Has anyone ever been to an REDC auction? What is it like?

Asked by Rich Martin, Charleston, SC Fri Jan 16, 2009

Do you realy get a discount to current market prices?

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Answers

67
Lee Firestone, Home Buyer, San Diego, CA
Wed Sep 28, 2011
The auctions are fast paced in order to sell many homes in a short period of time so you need to pay attention. TO GET A GOOD DEAL YOU NEED TO DO YOUR HOMEWORK ON A PROPERTY BEFORE THE AUCTION.

1) See the property in person during one of the dedicated Open House dates that Auction.com holds or have any real estate agent show it to you at your convenience - the sooner the better. Then determine how much you'd be willing to pay for it - THIS IS YOUR BIDDING CEILING AND STICKING TO IT IS THE KEY TO GETTING A GOOD DEAL.

2) Once you've come up with this, try submitting a "PRE-AUCTION BID" for the amount you're willing to buy it for on Auction.com if this option is available. If the bank that owns the home is ok with your PRE-AUCTION BID, you can get the property before it goes to auction for the amount you've already determined to be a discount to market prices.

3) If the PRE-AUCTION BID option isn't available for the property you want or the bank rejects your pre-auction bid, go to the auction and bid up to this amount again. If you're the winning bidder, the bank (not Auction.com) has the right to counter or reject your offer, just like any home seller. However, the bank now sees that there aren't any other bidders exceeding your PRE-AUCTION BID and your winning bid at auction so they'll be more willing to sell it at your price (the price you've determined to be a discount).

4) If the bank still rejects your offer, the home will likely go to a SECOND CHANCE auction held online at Auction.com. Again, bid up to the amount you determined to be your ceiling and if you're the winning bidder here, they're EVEN MORE likely to take your offer than before. But again, the bank may still choose to counter it or reject it. If they do, keep in mind that the banks are losing money on all of the homes they're selling at Auction.com so it's not a matter of how much money they are making on the sale, it's how much they're willing to lose on the home at this point in time. The more time goes on, the more willing they are to sell.
7 votes
Flag Mon Dec 29, 2014
David Chiles, Other Pro, Los Angeles, CA
Mon Mar 28, 2011
IT IS WHAT IT IS.... REDC is the closest thing anyone will ever get to a real market in their lifetime because they have the chance to say no without being coerced by someone else. IN ORDER TO GET A GOOD DEAL YOU HAVE TO DO YOUR HOMEWORK. There is a non-published reserve, sometimes it is an agregate amount and sometimes it is per property. The people behind the scenes have some wiggle room and can even help with financing if your qualified. Do not get caught up in the irrational exuberance of an auction and you may get a good deal, there is no guarantee. It is a good time. I cannot stress enough the ammount of self control you have to have to get a good deal because it is so fun. If you know what your doing you can get a good deal.
5 votes
Flag Mon Dec 29, 2014
Auction.conn…, Home Buyer, Los Angeles, CA
Sun Apr 10, 2011
This is from http://www.blog-auction.com


Downtown Los Angeles (DTLA) is thriving. My good friend Mike has lived there for years and is constantly raving about it. Having the benefit of visiting Mike on several occasions I quickly shared his enthusiasm for the area and decided to look for a loft of my own.

The rest of the world is catching on too. Since I started looking for a pad in downtown, I noticed glowing newspaper and magazine coverage of the DTLA scene. The media is raving about hip, cool, trendy, and foodie DTLA.

MY SITUATION: I frequently visit Los Angeles on business. I’m there at least one week per month – I’ve been staying at nice (not the best) hotels. After a year or so of shelling out big bucks for hotel rooms, it occured to me that I may benefit from the areas sliding real estate prices.

It wasn’t long before I found some great areas to live in DTLA for affordable prices.

THE HUNT IS ON: I’ve got a few bids on short sales in the area. But short sales are notoriously long – and the banks tend to keep you out of the loop. It’s an untraditional way of purchasing property - no baked cookies at the open house or big hugs from a happy seller.

I’ve felt in the dark most of the time. I wouldn’t charactorize myself as a “seasoned” buyer, but I’ve bought and sold a few homes over the years so I initially thought that this would be somewhat familiar territory…

While visiting an open house in the arts district (east side of downtown) an agent mentioned that the property would be auctioned off in a few days.

THE PLOT THICKENS: I liked the unit, the location and the building. I changed my plans to fly home and extended my hotel stay. I went to the live auction (the one I was interested in was one of about 100 to be auctioned off) with my bank documents, checkbook, and bank check in hand. AND I WON.

My property was among the first to come up for bid. I observed how the first few were handled and within an hour the unit I was interested in was up on the block.

It’s somewhat blurry what happened next. Kinda like standing at the alter. There were guys in tuxedos in the aisles and a bit of praying going on.

I had a dollar limit in mind and just before the final drop of the gavel – I blurted out my offer.

“Great job”, “congratulations” and “good luck” were belted out by the staff as I was ushered out of the room by my new tuxedo-clad friends.

THE PLOT SICKENS: Among the reams of documents that I signed was an agreement that my “winning bid” was subject to the sellers approval. I was told that if the seller didn’t accept the bid, I would be notified and all my money would be returned. According to my documents the seller has 15 working days to get back to me.

