He was also below the reserve amount.
-
Real Estate Agent KY (#68970)
- Freedom Property Group
- http://www.fpg-ky.com
We bought a mobile home park through auction.com. No complaints. Similar to buying at any other auction. If you are used to going through a broker, it is a different experience. You have to do your due diligence prior to bidding. Read and reread all the docs they have available or better yet have your attorney do it. It will save you much headache later on.
"Know before you go"! As an auctioneer, I cannot stress this enough. The auction terms and conditions are the playbook for the deal. Many are client specific and can change from property to property, even within the same auction company. i.e. one property may have a warranty deed and the property next in line may be offered with a quit claim deed. Don't assume anything. Read and completely understand the auction terms and conditions for each property. If an item is vague or not specified, ask questions before placing a bid. Additionally, read the "auction site" terms and conditions. This usually provides information on whether the sale is with reserve or absolute, and who has the right to bid against you. I think most auctioneer's try to do a good job in providing accurate information and disclosures, but auctions are like any other real estate transaction, due diligence is a must!
These posts have been interesting to read because I have been using Auction.com to reserach houses in areas around the United States to look at foreclosed properties and such. I have found a few but have been leary on the legitamcy of the site. I am glad to see others using the site as well and posting their progress with the site.
My issue is the ability to do the Due Diligence from half way around the world. Its hard to get the place researched while I am gone but never the less I am trying to stay up on the listings for when I get home that I can got a head start on whats available.
Thanks for posting your interactions with the website.
Dustin
Has anyone used Hubzu, which is similar to Autions.com
Hubzu is a much more traditional RE site. They do have auctions, but once the auction is determined it has been my experience that I have go back to dealing with the listing agent, local title firms and it's much more familiar in it process to close. I believe Hubzu is operated by one of the big property management firms for a couple of the big banks. I'd rather do a Hubzu deal than an Auction.com deal. Auction.com deals, for me anyway, require much more due diligence just because they are so firm on their auction terms and you are dealing with out of area title and escrow firms.
Originally posted by @Mike Komenda:
Hey all, I had a heck of a time with an auction.com property recently too. My agent found a foreclosure property that looked intersting and is within a mile of my home. The property would list on the MLS but say all offers must be made through auction.com. Upon going to the property, it did have a legitimate agent's sign with a brokerage. We toured the inside and outside of the home (lock box on it my realtor had the code for) and it was in pretty good shape, comps go for 70-80k in the area. I had my agent contact the listed agent and he said after the auction ended, and if no bid was accepted, the agent would take an offer to the seller (Nationstar mortgage). Well, we made an offer of $20,000 through my agent and didn't hear anything for a week.
I then logged into auction.com to see that the property was relisted for auction. My agent then contacted the listed agent and was told "not accepted, all future offers must be made through auction.com". My agent then grilled the sellers agent about the legitimacy of auction.com and he assured her it was legit. Well, I then bid $18,500 on the property (plus $2500 auction.com premium) for a total bid of $21,000. I won, but it was below reserve. I then got a phone call about 20 minutes after the auction ended from auction.com congratulating me on winning the property and told me they were emailing me the documents to sign and asked me to escrow $2500 earnest money deposit. I then related that the auction had not reached the reserve price. I was then told I was legally obligated with any bid I made, even if it is below reserve. After consulting my real estate attorney, he told me that was not the case. He did say, however, that as long as the escrow delivery site was legit, I would be able to get the earnest money back if the deal was not accepted. So, I docusigned the papers, wired the earnest money to escrow, and waited. 5 days later, I was told the mortgage company accepted! I was in disbelief considering the property was listed on auction.com 3 times and each time the auction ended at close to 30k and didn't meet reserve.
Over the last 2 weeks or so i've been dealing with the settlment company and the title searchers. The title search was performed by my agent's title company, at the sellers expense. Everything came back clear. I'm now awaiting the hud-1 settlement statement and we should be closed on the property within a week. All of the paperwork has been through email and my real estate attorney has reviewed the documents - so far, so good. I'll let you guys know when we close. Apparently the closing will be through emails and scans and then I will meet up with the agent to transfer the keys. They said we could do the closing in a formal building like is traditionally done but it would be at my expense - no thanks! Will let you guys know when I close and begin the flip!
So, in buying a property from auction.com, they provide title insurance?
Originally posted by @George Gray:
"Know before you go"! As an auctioneer, I cannot stress this enough. The auction terms and conditions are the playbook for the deal. Many are client specific and can change from property to property, even within the same auction company. i.e. one property may have a warranty deed and the property next in line may be offered with a quit claim deed. Don't assume anything. Read and completely understand the auction terms and conditions for each property. If an item is vague or not specified, ask questions before placing a bid. Additionally, read the "auction site" terms and conditions. This usually provides information on whether the sale is with reserve or absolute, and who has the right to bid against you. I think most auctioneer's try to do a good job in providing accurate information and disclosures, but auctions are like any other real estate transaction, due diligence is a must!
Can I ask, as a new investor, what is a warranty deed and a quit claim deed?
Can someone explain to me the process of the bidding I'm new to this and its confusing for example if it is an REO and the starting bid is 25000 and i bid on that and win is that how much i get the property for or will i be stuck with liens
@Jose Soriano it will depnd on the terms, but I wont bid on anything that doesnt include a warranty deed with all fees, liens and fines covered by seller. Otherwise you need to see title BEFORE you bid.
@Jeremy Tillotson at auction.com it says
Buyer will receive a Special Warranty Deed or equivalent.
So do you think with a special warranty deed it might still be worth it?
@James Bell you have offered so much great information. I have question, how can you determine if the property on auction.com is on there for a 3rd time?
Originally posted by @Lisa Mauritis:
@James Bell you have offered so much great information. I have question, how can you determine if the property on auction.com is on there for a 3rd time?
The only way I know is to watch the auctions closely. If the auction goes a 2nd or more rounds there is generally a couple of weeks between auctions. It was always time consuming process as the actual auctions can go on for a couple of hours at the end until the winner is determined, with additional time added to the auction each time a bid is placed. That is also the only way I know how to determine what the previous auction price was as well. That information isn't listed anywhere else and disappears as soon as the auction is determined. But it has been my experience persistence pays off.
Please note it has been about a year since I purchased through auction.com as the market in my two primary geographical areas has changed and with it the number of properties that are being offered on auction.com. Good luck.
@James Bell thank's so much for the info and Happy New Year!
Trying to keep the thread alive. I know the auction sites shadow bid (for the seller, ha) until reserve is met. Has anyone figured out any tells to help you decide if you're bidding against someone else or actually just yourself?