Home Buying in Alum Rock>Question Details

pam, Home Seller in 95148

Can I bid on a bank-owned home at AUCTION.COM? Is it much safer than a trustee auction?

Asked by pam, 95148 Wed May 30, 2012

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Kawain Payne’s answer
Hello Pam,

Auction.com actually does REO auctions as well as trustee sales.

Please keep in mind auctions are where you buy a home as is. In some cases you do not even get to view the property prior to bidding on it.

If you are new to the auction gamem, you should attend a few auctions first and watch the process. It is a bit much to try and take on for the first time on your own.

Most of the homes sold at these auctions go to deep pocket investors, who have reps at the auctions weekly bidding on and buying properties fro them. Also note Trustee auctions are CASH sales. Some REO auctions do allow financing.

You should also note if you buy a home at an acution with liens on it, you own the liens too.

So do your homework. Find out what homes will be up for auction, select the ones you hope to bid on, get yourself a nice rep at a local title company, and have then run a tilte report on the property. There will be a fee , but it is worth finding out if a home you hope to buy at auction has any clouds on the title.

Best of luck to You.

Kawain Payne, Realtor
1 vote Thank Flag Link Sun Jun 10, 2012
Let me start by saying that I am a flipper, and have purchased many foreclosed home through just about every way imaginable. Please, please stay away from bidding on Auction.com. I recently participated in one of their online auction. This is the worst "platform", or process of any online real estate auctions. I was the "Winning Bidder", 12/7/13 which translated in English means nothing. I complied with their ridiculous terms and conditions (Please Read Terms Fully) Sent my earnest money within the required time frame to Service Link (Closing Co) located in Pennsylvania, (I'm in Florida). After that I heard nothing. I had to place a call once a week to auction.com and got the standard runaround mushmouth BS congratulating me on being the winning bidder for three weeks, to which I requested a signed sellers acceptance... the response, let me check on that. Bid pending, was the answer. Now after 3 weeks have gone by, I get an email and a call letting me know my offer was rejected. Fine, I can accept that, it was a pretty low bid, so I ask for an estimated time frame in which I can expect my earnest money to be returned. This is when the real fun starts, 6 emails later and being informed that Auction.com has nothing to do with the return of my earnest money ($2500.00) I am shoved off to try and collect it myself from Service Link, Which has yet to respond. The moral of the story, deal local, if you don't bid on auction.com, or if the bid doesn't reach about 90% of market value it will revert back to the original list agent. Wait, and deal with a local Real Estate Agent and Title Company. Don't waste your time, or put yourself through the stress and aggravation. I have purchased other properties online through Williams and Williams and Hubzu, both closed successfully and without issue and their communication was significantly better than auction.com. I will post a follow up with how long the wait will be to get my earnest money returned.
8 votes Thank Flag Link Fri Dec 27, 2013
Hi I need honest help my mom had a stroke and now lives with me i am only 21 years old and my income is all we have i have no credit and i have 8,000 dollars i need to find a way to buy a house for this amount we live in oklahoma city ok please any advice thank You Brittney
Flag Mon Jul 18, 2016
I am a mortgage broker and have had the same situation a few times. Their escrow and title are in india somewhere i think. Either way it is a really messy purchase , if you ever close.
Flag Thu Apr 21, 2016
i have heard similar complaints about this company, which is why i have steered clear.
Flag Sat May 16, 2015
Before i bit to auction how much they need money in bank. I mean if I have $30K in my bank how far i can go for Bid?
Flag Sat Mar 21, 2015
to earlier poster about 90% of market value - Jim is talking about what happens if you *don't* bid at least 90% of market value on Auction; he's not advising to pay 90% of market value.. If Auction is the 1000 person company another poster says they are, it shouldn't be that difficult to get your money back when your bid is rejected. Appreciate the feedback & clearly it's not for newbies.
Flag Fri Feb 27, 2015
Thanks for info. really... your was the signal..
where is the right place for bid ? please share. thanks twice.
Flag Mon Jan 12, 2015
That's just ridiculous. A company that large isn't going to unlawfully keep people's money. This isn't a 10 person start-up we're talking about, it's a 1000 person company. Your struggles sound as if it occurred by random chance versus being the normal course of business for Auction which is why so many still transact on the platform.
Flag Sat Jan 10, 2015
You have been flipping homes for a while now and you are telling people to go through an agent. 90% of MARKET VALUE, are joking. You sure you know what you are doing?
Flag Mon May 12, 2014
Thank you for saving us time and money. Hope that it all works out for you.
Flag Fri May 2, 2014
Thanks for you input.
Flag Thu Apr 3, 2014
Hi Erika, and thanks for your post.

Okay, so let's talk for a second about Auction.com and about buying foreclosure homes, since I know your last questions have been solely about foreclosure home purchases. First, I just finished talking with representatives from Auction.com and reading their extremely extensive FAQs about their service. It's actually a very interesting model, and for those of us in the real estate industry, Auction.com does provide commissions to agents who bring their clients to the site and who purchase homes through this website. So they've thought of "everyone" that might be involved in a transaction, and have given incentives to agents to promote the site.