Several days later I was surfing the web and noticed that “my” property was up on the online version of the auction website…Huh? Is this how they notify bidders that the seller has refused the auction? I immediately called the title company – they hadn’t been notified of the seller’s decision, nor had the auction-assigned representative from the bank…

I contacted the online auction company – I was given their legal office contact number and before I could get more questions answered the lady hung up on me. Rather than call their legal counsel (real estate lawyers are so 90′s) I checked out the front page of the auction booklet instead. Turns out that fifty percent of the auctions listed on the very first page of my booklet that were ”sold” at my auction were back up for bid along with mine. Hmmm at least I’m not the only moron in the world – I’ve got company! I wonder if my fellow suckers already sent out invitations to the house warming party too?

THE POST MORTEM:

I learned alot with my little foray into the auction world. Some points to ponder:

-According to the terms of the auction company, they can make bids on the sellers behalf. In auction terms that’s called a “shill” bid – apparently it’s perfectly legal. It says so right in the disclosure documents that I signed…of course it’s not legal in states where it’s not legal…it says that too.

-In some cases (like mine) the seller has an undisclosed reserve price and can deny your “winning” bid, and apparently put it back up for auction without notifying you. That tactic must be legal too. Legality and morality should do more than rhyme.

-If it sounds too good to be true…

THE CONTEST

Win five bucks if you have succesfully bid on and won property. Tell me your success story and I will pay the first ten folks. If you’ve had a similar experience to mine, share it here – it is good therapy.

I feel better already.
Web Reference:  http://www.blog-auction.com
2 votes
Flag Mon Dec 29, 2014
John K, Both Buyer And Seller, San Antonio, TX
Mon Apr 4, 2011
Harout Khanjian,

What property did you bid on? I am just curious as I went to that auction also.

Thanks,
John
1 vote
Flag Mon Dec 29, 2014
Walter Willi…, Home Buyer, Pasadena, CA
Sun Apr 3, 2011
Auction.Com is the Biggest SCAM that has ever Existed!! I cannot believe that these people are still in business. We not only met, but also exceeded the reserve on a house we were bidding on by $42,000 and we were still denied by the bank 2 weeks later. This is a waste of time and I regret ever coming across these people. I am doctor and my wife a lawyer, we were both very aware of the details of the contract and the legalities that surrounded our transaction. We transfered $15,000 as our earnest money deposit to the closing company in order for our offer to be submitted to Fannie Mae Bank. After waiting 15 business days(3 weeks) they called to inform me that the bank rejected our offer even though i exceeded the banks reserve by $42,000. The reserve they set is BS! Why would they have to wait 15 days to decide whether or not the price i gave them is worthwhile for the property?? The reason why the wait 15 days is because your earnest money deposit goes into their high yield savings account and while you are waiting for a response they are collecting interest on your earnest money deposit. 15 days later they deny you and hundreds of other but walk away with thousands in interest collected by peoples earnest money deposit. These people are not out to give you a deal on foreclosed property, they are out to get market value and more for the property and conduct business like good old fashion crooks! Take my advice and stay away from Auction.com. I don't know anybody who has ever purchased a home through these people. Get yourself an agent and do the home hunting yourself.

***If you have any complaints....Please Add to this Yelp Page on Auction.com***
http://www.yelp.com/biz/auction-com-redc-irvine#hrid:XbiBX2O…
1 vote
Flag Mon Dec 29, 2014
Maria, , Los Angeles, CA
Sun Mar 27, 2011
I went to the acttion at the Los Angeles Convention Center, started at 8AM, registration, the auction itself started at 9:30AM. It was AWFUL! Everything very deciving, changes made on the spot, just before 9:30AM if you drove all the way because of a specific property, you may get there to find out the property is no longer for auction. The improper loud music bef ore the auction is just umbelievable, they tell you to make sure to read the disclosures, everything is agains you, but you can't due to the incredible loud music. A lot of typing mistakes or was it just incompetence of the person gathering information. She auctioneer pushed, pushed the prices way more then the property is worth, I am sure they had inside bidders (nor real, just to push up the prices), anyway it was awful awful day, the auctioneer screems the entire day words that are not understandable, bla,bla,bla, there wre unplished minumums, winning bidders must be accepted by the seller (bank), I met a few investors there, they didn't purchase anything, as everything was hicket up prices, but the poor uninformed bitter that was not able to read the materials before auction due to loud music bought overpriced properties. Summarizing not worth, I didn't buy anything, wasted my gas, had to listen to this screeming auctionner for 6 hours, I coverd my ears, but it was so loud it didn't make any difference. I advise anyone to bring ear plugs. Banks are banks, the auctioneers were awful. Never again!
1 vote
Flag Mon Dec 29, 2014
Mike, Home Buyer, California
Mon Aug 30, 2010
You can sometimes get a discount, however the REDC auctions are highly deceptive. The advertised starting price of the house was never even remotely close to the price that the house 'sold' at - even when there were no bidders at all. The auctioneer would simply pretend that he saw someone bidding and call up the price. Or one of the suited assistants would run up to someone and pretend that they were bidding even though they weren't (talking to them afterward confirmed that they weren't bidding). At the auction I went to I'd guesstimate that half the properties had no real bids whatsoever, but you wouldn't know that from watching the auction itself. If you are seated in the auction area it's really impossible to tell that REDC is scamming you in this way, especially near the beginning when it is crowded.

REDC does have a disclaimer hidden in the depths of its Terms that they can bid on behalf of the seller. However if you're trying to read the terms, even in the time before the auction, it's quite difficult because of the distractingly loud music and guys talking over speakers at you.

The auctioneer himself never stated that he was buying on behalf of the seller which is unethical. The part where he pretends that there are other bidders in the room is simply lying and should be illegal. As I understand it (no law expert, this isn't legal advice) California made a law barring auction companies from packing the audience with shill bidders... so now they just pretend to see bidders where there are none. I don't know if that's strictly illegal but it certainly is appalling.

