Anthony S.

Okay, so like many I stumbled across Auction.com and wondered if this was a scam when they asked for $2500. 00 for a bidding deposit. This is not a scan. HOWEVER, I encountered countless times of poor customer service, fees, unethical practice and misleading information.

Here is my story:

Mid-West Bank Foreclosure Under 40K

I was caught up in their computer bidding system and did not win the bid. I couldn't believe the bid went that high, but realized their computer was just bidding $2500 over what I entered. They even did a $5 over bid at the very end to "play the game." They kept adding 1 or 3 minutes to the "countdown" to keep me engaged. They made it seem like several investors were on the line and everyone wanted this hot poperty. Ha. I was called a week later and told I was the highest "real" bidder and I could make an offer. I made an offer and it was accepted by the bank who actually owned the property. (The reserve was way higher than value). I did call the actual bank and they told me I had to go through Auction.com... So that answers one question for you. I'll later explain how other properties hit the market on places like Realtor. Com months after being on Auction.com

I'm sure you looked through all of their Property Disclosure reports. They have all of these fancy reports I reviewed 10 times. I looked through everything on their Auction.com deck. I walked around the property, but could not get inside. Not until I actually paid the $2500. 00 and signed a purchase agreement did I get a report I had never seen. This report was filled out by the company who went in and secured the property. This was a hand written, fill in the blank type report that contained very important information like the roof leaked, holes in the walls, appliances gone, floors needed replaced etc... Information I assumed could possibly be wrong, but hoped for the best. They hid this information until I sent the signed purchase agreement. When I called I was transferred to a "hard sales" person who told me if I don't like it, then just bail out. So here I am... $2500 out of my account and I now find out all of these issues that will cost me 5-7K in repairs.

I had a decision to make... do I continue or jeopardize my $2500. 00. I moved forward, but was not happy and still not happy with them keeping important information from me until locking into the deal. Information they had months prior. If I would have seen that report prior to making an offer I would have came down about 5-7K in my offer.

So, it is my fault? Yes. Is it unethical, wrong, misleading and possibly illegal to hide known property information to a seller. Yes. They tell you as-is and have information to keep their side "legal." But is hiding information until the $2500. 00 clears illegal? They could have put that report on their website for me to see prior to making an offer.

During the process I was continuously moved down the assembly line. I would work with a team member for a few days and on to the next. I had 48 hours to submit information and then would wait days to hear back from the team. Basically, Auction.com is the middleman in a assemly line property transaction.

Fees: This part is still a mystery. No realtor, appraisal, inspector etc... Nothing. I asked about the fees at the beginning of the process and was told they could be $300 to $1500. I asked why would it be $1500... no realtor, no appraisal etc... I assumed it would be on the low end because I did my own title search and didn't request any additional work. I was wrong. So wrong.

They hit me with $1700+ on fees and told me I had no choice but to pay or lose my $2500. Their "closing" was $900... I was called on the "closing" day with the wrong lock box code numbers and eventually got the right numbers. I paid $200 for a title "search" I already did. I was forced to pay this when I had already completed this on my own. $200 for a title "exam." $175 for a title "curative," $75 for a "deep prep." $60 for a title "udpate." $25 "courier fee." $25 for a "wire fee". You pay your bank $25 for a wire transaction and then Auction.com charges you another $25 to accept your money. I'm not making this stuff up... I'm reading this from my closing document. There were about 8 fees that totaled the $1700+ and about $100 were actually legit fees like Deed prep and county filing fees. Once again, I was told I had to pay these fees or lose my $2500. I told them I wanted to choose my own closing Agency. I was told I had to pay $700 in closing whether I use my own or theirs. So basically you are going to pay the fees one way or another or lose your down payment.

Like I said, If I knew this info at the beginning I would have adjusted my offer. I was surprised by about 7K in repairs, fees etc. that they KNEW and shared after I signed deal.

Would I recommend Auction.com? NO.

If this information isn't enough to stay away, here are some tips:

Do not pay above or near the "reserve". I've seen several properties on Auction.com not meet the reserve and ended up on Realtor.com 10K less a month later. One real example was a property on Auction.com with a reservce of $34,500. This was on there for about three months going to "auction" every other week. I just saw the same property on Realtor.com for $25,000.

Expect Fees and new info after signing. Just plan on paying $1500+ in "closing" costs. And you might find out surprising info about the house after you sign and pay $2500.

Understand that Auction.com will make money through their "closing" fees. They will also charge the bank or home owner 5%. (*These numbers are on a under 40K house) So if you bid a property more expensive I imagine the fees are even more.

The closing docs. Showed Auction.com raking in $3-4K on the deal. They had the bank pay for all of their fancy reports and were basically the assembly line for the process.

In short, I overpaid around 7K for the property because they didn't disclose known information until after I signed the purchse agreement. I had to make a decision to lose my down payment or continue. I moved forward and obviously still upset about the process. They are like the cable company of real estate. Too good to be true.
Buy your properties at your local Sherriff sale, craigslist or even Realtor.com. You are going to pay the same fees and "closing" with Auction.com as you would using the standard method.

It was convenient I didn't have to meet anyone in person or go to a bank, but, I paid for it.

My final thought... Not A Scam, But Unethical, possibly illegal selling practice.