Has anyone dealt with Auction.com?

Question

Hey guys-Wondering if any of you have had interactions with Auction.com. I've read some of the other biggerpockets posts about peoples' experiences, but I'm looking for something more local. Any info is helpful...i.e failed bids, success stories, horror stories, etc.

Matt Higgins · Answer

I have purchased numerous properties in Minnesota from Auction.com. I have found fewer and fewer "deals" on the website lately. I have had properties under contract that just get "canceled" after sitting in "holding" for months. Then it takes a couple months to get your 5k earnest money back and for god sakes don't forget that you had paid it at one point. Issues that I have come across recently. Is the property occupied? are they selling the property during the redemption period? Is it really even a "deal" at the purchase price. I made a lot of money buying properties off this site, fixing and selling in 2015, 2016, but I have only purchased one property off there this year and I'm not convinced it was a real "deal". That being said the site is legit. I would use the filters and at the very least filter it down to the "bank owned" properties unless you really know what you're doing. I have always closed with their title company and got their insurance, but after looking more closely at some of the cost I think I will consider using my local title and closing company on the next one.I shouldn't say one bad word about this site considering how much money I made off of them and Hubzu over the last 5 years, just sad that the inventory is drying up and getting more competitive. However, with sale prices up I wish I would have expanded my buying criteria a little bit so I was making money this spring.You really can't count on a property you buy from them closing unless you have the signed contract from the seller and the property is not under redemption. Just b/c you get a "congratulations" from auction.com does not mean you have a signed contract. It can be a little bit of a frustrating process.

Matt Higgins · Answer

In my experience opening bid price is approx 30% of final sales price

Matt Higgins · Answer

my guess is they will let you back out and return your earnest money. They have offered me properties that have fell out of contract from other buyers before. Please follow up and let me know what they do, kinda curious. They are geared towards investors and volume. I would guess most of their buyers bid and buy before viewing the properties. I can't amagine them digging in heels over 5-10 grand. If u think it's a good flip and located in Mn send me a message and maybe I would take on the contract.Generally they seem customer service orientated imo.

Daniel Johnson · Answer

I'm in the middle of a purchase with them right now and am a bit skeptical on how this will turn out. Auction.com acts as a broker for the deal between buyer and seller but they have a clear bias towards the sellers and one could even say they are agents for the sellers. I say this because the purchase contracts overwhelming favor the sellers, buyers are given a limited amount of time to submit paperwork usually 24-48 hours where as the sellers are given anywhere from 7-15 days for review, buyers are not allowed to add inspection contingencies to the contracts, buyers are only allowed access to many properties if they are working with a licensed agent but most sellers will not offer the agent any commission so good luck finding an agent that will work with you, after your offer is accepted they place in the contract your are not allowed to inspect the property prior to closing and worst of all if your bid is lower than the sellers reserve price Auction.com will actually place a bid to drive up the price! If that's not a bias I don't know what is! So after all that this being my first purchase with them I found a pretty good deal where the numbers would work really well. I did a pretty good inspection with my contractor at the time and we came up with a repair number that would work. So in the intermediate period awaiting the sellers confirmation of my bid and the sales price and the title work being done, the weather in the area became really bad and we had a ton of rainfall. After a few weeks of waiting for this deal to close something told me to go back and inspect this property the hell with what they put in that contract. True enough I discovered that the roof obviously had several leaks and a bunch of moisture got inside and has caused a strong hazardous presence of mold! So now I will see how Auction.com handles my interest in this because there was no mold detected when I did my inspection and it was surely developed or exacerbated after I made my offer. I've notified them that this closing has to be postponed and the seller will need to negotiate with me to come up with a solution for the mold remediation. I'm curious to hear other people's stories dealing with Auction.com. Hopefully they can get my transaction handled to where it's beneficial to all involved.

John Woodrich · Answer

I agree with everything Matt has said. I have purchased only 1 property from them and all went fine but I have heard of issues purchasing houses in the redemption period. A property local to me was on there for a starting bid around $40k but it didn't sell. Then it was listed after the redemption period for around $100k and sold for in the $70s... If I had purchased it sight unseen on auction.com I likely would have not acquired ownership and had my earnest money tied up. I inspected the house when it went for sale, I would have been OK but not happy at a price of $40k.