I couldn't tell you what happens if you win an auction. The one that I bid on the auctioneer pretended to see another 100,000 or more in scam bids before dropping the gavel on the auction without mentioning the magic word 'sold'.

A friendly real estate agent told me that the details of the property provided by REDC were also incorrect (square footage) although I was unable to verify. The pictures provided are usually completely inadequate - one exterior shot, nothing on the interior. And some of these homes have major, deliberate damage. The property that I was interested in I went to the open house on two of the three listed viewing opportunities and on both occasions the property was locked. I asked questions of the agent listed on REDC and he completely ignored them whilst demanding proof of funds information from me.

If you want to bid on one of their auctions then I recommend watching how the auction works first for at least an hour. Try to stand on the sidelines near the front so you can see who is bidding and confirm the shill bidding for yourself. Make sure that you know what you are comfortable with paying from the property and don't get caught up in the auction hype (another reason why watching the auction for a while before you bid is a good idea). The real 'minimum' bid was probably close to 50% of the bubble high 'last value' on the listing (I imagine this varies both with house quality and location so your area may be different from mine.) My impression was that the people getting the deals were real estate types that knew the local markets really well.

Be aware that REDC isn't trying to find a 'fair value' for these houses. They are trying to rack the sales price up as high as possible even if it takes deception and giving inaccurate information (perhaps that's accidental, perhaps not).

Also the homes that don't sell early in the auction sometimes get thrown back into it. Supposedly this is because whoever won the auction the first time didn't have their paperwork in order. One can't help but wonder if an unethical auction house might not test the market with the first auction, push too hard and freeze out legitimate bidders and then send the house back in for another shot at the same buyers a bit later on on? I doubt REDC would employ such tactics though, would they? Anyway this home re-cycling helps add to the length of the auction so if your home is near the end you've been being bombarded by the loud speakers for half a dozen hours. Make sure you don't get tired and make mistakes.
1 vote
Flag Mon Dec 29, 2014
Citizenjane, Home Buyer, Denver County, CO
Sat Jul 31, 2010
REDC has 'real, live auctions' where you physically attend. They also have 'On-line' live auctions, where you sign-in online. Then they have something called a "Pre-Auction" bid process which I do NOT understand; what is the purpose? Can I actually 'win' a property here?. AS WELL AS, something called a "FLASH auction'. What is that? Who knows??? maybe somebody at REDC knows, but GOOD LUCK getting a straight answer!!!

It would be BEST if these jokers would simply have a glossary so you could search a term included on their site and get a complete, clear definition. Ah, but if the buyers/bidders actually understood what was going on with these different online venues, that might cause REDC to lose some control. Best to keep the public in the dark!

One plus is that the actual on-line auction is thoroughly explained in the pdf download. Very clear. And I have attended a live REDC live auction. Compared to other auctions, I have to say this is not my idea of a 'fair' auction. But remember, government agencies, like Fannie Mae who now own properties have apparently contracted EXCLUSIVELY with REDC to sell the inventory of houses and other real estate owned by financial institutions. So there's no competition in the auction process. Why would REDC have any incentive to make their website ACCURATE, clear, user friendly, etc? No. No. They want to control the prospective buyer. I found things like wrong auction dates on-line, no explanation of lot or acreage size, or simply if there was any 'dirt' at all included in the transaction. Yes the 'manufactured house' was for sale, but NO INFORMATION ABOUT the dirt the house was located on. Do you have to pay 'rent' on the dirt? What about HOA dues? There is no hard and fast rule about disclosing these on REDC's site. Sometimes HOA fees are there, and sometimes they aren't. What about back taxes? Yep, that's up to you to find out. Oh, and here's a good one: Did you know Scottsdale AZ properties canNOT be found in Maricopa County? Nope the brave, wise folks at REDC have hidden Scottsdale Az properties in "Harris" county. Who knew? Certainly no one who lives in the Phoenix area and might be wanting to bid on Scottsdale properties. Maybe the BEST one on REDC's site is the WRONG dates for actual auctions. Overall, I'd say the REDC website is about 60% accurate. Don't count on it.
1 vote
Flag Mon Dec 29, 2014
Bananarama, , Phoenix, AZ
Sat Jun 26, 2010
Don't let the low initial price lure you into these auctions because REDC makes sure to drive the price up in $10K increments within seconds. I went to the Phoenix auction today and watched the floor carefully as REDC was taking "bids" when no one was actually bidding. Even if you "win" the bid, the bank can choose not to accept your price - that's not really an auction, it's just allowing the bank to see the highest offer and decide whether they will keep it on the open market or not. The prices were no cheaper than what's listed on the MLS and in some cases a lot higher. Don't be a panic buyer, this market will stay low for a long long time.
1 vote
Flag Mon Dec 29, 2014
John, Home Buyer, Massachusetts
Thu Mar 25, 2010
Jllaco -Redco certainly tries to lead people to believe that they will get a great deal at one of there aucions. As far as your experience bidding $26k on a $112K house maybe you can explain to all the "stupid " posters what your point was of bidding that amount if you knew you wouldn't win.
My latest REDCO story? Bid $118K on a beach condo in Panama City about 6 months ago. I was outbid-i believe the winner was about $125 or 130. Redco/The Bank obviously thought that was not high enough. (Remember that 5% Is added to that number) Saw the same place on Trulia yesterday- asking $125k as a shortsale.
1 vote
http://nypost.com/2014/12/25/lawsuit-targets-googles-auction-com/