So essentially there are two main types of purchase vehicles to the Auction.com space. The first is a "pre Trustee sale" auction, and the second would be a "post Trustee Sale" auction. The first version is NOT a live auction but one in which the buyer is allowed a maximum of five attempts to buy a home at the seller's "threshold" price before the home is sold in a Trustee sale. This price would need to take into consideration the value of the foreclosing lien holder's claim plus any other indebtedness on the home that might survive a pre-auction purchase. Once a successful price is negotiated, it appears that Auction.com will help both the buyer and seller complete the transaction and stave off the trustee sale.

The second type of auction conducted by Auction.com is the post Trustee sale auction in which Auction.com conducts "live" auctions for banks and trustees. In this case, only "registered" users who meet specific cash and money requirements can be present to bid on a home. This is all live, so whoever wants to participate must plan to attend an auction at a specific location, date and time. In this case, it's a "real" auction, so buyers should plan to buy in person up to their preapproved amounts.

In all auctions, however, Auctions.com makes it very very clear that they:

1) provide NO guarantees whatsoever regarding the condition of the home
2) buyers can only buy homes with NO contingencies--so if you agree to buy, you cannot get out of it
3) no cooling off period--once you agree to buy, you're stuck even if the house is falling down--you bought it
4) auction.com is NOT a totally free site to buyers . Buyers agree that their "final price" will include a 5% fee to auction.com for their efforts in coordinating the sale. So if you buy a $200K home, for example, then you'll pay $10K to auction.com for their commission for a total purchase price of $210K for the home.

The advantages to this site, however, is that you can see ALL of the foreclosure homes for sale in an area on just one site (for free) and that's pretty cool. You can purchase a home on auction.com withOUT having to pay all cash for the home (as you would in a trustee sale). Sometimes--not always--the bank may consent to allowing the home to be "open" for review by the buyers, whereas you'd be buying "blind" in a regular Trustee sale. For the live auctions, you're buying from the bank, so all of the post foreclosure liens have been wiped clean--that would NOT be the case in a Trustee Sale on the court steps. So again, cool...

If buying a home without warranty and with no way to get out of the contract even if the house is collapsing seems appropriate to you, then auction.com is certainly a good way to get a house. Keep in mind, however, that there are ALWAYS inherent problems with buying a foreclosure property. You can minimize the problems by working with a Realtor even if you choose to work with auction.com. At the very least the Realtor can pull a preliminary title report for you on any pre-foreclosure properties and can go with you to help assess the value and conditon of homes prior to foreclosure auction.

So, again, Erika, don't do this alone. Get an agent to help you!!

Sincerely,
Grace Morioka
Area Pro Realty-People's Choice
Tel (408) 426-1616
3 votes Thank Flag Link Wed May 30, 2012
Yes you can but be very careful and make sure to at least drive by property. Many of these houses are on auction because they couldn't be sold the normal on mls with an agent way since they have very serious problems that are very costly. I have represented buyers on auction.com properties many times (they let you have an agent at no extra cost to you but at a hugely discounted commission to the agent). Make sure to really do your homework because if a deal seems way too good to be true it often is. Feel free to call me for more details.

Sincerely,

Douglas Thron
415 216 9206
AlumRockHomes.com
Keller Williams Realty Los Gatos
DRE 01300167
1 vote Thank Flag Link Sat Jun 28, 2014
i won a bid at court at auction .com in cary nc then 3 weeks later they send me a letter saying that an upset bid beat my bid and i lost the house after isold the house im in and they wouldnt give me a chance to out bid the upset bidder
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Flag Sat May 21, 2016
Run, don't walk away from Auction.com.

I was the "winning bidder" on an auction and thankfully did some research before actually signing the contract and sending the earnest money. What I found scared the heck out of me.

In my case the Seller of the property was NationStar. The property had been foreclosed on by B of A and B of A had sold the mortgage to NationStar but never transferred the title.The title itself was actually still in the name of the foreclosed party and B of A had never completed the title work to take possession of the property, probably because they didn't want the liability of the upkeep.

After jumping through the hoops at Auction.com I was told that this often happened and that the title attorney was working on the title and it should be transferred to B of A this week. I was also told that NationStar held a power of attorney for the property. I asked for a copy of this POA and told Auction.com that I could not enter into an agreement with a seller who did not hold title to the property. Their response was that without a signed contract they would have to realist the property, and would not provide me with a copy of the POA.

Their contract is completely one sided and dangerous from a buyer perspective. If you are contemplating buying a property have your attorney look at it. Once signed you have no recourse against auction.com or the seller (primarily NationStar mortgage) for performance of the contract. The contract also has other issues

- You state that you have had the sufficient time to inspect the property when none is allowed.
- You have had the opportunity to examine all title matters and waive any rights in this area.
- The seller may be selling the property "land only".
- Buyer has read, received, and approved a copy of a preliminary title report and the recorded master deed which are NOT provided when asked for.
- Seller has no obligation to remove any title exception, bear any expense to convey a clear title, otherwise make the title insurable.

