Bidding on auction.com

[Tom Martinez]

I want to bid on a property that is due to be auctioned on auction.com in the next few weeks. I would like to understand any additional costs or risks associated with bidding. So, I am curious what other expenses I could incur through the process, other than what I plan to bid. Any experience or suggestions are greatly appreciated. Thanks!

[Larry F.]

Hi Tom

Just participated in a Auction .com sponsored event in Washington State.

My expenses were as follow.

• Bid Deposit of 750.00 (for my county)

(2) Wire Transfers @ 25.00 each (1) for deposit and (1) for the Bid Payment

Other than that, I just had time investment doing research on the property's I wanted to bid on. It was fun and there is competition out there. So know you max bid and stop there.

Tip: Don't place your bid until late in the process, it will keep the price down. I mean way late with just a few minutes left. Be prepared to watch the bid closely.

Have Fun!

Larry Foster

Wholesaler Washington State

[David Friedman]

Most times when you buy a property from auction.com they charge a 3 to 5% buyers fee on the final sales price. That's a huge cost to think about.

[Justin Spaulding]

Ive never done this, @Tom Martinez. let me know how your experience goes! Be Great!

[Scott Egbert]

@Larry F.  I'm also looking to know more about this.  Can you walk through the homes before you bid?

[Jake Thomas]

@Tom Martinez $2,500 deposit to make a bid (they just lockup $2,500 on your credit card) and refund it if you lose the auction.

5% buyers premium.

I have noticed the reserves for these are really high and the same property is repeatedly re-auctioned week after week. 

I bid two different ways. Determine what the highest you can go on the property for whatever you are going to do with it (flip, hold etc.) and place to bid at that amount from the beginning. Or wait till the last few minutes and make a bid wherever the next increment is. 

The bid increments will get much smaller once you get closer to the reserve amount. You don't have to hit the reserve to win, I won one last year without hitting the reserve.

Good luck

[Christopher Gingras]

I just closed on an auction.com property and it went well overall. This particular property had no auction fees but I needed to cover some of the costs typically paid by the seller.

It's was a $27,500 2 bed 1 bath unit in a development with some other quads I own. It was sight unseen so I was afraid I might find dead animals and missing drywall but it was in great condition.

I would do it again but would try to look at the property beforehand.

[David Friedman]

Auction.com has two different business models.

1. They deal with foreclosure properties and charge a bidder's premium as a % of the final bid price.

2. They deal with private entities that want to sell their property in an auction based scenario. This may or may not have a buyer's premium.

While scenario 1. may require cash or like cash, scenario 2. sometimes has the possibility of getting conventional financing.

[Rich E.]

Make sure you understand everything they need as far as paperwork and earnest money upfront.  Once you win the bid, you have very limited time to complete all of this.  The timelines are so tight, It almost like they want you to fail so they can keep your deposit.

[Tom Martinez]

Awesome. Thanks for the feedback.

Larry F. and Jake Thomas - a follow up question. The property I am looking at is a condo. So what's the best way to be sure there is no over due HOA fees or to make sure that if I win the auction, the title will be clear??

[Jake Thomas]

@Tom Martinez When I close properties from Auction.com I get a special warranty deed which would take care of any assessments such as past due HOA dues and such. The auction should state what type of deed you will receive.