auction.com is FRAUD

"many have been scammed by this company" " This company is a sham"
Flag Mon Dec 29, 2014
Rg, Both Buyer And Seller, Illinois
Sat Feb 13, 2010
We bought a house & a condo on two different auctions. We saved big bucks & bought the condo for 40% of the appraised value (not the previously valued that REDC advertises). You can get loans on decent properties even if REDC advertises a cash only sale. Line up the financing with a local bank (local for the property you're interested in). Our condo is in a resort vacation city.. We do not bid on properties we have not personally seen.
1 vote
http://nypost.com/2014/12/25/lawsuit-targets-googles-auction-com/

auction.com is FRAUD

"many have been scammed by this company" " This company is a sham"
Flag Mon Dec 29, 2014
wallyamosw7, Other Pro, New York, NY
Mon Dec 29, 2014
0 votes
George Cardi…, Agent, Tucson, AZ
Fri Nov 23, 2012
I purchased a property through the online auction on Auction.com earlier this year. I got a great deal on an investment property, but I would not recommend purchasing through Auction.com unless you are experienced in real estate purchases. This is definitely not for first time home buyers. The most important thing to keep in mind is that you are buying without the luxury of having any contingencies. If you change your mind or your financing falls through you can kiss your earnest money good bye. All due diligence must be completed prior to bidding.

On the date of the actual auction just bid your maximum price online and turn your computer off. About an hour later you will get an email and then a call if you are the highest bidder. The program appears to outbid you automatically so if you keep your computer on you will be tempted to continue bidding.

Again I can see how lots of people think they are a scam. If you have any doubts in the property or your ability to obtain financing DO NOT BID; simple as that.
0 votes
Flag Mon Dec 29, 2014
Lv Buyer, Home Buyer, Las Vegas, Las Vegas, NV
Thu Jun 28, 2012
I have been to multiple RESC auctions. I did not encounter a lot of the wild things I have seen in print. I dont know if they have changed their format but when I went they had both reserve price properties and non reserve price properties and that was usually clearly marked and stated. I in fact bought a property, closed on it and found over 12K in HOA back dues. I called and they were paid. What I have seen over and over is nuts who did not do their homework showing up and bidding wildly on properties they never took the time to view or comp. I simple build an excel spread sheet with value, cost to repair and maximum bid. I stick to those numbers.
In fairness I did have one incident where we bought a property and the check was returned two days later. Other than that I am comfortable buying at auctions. At least I know I get a clear title. I saw a lot fo rantings from a guy who listed a looong list of accusations against REDC, but when questioned further stated he has NEVER set foot in an auction because only the STUPIDS go there. That is one concern I have with the internet. There are a lot of self proclaimed"experts spewing all sorts of nonsense with no facts.
0 votes
Flag Mon Dec 29, 2014
Daniel Mcgra…, , Daly City, CA
Wed Sep 28, 2011
I have now purchased two properties from Auction. com and have no complaints. Since my last post, I bought another and am very satisfied with the service and result. Both homes were purchased far under original asking price, and I got exactly what I expected. The service was a bit slow, but we closed under 60 days on both. I don't understand how I can have two very good transactions, but the reviews here are not so positive. As long as you look at the home, have a good idea what repairs and updating costs will be, and stick to your price, it really is a fun way to go. I have bid on others, but never went over what I though was a good deal. It takes some homework and time, but it is well worth it if you are the winning bidder and the lender accepts your bid. If the lender does not and counters for more money, just say no and all your money is refunded in a few days.
0 votes
Flag Mon Dec 29, 2014
Where there is smoke, there is FIRE! Why would someone take the time to warn us? Would you for no reason? Should be a law against paying for fake reviews like these. All the scams do it. You have been warned! Proceed at your own risk!
Flag Sat Feb 22, 2014
Now this is an informed individual. I concur fully. I would rather go to an auction than mess around with short sales
Flag Thu Jun 28, 2012
Deb;), Home Buyer, Athens, GA
Sat May 14, 2011
I got a real good deal but then...

it turned out the house had already been destroyed..

They have lied to me several times

They have played me for a fool

I had paid for it in full before I found out and REDC has yet to return my money...

and I will most definitely have to get a lawyer to get this thing straightened out

save yourself a lot of grief and stay away from these crooks.
0 votes
Flag Mon Dec 29, 2014
David Chiles, Other Pro, Los Angeles, CA
Mon Mar 28, 2011
IT IS WHAT IT IS.... REDC is the closest thing anyone will ever get to a real market in their lifetime because they have the chance to say no without being coerced by someone else. IN ORDER TO GET A GOOD DEAL YOU HAVE TO DO YOUR HOMEWORK. There is a non-published reserve, sometimes it is an agregate amount and sometimes it is per property. The people behind the scenes have some wiggle room and can even help with financing if your qualified. Do not get caught up in the irrational exuberance of an auction and you may get a good deal, there is no guarantee. It is a good time. I cannot stress enough the ammount of self control you have to have to get a good deal because it is so fun. If you know what your doing you can get a good deal.
0 votes
Flag Mon Dec 29, 2014
Dede Erceg, Agent, Prescott, AZ
Sun Mar 27, 2011
Occasionally yes! However, more often, unless you are very educated about the current market, more people find auctions houses a disappointment, and much more expensive than they thought.

First off...many of the auction houses have already been marketed on the regular market and failed to sell, due to being overpriced or having too many issues. Recently, I met a buyer who purchased an auction house, and now finds out after the fact that he needs to put in a whole new well.... 10 to 15k in cost. OUCH!

