auction.com
Submitted by Vinay
from CA
- 01/19/2012 - 8:33pm
Seems like a lot of properties in San Diego are going to Auction.com. Does Auction.com maintain a reserve price? I seem to remember that they take the highest offer to the bank and get back to you. In other words, I thought this was more of a gimmick. Is this true?
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Yes - They have a "phony" opening bid. You don't know what the real beneficiary top bid will be. The auction is run more like a show.
All that given, the "real" opening bid is sometimes low enuf to attract bidding by the professionals. At any given auction, there are properties that go to 3rd party bidders.
The first time there - it will be hard for you to determine whether all bids are coming from real bidders or from the auctioneer bidding on behalf of their client/beneficiary. They also will intimate you need to bid $5K over the last bid. You can bid anything you want over the previous bid. After a while you will be able to tell whether the announced bids are still coming from the beneficiary or whether all the bids are now coming from real bidders.
I just want to reinforce the prior comment based on personal experience. I went to one of their auctions and bid on a property. When you start bidding one of the auction employees runs over to stand next to you and "help" you bid. I hit my limit and quit bidding and clearly told the auction employee I was not bidding any higher. However he continued to bid as if on my behalf although those bids were actually on behalf of the auction client. That said there are some OK deals there. Like any auction you have to decide where your limit is and stick to it.
I haven't had enough guts to call out a lower offer than the next step the auctioneer is calling. For example, auctioneer calls $200,000, someone raises their hand. Their next step is $205,000 and they keep going at $205,000 until the next bid. Sometimes when it comes to calling final call, they will then go 'anyone take it at $202,500". I haven't seen anyone yet call out $200,500 or $201,000 to see if they will take it.
HI GJ,
In all trustee sales the beneficiary (lender) gets to make the first bid which is the opening bid. The lender can substantially discount the opening bid and they can all bid as high as the amount owed on the foreclosing loan (published bid plus additional accrued interest). The lender can also instruct the auctioneer to do a low/high bid which means start with one amount and then bid as high as another amount. In most cases the auction.com minimum bid does not appear to have anything to do with the actual opening bid from the lender. It could be that the 205k is the actual lenders opening bid and they posted the 200k to get you to come to the auction. My guess is that you would only prolong the inevitable by trying to go lower.
Sorry, did not make myself clear. I meant to indicate that bidding had gone on for awhile (and assuming we are above lender opening). They continue to go up at 5,000 increments. I haven't seen anyone "offer" 1,000 increment by calling out when auctioneer is doing final call. It would be interesting to see if they would accept it.
I have seen bidders break the $5K increment protocol by calling out a lower number than the auctioneer "asks" for. And when there are two or more bidders in the crowd, I have seen them slow way down and go in $500 increments. This is only after they have apparently met the actual minimum and they are trying to get the bidders to bid against each other.
Auction.com is a JOKE & should be flushed out of the trustee sale arena. An actual trustee sale is first and foremost an OPERATION OF LAW. Someone's ownership rights, junior lien's rights, etc are being STRIPPED at that moment. This is no place for "hotel ballroom auction" clowns and their circus antics.
And I fail to see what the lender/beneficiaries think is the big advantage of bringing yet another vendor parasite into the process. The trustee companies (who are already handling the foreclosure, posting, etc) were doing just fine also handling the auctions at the courthouse. What purpose does it serve to pay another parasite in the process chain & spend additional $ on a renting a hotel ballroom, advertising, etc? Do they really think that all this extra "zazz" is going to bring the crowds/public? First off the trustee sales are mostly done by professionals because it requires all cash and other issues. The sales must be done during business hours during the week. These 2 dynamics alone keep away most of the public. It's like they're trying to apply the hotel ballroom REO auctions dynamic to this venue. It's retarded. These 2 venues are NOT the same. They can't turn the trustee sales into the weekend, hotel ballroom, REO sale circus. Another big reason the REO sales are so well attended is because there is FINANCING... and the lenders actually own those properties. At the trustee sale, there is no financing and the banks do NOT legally own the properties so can't just do what they want.
Little known fact: At those REO auctions, the "winning" bidder doesn't actually buy the property at that price, they have merely "won" the right to submit their offer at that price which is subject to approval, counter, or rejection.
REDC sucks!!
We also need to start lodging complaints with the state AG's office, local DA offices, and other govt enforcement agencies for deceptive practices, et al.
At a recent auction.com trustee circus, there seemed to be bids coming from nowhere. The bids were jumping but I could see no one actually bidding. So I got up and stood at the very back of the room and carefully watched all the bidders and sure enough, no real bidders were bidding but the auctioneer kept jumping the price.
Simplest solution: let's all boycott these silly masquerades until the lenders see that the extra cost and possible liability of the REDC hucksters is a mistake and that the trustees can handle the trustee sales just fine down at the courthouse.
Well, one thing I really like at the auctions is the girls... Esp.
the one with the big knockers. Have you seen her? Hot.
Christopher G. -
Since the fees and costs are set by statute - doesn't matter how much the benef. might be paying auction.com in extra costs. (Assuming they aren't violating the law.) As a practical matter, since the lender never comes anywhere near recovering its money - a junior lien or the home homeowner is not harmed.
As far as their REO sales - I thought it was well known that most of them are not sold. Some are (I know of one for sure in a bldg. where I had/sold a unit that I bot at a reg. sale on the steps.). Who is harmed by this activity? It may be frustrating to a newbie who doesn't know the game. Since they are looking for retail buyers and offer financing in many cases, I'm sure they put some deals together.
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