I can go on and on about this one-sided terrible contract.

I believe it is illegal to attempt to sell a property that you do not hold title to and will be checking with my local Attorney General on the subject. I have purchased literally dozens of homes at sheriff auction, from private sellers, and through other REO services and will never use Auction.com again.

Buyer Beware!
1 vote Thank Flag Link Thu May 1, 2014
There is nothing safe about an auction since there are no title checks, no inspection reports, and you can't get inside the property before bidding. Sometimes the homes listed on Auction.com have the wrong picture of the home and address so at least do a drive by on the address given. Be prepared to have plenty of cash to pay for any liens, back HOA dues, property taxes, etc. Go to the court steps and observe the process, do research, get familiar with the inventory, also get an understanding of the sales on the offers accepted. Do you homework whatever you do.
1 vote Thank Flag Link Wed May 30, 2012
In my opinion Auction.com is not a reliable or user friendly way to buy distressed properties. Plus if you are the "winning" bidder they charge you a 5% sales commission. What a deal!
0 votes Thank Flag Link Sat Jul 12, 2014
riskier. You need to pay the fee. As is....
Often you are competing with same property on MLS.
0 votes Thank Flag Link Fri Jul 11, 2014
where do i go to bid on homes
0 votes Thank Flag Link Tue Jul 16, 2013
look for your county's clerk of court's website. They have foreclosure auction there.You can bid and buy property. This is the most legit one, because it is the govt. https://www.marion.realforeclose.com/INDEX.CFM?ZACTION=HOME&ZMETHOD=FORECLOSE
Flag Sun Dec 29, 2013
You can stay home to bid online at auction,com
Select the property you like, register then bid.
Flag Sat Aug 31, 2013
wat is the step on bidding on houses at auction.com
0 votes Thank Flag Link Tue Jul 16, 2013
I've just closed and bought a bank-owned occupied property at auction.com, with the help of my agent. It's been a long and stressful process, because the seller had no name as grantor on county records. Escrow, along with auction.com closing department accelerated the seller to provide the recorded Trustee's Deed, and then we were able to close after 2 and a half month. The property is more than 25% below the current market value. My only problem now is evicting tenants.
If I have chance to bid at auction.com again, I will. We have to do lot of title search and all cash in hand. .
0 votes Thank Flag Link Fri Mar 1, 2013
Auction.com disclose about a property more than when bidding at the court trustee sale. They even tell you if the house is occupied and you have to handle the eviction if you win the bid. After you do your search, you can bid online or at a live auction. You can drive by the house and search for the title. They even disclose the amount owed. It depends on the property, some are cash and some comes with finance available. They pay realtor if you work with a realtor just like when you buy new homes. The realtor needs to register with you. So why not work with the realtor? He/she can do all the preliminary work and due diligence for you free of charge?
Good luck,

Lang Lequang
Real Estate eBroker, Inc.
DRE# 01358981
Cell: 408-313-1119
Email: nocalhomes411@gmail.com
Website: http://www.nocalhomes411.com
0 votes Thank Flag Link Thu Feb 28, 2013
Remember that there is a buyer's premium over and above the purchase price. It might be as much as 10%
0 votes Thank Flag Link Wed Jun 6, 2012
Hi Erika,

Thanks for the post. Just one note...three years ago was early 2009, which was about the bottom of the market (the official bottom being about October 2008) so the environment was far different than it is today. The market has recovered and banks have gotten both smart and savvy about selling homes. They are no longer willing to "dump" homes for less than close to market unless the property is damaged. So again, be wary and careful when buying. It's not nearly as easy nor as lucrative to buy foreclosure homes today.

Sincerely,
Grace Morioka
Area Pro
0 votes Thank Flag Link Thu May 31, 2012
Hi Grace, thank you very much for your informations and advices. I'll definitely have an agent with me to bid the house I want.
I'd attended a private auction (Williamsauction.com) more than 3 years ago, and I bid on the house I am living right now. They also charged me 5% broker commission. I bid in front of my house on the day of auction, and that was the first time I saw my house.
The house turned out to be very nice now, and I'm happy with my choice.
I am closing my house anytime soon, and want to bid another house again.
0 votes Thank Flag Link Wed May 30, 2012
A trustee sale is an auction - you need cash to buy them at the end of a foreclosure process. Auction.com just lists auctions scheduled in your area that private auctioneers have set up. Totally different. As with any private auction, read the rules. They normally add a percentage to the winning bid as their commission.
0 votes Thank Flag Link Wed May 30, 2012
I may be wrong,
(I'm wrong a lot)
but I think that the homes you see on auction.com
are not the homes on trustee sales.

I've had people tell me to beware of real estate "auctions"
but then,
I've been wrong a lot.
0 votes Thank Flag Link Wed May 30, 2012
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