Work with an experienced Realtor and a buyer will save more money than going to an auction!
0 votes
Flag Mon Dec 29, 2014
Taken By This…, Home Buyer, Seattle, WA
Thu Feb 24, 2011
Good thing you didn't buy. or you would have gone through hell like I have. Two years in a law suit to get a judgment agianst them and not be able to collect to day. They do this scam all over the country. They change their name and still keep their same location, 1Mauchly Irvine CA 92618. AKA NRLL East LLC, Land auction.com, NRPL, and now Auction.com and REDC. Buyer beware. We will be leining properties to be sold.
0 votes
Flag Mon Dec 29, 2014
Taken By This…, Home Buyer, Seattle, WA
Thu Feb 24, 2011
Clearly you have interest in the scam company. You poeple need not to post your hipe on line. This company rips people off all across the country. Change their names, AKA: NRLL East LLC, Landaution.com, NRPL, Auction.com, They milk people for money, sell crap property and get it back for pennies on the dollar, and sell them to the next victim all the time misleading and misrepresenting the property. We have a judgment aginst them and they havn't paid that either. They have doing it for years, and they need to be stopped.
0 votes
Flag Mon Dec 29, 2014
John K, Both Buyer And Seller, San Antonio, TX
Sun Feb 20, 2011
Elvis Perez Posted This:
"BEWARE THEY TOOK 5,530.00 OF EARNEST DEPOSIT ...FIRST THEY QUALIFIED ME AND A MONTH LATER THEY SAID NO SOO ACTUALY STOLE MY ONLY MONEY ME AND MY WIFE, 2 KIDS HAD."

Elvis, if that is the only money you have, you shouldn't be buying anything, except food and shelter for your family.
0 votes
Flag Mon Dec 29, 2014
John K, Both Buyer And Seller, San Antonio, TX
Sun Feb 20, 2011
They do RESERVE auctions! Some poster said it wasn't a "REAL" auction! I am not sure what they are talking about, it s a 'REAL" auction, it is just a reserve auction not an "ABSOLUTE" auction. An "ABSOLUTE" auction is one where there is no reserve.

So please, educate yourselves to how these auctions work, before condemning them, otherwise you may just come across as naive and ignorant. That said, I do think they (REDC) are slimy salesmen and have things set up to influence and manipulate the Buyer to pay as much as possible. Can't blame them, that is their job - to make as much money for them and their clients (Sellers/Lenders, etc.), as possible. Don't be naive to think that they will make it easy for you to get a "steal" on a property. You may be able to, but you have to educate yourself and be prepared.

I have read some comments regarding the previous value REDC lists in their materials. Once again, you are being naive and ignorant if you rely on a Seller to tell you how much their product is worth. But, once again, I don't think they are doing anything wrong, but I think they are slime and purposefully misleading - BUYER BEWARE

I have won multiple properties at a couple of auctions (REDC and other auction companies), only to find out the Sellers did not accept my winning bids. But, I was kinda expecting that. As a result I will not be attending anymore of their auctions, I have more productive things to do with my time.
0 votes
Flag Mon Dec 29, 2014
Dhmgolfer, , San Francisco, CA
Tue Feb 1, 2011
REDC is not a scam. I have purchased one home and been turned down on another. Most of the homes for sale are Fannie Mae foreclosures. At first, Fannie Mae was taking just about every high bid. REDC was claiming an 87% success rate. Two things have changed. Fannie Mae is no longer taking every bid and is turning down almost all low bids. On both properties I was the winning bidder, I got a call two weeks later telling me that my offer was rejected and that I should consider a higher offer (reserve price!). I said no in both cases. One offer was finally approved, and my money was returned in a few days on the other one after being told they have rejected it completely. Also, I notice now that we are constantly being informed that all winning bids are subject to seller's approval. In short, REDC is nothing more than a real estate firm who has a unique way to sell their listings. FYI....the one property I did "win", was on the market for 165k. I got it for 112k out the door. Great deal.
0 votes
Flag Mon Dec 29, 2014
Elvis Perez, Home Buyer, Miami, FL
Mon Jan 31, 2011
BEWARE THEY TOOK 5,530.00 OF EARNEST DEPOSIT ...FIRST THEY QUALIFIED ME AND A MONTH LATER THEY SAID NO SOO ACTUALY STOLE MY ONLY MONEY ME AND MY WIFE, 2 KIDS HAD.
0 votes
Flag Mon Dec 29, 2014
Clara, Home Buyer, Los Angeles County, CA
Mon Jan 24, 2011
This is crap! I went to bid on a property in an on-line auction. I happened to know that there were squatters living illegally on the land, that there were bodies buried there, and that it was in a terrible neighborehood, and furthermore the house was uninhabitable. It was listed as a house on acreage. The bidding started at 19K and I thought I'd sit back and see how things played out. Thank God I was not in the auction house described below, but within 12 hours the bids were up to 74K, RESERVE NOT MET. I asked if this was the owner bidding over and over again and the "chat" would not answer except that the owner could bid against himself to increase the score. I was nearly verbally abusive on the chat line, "What is the point of bidding agaisnt yourself and you don't even know there is an actual human willing to evict, unbury the dead and deal with the neighbors, not to mention build a new house and cart off no less than 5 manufactured homes to the dump. The chat guy responded "You can always bid higher!" Yea. You betcha. Good luck.
0 votes
Flag Mon Dec 29, 2014
Meganm, Home Seller, Irvine, CA
Mon Nov 22, 2010
As it states in the terms and conditions, we bid on behalf of the seller, and this practice is common knowledge and occurs at most real estate auctions as well. Similarly, It is the seller who determines the price they are willing to let the property sell for. Finally, we make no claims as to the current value of the home, only the previous value.

