About Auction.com

If you’re looking to purchase a new property, you may have heard about Auction.com, which claims to allow you to buy and sell residential and commercial property in an online auction format. In fact, Auction.com claims to have sold more than $25 billion of residential and commercial real estate since opening its doors in 2007.

But when it comes down to it, can Auction.com really help you find your next real estate purchase, or is it just a way to scam you out of your hard-earned money? We sifted through the facts, and here’s what we found out.

How Auction.com Works

At its most basic, Auction.com claims to be a real estate marketplace that uses “world-class marketing and cutting-edge technology” to help bring buyers and sellers together in an easy to use format. All Auction.com real estate auctions—including bank owned and redemption properties, foreclosures, short sales, bankruptcies, bulk sales, and residential and commercial notes—are date and time-specific, so you’ll always know exactly when they’ll begin and end. In fact, in some instances, Auction.com claims that some of their properties may be newly available and not listed anywhere else.

Auction.com claims to work over 3 steps:

  1. Search for properties that meet your criteria, including by state, county, city, zip code, address, or property ID, and then save them as your favorites. You can also sign up to receive email alerts any time a new property that matches your criteria is listed.
  2. Once you’re ready, you can then register for the property’s auction, place your deposit, and begin bidding. Bids are placed directly through the Auction.com website, and you can bid on more than one property at a time. However, you may be required to contact a bidder qualification representative, submit additional documents, and/or provide proof of funds prior to placing your bid. Auction.com also offers the ability to practice bidding before going through a live auction.
  3. If you end up being the high bidder, you’ll pay for the property and begin closing (we’ll talk more about this in the Bottom Line section).

During an Auction.com auction, the property’s home page will include important details such as type, address, square footage, number of bedrooms and bathrooms, estimated amount owed by the current owner, and pictures, as well as current bid, bid deposit, time remaining, if financing is available, and whether or not the reserve has been met. With this in mind, while most residential auctions occur directly through the Auction.com website, some foreclosure auctions will take place live at public venues (e.g. courthouses).

If you’re looking for properties on the go, Auction.com also offers an iPhone app.

Auction.com Pricing & Refund Policy

Signing up for Auction.com is free of charge, which gives you the ability to save searches, create custom alerts, and to receive auction announcements and advance notifications for new auctions that you may be interested in.

However, once you’ve decided to start bidding on a residential property auction, you’ll be required to put down a deposit of anywhere between $1,000 and $2,500, which must be placed on a credit card. On top of this if you’re the winning bidder, you may be required to pay a buyer’s premium in addition to the final purchase price, which is typically 5%. For example, if you purchase a home for $100,000, you may be required to pay an additional $5,000 directly to the seller on top of the sales price, which in most instances is a bank.

If you’re the winning bidder once the auction has concluded, your credit card deposit will be returned after earnest money has been received and purchase documentation has been signed. However, if you’re not the winning bidder, your deposit will be returned to your card within 2 business days.

It appears that there are no refunds associated with use of Auction.com, which seems to weigh heavily in the seller’s favor. We’ll talk more about this in the Bottom Line section.

Other Auction.com Reviews Around the Web?

Auction.com appears to have a relatively poor online customer reputation, with the most common complaints citing:

  • Numerous seller’s fees (often initiated by the banks) on top of the winning bid, many of which were not disclosed in the original auction.
  • Homes are already overpriced before auctioning even begins.
  • Accusations that these homes are not salable on the open market due to very poor condition (e.g. presence of mold/termites, serious structural problems, etc.). In fact, we read several reviews claiming that even when documentation for problems such as these were provided to Auction.com, they refused to list them in the property’s auction.
  • Poor customer (rude, unhelpful, attempt to rush you into signing an agreement that essentially waives all your rights as a seller).
  • Extensive shill bidding.

What’s the Bottom Line About Auction.com?

Similar to HomeSearch.com, Auction.com claims to be the “nation’s leading online real estate marketplace.” But does this mean that you should use them for your next residential or commercial real estate purchase? Like so many things in life, the answer is that it depends. Here’s why:

First and foremost, keep in mind that you’re solely responsible for performing all due diligence on any property you’re thinking about purchasing through Auction.com, including any existing liens and hazardous conditions. On top of this, most properties are not contingent upon financing and are sold “as is/where is” with no other contingencies available (such as an inspection). In other words, it’s up to you to find out as much as you can about a property before bidding, and if something comes up after you’ve agreed to purchase it, you have no recourse against the seller.