There's a reason Auction.com has sold over $1.6 billion dollars in assets this year. Trust.
0 votes
Flag Mon Dec 29, 2014
J Bond, Home Owner, Gloucester County, VA
Mon Nov 22, 2010
My husband and I went to one(Auction.com auction) a few weeks back...WHAT A JOKE! He sat inside while I stood outside the door with our baby. It was a total circus act! The clowns just forgot to put on their costumes! Oh, and the property we were there about, although they say "must sell" has been on the "second chance" auction block at least 3 or 4 more times just in the last couple weeks. We have cash, they just have people running up the bids to ridiculous amounts. There is no way anyone with half a brain would pay even half of what the say it is worth. Oh, and the joker who comes in carrying his "Redskins" lunchbox acting mentally retarded is another of their clowns nibbing over peoples' shoulders!
0 votes
Flag Mon Dec 29, 2014
Annie Higbee, Agent, Owls Head, ME
Wed Nov 10, 2010
I had a bad experience with them as a broker for my client bidding on a property in MAINE. We were the highest bidder and "won" the auction. Yet the seller (BOA) did not like our bid supposedly and it got kicked out. The contract paperwork was incorrect and the escrow co. was unaware of it's intentions. Overall, a BAD experience and I would not recommend.
0 votes
Flag Mon Dec 29, 2014
Miss Etta, , Arizona City, AZ
Sat Aug 28, 2010
REDC allows its sellers (including Fannie Mae) to place shill bids during online auctions. I will give you an example of a shill bidding pattern:

1465 E John L Ave Kingman, AZ 86401

Auction start date: 23August2010
Auction end date: 28August2010
Opening Bid: $9, 000

Bid 1 - 9k
bid increment: 2.5k

Bid 2 - 11.5k
bid increment: 2.5k

Bid 3 - 14k
bid increment: 2.5

Bid 4 - 16.5k
bid increment: 2.5 k

So now the "current bid" is 16.5 k, and the next bid would have been 19k. The price is too high. Well, I check back a day later, and suddenly, the last two bids have disappered. The "current bid" is now displayed as 11.5k!!!

I write in to their online chat center and am told that the bids were revoked at the bidder's request. I ask how this is possible. Can I bid and then revoke my own bids too? No, I can't. I ask if the bidder was an agent of the seller, and get no response. The customer service rep simply refuses to respond to me. At all.

The above example is one of 4 suspicious auctions that I was tracking all on the same day.

Here's another example:

1568 Palma Rd Bullhead City, AZ 86442

Auction start date: 23August2010
Auction end date: 28August2010
Opening Bid: $15, 000

Bid 1 - 15k
bid increment: 2.5k

Bid 2 - 17.5k
bid increment: 2.5k

Bid 3 - Initially displayed as 26k, changed later to 25k
bid increment: 1k

Bid 4 - 35k
bid increment: 1k

Bid 4 - 42k
bid increment: 1k

Why would anyone bid at increments 8-10x the minimum amount? This is for a house that "should" have sold for no more than $25k, based on recent historical bid prices for similar houses in the area. The seller is trying to do two things: Trick people into overbidding, and tamper with official "bid results", making it appear that these houses are going for much more than they really are.
0 votes
Flag Mon Dec 29, 2014
Meganm, Home Seller, Irvine, CA
Wed Aug 25, 2010
@CitizenJane It can be confusing figuring out the different ways to bid for property. That's why I wrote this article on our new blog. Hope you find it helpful....
0 votes
Flag Mon Dec 29, 2014
Dhmgolfer, , San Francisco, CA
Thu Aug 5, 2010
First off, they are not a true auction. If you are the highest bidder, your offer is submitted to the seller and the seller can counter offer or accept your bid. I just "won" a home for $105,000 (not including the 5% commission I pay to REDC). I was told my offer would now be presented to the seller for approval. Needless to say, I thought I had "won" the home and was quite surprised to hear they would submit it for approval. I just got a call from REDC that the seller has refused my bid but may be agreeable to $137,500. I refused and asked for my money back (the 5% you have to pay up front). This makes REDC nothing more than a real estate company since all bids are submitted to the seller for approval. I won't be using their service again.
0 votes
Flag Mon Dec 29, 2014
Lisa Kitlas, Agent, San Diego, CA
Thu Jul 29, 2010
With knowledge of the specific market, a purchase at an REDC auction can be a solid investment. Many people are intimidated, however. I've sold real estate in San Diego County for (27) years, and it is a just one of several pools of properties that certain clients with specific qualifications should consider.
0 votes
Flag Mon Dec 29, 2014
David Chiles, Other Pro, Los Angeles, CA
Wed Jul 28, 2010
Thank you for your question about real estate auctions and whether or not you 'really geta a discount to current market prices?'

You really get a discount to current market prices on a property if you are the winning bidder with a bid that meets the sellers reserve price and is below market price.

To make a winning bid below market price and above the sellers reserve you must be an educated buyer. Being an educated buyer requires research prior to the auction. Furthermore, you must have the strength to stay away from the irrational exuberance of an auction and bidding more than a predetermined price.

Therefore, yes you can get a good deal at an REDC auction but you have to do your homework first.
0 votes
Flag Mon Dec 29, 2014
Meganm, Home Seller, Irvine, CA
Wed Jul 28, 2010
There’s a reason REDC has sold $6+ billion of foreclosed properties since 2007. Trust.

http://www.auction.com/REDC-Scam.php
Web Reference:  http://auction.com
0 votes
Flag Mon Dec 29, 2014
hyper12, Home Buyer, Fresno, CA
Sat May 29, 2010
I haven't personally been to an auction, But I did win the online bid with REDC...It was scarey at first I sent the earnest money in the given amount of time. However the Seller rejected the offer because the reserve had not been met. My money was returned to me within a couple days (actually the cashiers check I sent was never cashed). My heart was broken and then one evening out of the blue about a month later I recieved the signed purchase agreement from the seller ( they had changed thier mind and accepted my offer). It took about 45 days to close, but here I am in my new home and I love it...I paid 106k and my home appraises for 116k when the market goes back up I will be looking real good. I would recommend REDC to anyone looking to buy.
0 votes
Flag Mon Dec 29, 2014
The Little G…, Home Buyer, California
Tue Apr 20, 2010
To start with the conclusion , REDC sucks, and they should be shut down. After winning a property at an auction, they referred me to an escrow company. No one was to be reached at REDC anymore . By the end of the escrow the seller still didnt sign all documents therefore we could not close. REDC is legally representing the seller and makes a hefty 5% of the price paid by me, the buyer.
However they simply wont mediate and compel the seller to close on time. So now the transaction is in limbo, the escrow holds 126K of my money interest free and REDC is calling me everyday with a recorded message threatening to take my initial deposit if I dont close escrow in time.
When I called them, I got to a "Closing specialist" answering machine, 2 days later she still didnt call back...

I will have to contact an attorney, file a complaint with the dept of real estate , etc...
I thought the buyer was well protected in CA during these litigious times, but despite the 33 page contract , buyer still can be ripped off by unscrupulous corporations with armies of attorneys on payroll, so beware.
To conclude, REDC are a bunch of incompetent morons that simply wont do their job. Take your hard earned money somewhere else.

PS
To make matters worse , there is no final inspection of the premises before closing, so if a fire or flood happened in the meantime , you, the buyer must deal with it at your own expense.
0 votes
http://nypost.com/2014/12/25/lawsuit-targets-googles-auction-com/

auction.com is FRAUD

"many have been scammed by this company" " This company is a sham"
Flag Mon Dec 29, 2014
Jllaco, Both Buyer And Seller, Gaastra, MI
Wed Apr 14, 2010
Hi David,
If you were the high bidder but have not yet signed the contract, you are not obligated to do so, they will allow you to back out and give you your check back. A few people did it at the auction I went to.
Just as a follow up on my property, I have closed and already started work on it. On the one hte bank decided to reject, I made a counter offer and they responded with a counter...we were close but I decided I did not want ot go any higher.
0 votes
http://nypost.com/2014/12/25/lawsuit-targets-googles-auction-com/

auction.com is FRAUD

"many have been scammed by this company" " This company is a sham"
Flag Mon Dec 29, 2014
David Burton, , Woodridge, IL
Wed Apr 14, 2010
Jljl1992 (or anyone else)... I just "won" an REDC auction where the reserve was not met... They are looking for me to sign a contract and wire funds within 24 hours... Am I obligated to do so?...
0 votes
http://nypost.com/2014/12/25/lawsuit-targets-googles-auction-com/

auction.com is FRAUD

"many have been scammed by this company" " This company is a sham"
Flag Mon Dec 29, 2014
Roberto, , Allentown, PA
Mon Apr 5, 2010
The biggest scam and waste of a whole day. I bid on a house won the bid did paperwork for 2 hours following it and find out a week later that the same house is online for auction and never heard a word from the bank or got the money back to this day. Actually 140 of 147 houses were put back up for the online auction talk about a waste of peoples time if you only sell 7 houses all day and have 147 people do all the paperwork as if they are buying a big waste if you ask me. also about 30 people congratulate you after you win the bid i should have known something was up then. I advise go to a real auction where the want to sell the stuff after all it is an auction if the banks want top dollar then keep it listed with a realtor for 4 years!
0 votes
http://nypost.com/2014/12/25/lawsuit-targets-googles-auction-com/

auction.com is FRAUD

"many have been scammed by this company" " This company is a sham"
Flag Mon Dec 29, 2014
Dale Peterson, , California
Tue Mar 30, 2010
Yes, I have been to 6 live auctions - won zilch. On-line auctions, finally won one property. great deal, needs work however, I am a contractor and is exactly what I am looking for. REDC was professional and Escrow Today completed the transaction on time and kept me informed throughout the process.
0 votes
http://nypost.com/2014/12/25/lawsuit-targets-googles-auction-com/

auction.com is FRAUD

"many have been scammed by this company" " This company is a sham"
Flag Mon Dec 29, 2014
Jllaco, Both Buyer And Seller, Gaastra, MI
Sat Mar 27, 2010
As you know, it's an auction, when nobody is bidding against you, it is difficult to go any higher. I was bidding a lot, not a house. I truly didn't expect it to be accepted and would have been pleasantly surprised if it was. I was notified on Monday that my bid was rejected and had the $2500 deposit back in my account by Friday of the same week.
If you read some lucky winners comments, I think they do believe they got a great deal. But don't expect the banks to "give" them away!
0 votes
http://nypost.com/2014/12/25/lawsuit-targets-googles-auction-com/

auction.com is FRAUD

"many have been scammed by this company" " This company is a sham"
Flag Mon Dec 29, 2014
Dede Erceg, Agent, Prescott, AZ
Tue Mar 23, 2010
Hi

I have been to the Phoenix REDC Auction. It is fun, face paced and can be easy... IF you read ALL instructions and contracts completely before attending...recommend that you have a real estate professional assist you with your first experience with REDC.

Dede
0 votes
http://nypost.com/2014/12/25/lawsuit-targets-googles-auction-com/

auction.com is FRAUD

"many have been scammed by this company" " This company is a sham"
Flag Mon Dec 29, 2014
Jllaco, Both Buyer And Seller, Gaastra, MI
Tue Mar 23, 2010
Some of the responses on here are just plain stupid. REDC runs the auction, the don't set the reserve, they just do what the seller wants them to do. If they are instructed to start the bid at $1,000 and bid on the sellers behalf up to $50,000, that's what they do. If you are disappointed that the bank didn't accept your "winning" bid, oh well! There is nothing stating they will accept a bid of 30% true value. I too was high bidder on a piece of property recently marketed at 112k, i was high bidder at 26K. Did I think the bank was going to accept it?? NO, did they?? NO, I would like to make a counter but its their decision to try to get me up to a reasonable price or remarket the property.
0 votes
http://nypost.com/2014/12/25/lawsuit-targets-googles-auction-com/

auction.com is FRAUD

"many have been scammed by this company" " This company is a sham"
Flag Mon Dec 29, 2014
Msibus, , Diamond Bar, CA
Tue Mar 16, 2010
REDC auctions are real, however you have to know how they operate, and not get caught up in the circus
atmosphere.....the crowd comprise, buyers, brokers, schills for the company, and professional investors.

I have a couple of buddies who arre brokers...who go, keeping in mind these guys have been doing business for 30-40 years and they might pick up 1-2 house or none....that they can rehab and flip for
20-30k over aquistion cost & rehab cost.

The same hold true of trust deed sales.....you have to know what you are doing or you will over pay
or buy a pig in a poke.........

Mark E. Sibus
Home Hunter Inc
RE Broker 30 years
msibus@earthlink.net.
0 votes
http://nypost.com/2014/12/25/lawsuit-targets-googles-auction-com/

auction.com is FRAUD

"many have been scammed by this company" " This company is a sham"
Flag Mon Dec 29, 2014
Jljl1992, Home Buyer, Florida
Tue Mar 2, 2010
REDC is a joke. They shill bid against you, to raise the auction price. Also if you bid, & the highest bidder and the reserve is not met. They call you after auction to tell you won the piece of property and you are told you have to send contract and wire earnest money within 24hrs from receiving their confirmation email regarding the property auction, when ended. If you read terms and conditions, you do not have to do so if reserve is not met. They threatened me that if I didn't send contract and wire earnest money, they would charge me with punitive damages. It is ashame that the large institutions are using this company. BEWARE and read everything...........
0 votes
http://nypost.com/2014/12/25/lawsuit-targets-googles-auction-com/

auction.com is FRAUD

"many have been scammed by this company" " This company is a sham"
Flag Mon Dec 29, 2014
David Alex W…, Agent, Newport Beach, CA
Sat Feb 20, 2010
Buyers beware: even the winning bids get rejected by the banks and they call you a week later to tell you that they reject and want thousands more. If you get mad...yell at them...if you get really mad..swear.... "Mark Twain"

Study hard because a lot of these you have to chase out more than RATS...
0 votes
http://nypost.com/2014/12/25/lawsuit-targets-googles-auction-com/

auction.com is FRAUD

"many have been scammed by this company" " This company is a sham"
Flag Mon Dec 29, 2014
Chicks Fix, Home Buyer, San Juan Capistrano, CA
Sat Feb 20, 2010
I've been to two of the REDC auctions. I think they are a good educational experience for newer investors. If you do go to bid, know your limits on what you want to spend for each property, know the comps (if you can preview the home) and don't go over that amount. I bid on a few dozen homes and someone exceeded my limits every time. I think there are much better ways to buy homes, including teaming up with a good REO agent or making offers on short sales. Good Luck!
0 votes
http://nypost.com/2014/12/25/lawsuit-targets-googles-auction-com/

auction.com is FRAUD

"many have been scammed by this company" " This company is a sham"
Flag Mon Dec 29, 2014
http://nypost.com/2014/12/25/lawsuit-targets-googles-auction-com/

auction.com is FRAUD

"many have been scammed by this company" " This company is a sham"
Flag Mon Dec 29, 2014
John, Home Buyer, Massachusetts
Sat Feb 20, 2010
Here is one for you. I bid on an online only auction held by REDC for a condo in York ,Maine. I won. About two weeks later i am told the bank rejected my bid. (no counteroffer or anything else with the reponse). Guess what -the condo is up for auction with another company. Don't waste your time.
0 votes
http://nypost.com/2014/12/25/lawsuit-targets-googles-auction-com/

auction.com is FRAUD

"many have been scammed by this company" " This company is a sham"
Flag Mon Dec 29, 2014
Windermere R…, , El Sobrante, CA
Thu Feb 18, 2010
I went twice to one in Oakland Ca, I would never expose my client to the craziness that took place. Loud, people blowing whistles and running up in your face pushing you to bid up. Yo can get just as good a deal if not better on the street. The caller would raise the price even though no one bid.

Mike Rowland
Windermere Rowland Realty
510-222-9150
0 votes
http://nypost.com/2014/12/25/lawsuit-targets-googles-auction-com/

auction.com is FRAUD

"many have been scammed by this company" " This company is a sham"
Flag Mon Dec 29, 2014
Tony Collings, , 33764
Thu Feb 18, 2010
Yes, I have been to many...Do not waste your time. You can get a better deal in a short sale or REO
0 votes
http://nypost.com/2014/12/25/lawsuit-targets-googles-auction-com/

auction.com is FRAUD

"many have been scammed by this company" " This company is a sham"
Flag Mon Dec 29, 2014
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