Second, it’s important to note that just because you win an auction doesn’t mean that you’ve purchased the property. Instead, Auction.com essentially acts as a buyer’s representative and submits your highest bid to the bank, who can then accept or reject your offer. As such, in addition to the complaints noted in the previous section, numerous customers stated that banks would take a very long time to respond to these offers, and even when they did, they would often change the terms (e.g. sales price, down payment/deposit amounts, seller’s/legal fees, etc.). And if you decide to back out of the deal once this occurs, Auction.com will then keep your deposit for “failing to close.”

Finally, although Auction.com holds an A+ rating with the Better Business Bureau with just 12 closed complaints over the past three years, their online reputation is much less rosy. In addition to the complaints noted in the previous section, the company has a reputation for rushing buyers to sign contracts that essentially strip you of any rights you may have.

Bottom line: If you decide to purchase a residential or commercial property through Auction.com, it appears it’s pretty much a coin toss as to whether or not your high bid will be accepted by the bank. And if it is, remember that you’ll essentially be subject to whatever last-minute changes the bank decides to make, while having almost no recourse throughout the process.

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10 Customer Reviews for Auction.com

Average Customer Rating: 1.8
Rating Snapshot:
5 stars: 1 4 stars: 0 3 stars: 0 2 stars: 4 1 stars: 5
Bottom Line: 10% would recommend it to a friend
Showing 1-10 of 10
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  • 5 out 5 people found this review helpful

    Hurry Up And Wait

    Hurry up and wait has been my experience with Auction.com so far. I won the winning bid in the middle of July. The first thing they do is send you a very lengthy contract that you should be able to have a lawyer review but they only give you 2 hours to sign and return it or you lose the chance to buy the home. Then they give you 2 days to wire the earnest money and any other paperwork they send you must be taken care of right away.

    I was told that we could close on the house in 30 days since it is a cash deal. We were scheduled to close on August 15 but told a few days before that date that we would not be able to because the seller (bank) had not signed and returned the sale contract. I was then scheduled to close in another 30 days which did not happen because I was told that the seller (bank) has not returned the deed but on the extended contract, I could clearly see that the seller had signed the sales agreement in plenty of time to close on the first original date. I am on my fourth time having them extend the closing date which they say is due to them not receiving the deed back from the bank which frankly I don't believe because they have already lied to me once.

    Unfortunately, it is easy to believe they would lie because of the customer service. I have been given the name and number of a few contact people during different parts of this process and anytime I've tried to reach out to any of these special people I've always got an answering machine with a message that my call would be returned within 24 hours. My calls have not been returned once! It's a joke, I don't know why they bother to give you these numbers? So here I am waiting until they are good and ready to let me finish this deal. I will write again to up date on my progress.

    Bottom Line: No, I would not recommend this to a friend

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  • 3 out 3 people found this review helpful

    Terrible Website

    • Miami, FL,
    • Oct 24, 2016

    So I got everything ready to start bidding on a property listed on Auction.com. Three days before the bidding even started, they took it off and said they had accepted an offer. What kind of B.S. is this? How do you take something off before it even auctions? This website is a piece of garbage and waste of time. Don't ever use this site.

    Bottom Line: No, I would not recommend this to a friend

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  • 15 out 15 people found this review helpful

    Auction.com bidding is rigged

    • Los Angeles, CA,
    • Jul 19, 2016

    Went to a live auction run by Auction.com today in Corona, CA. Out of 150 properties on the board, only 14 actually went up for auction, the rest were either canceled or postponed. Of the 14 that went to auction, around 8 to 10 were "won" by creditors and the auctioneer made that clear. I think there are shill bidders in the back of the room that bid against investors to get the price up to some pre-determined reserve.

    There are several helpers roaming the room trying to entice higher bids. I think banks use auction.com to try to sell less desirable foreclosure or REO properties sight unseen to unsuspecting buyers and investors. We had a budget and once the bidding got above our budget we stopped bidding so we didn't win the property.

    When I checked on a real estate sold online website later that day, the property that was supposedly "bought" by the creditor didn't show up on the list as sold. There may be some good deals to be had on auction.com but buyer beware!

    Bottom Line: No, I would not recommend this to a friend

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  • 32 out 33 people found this review helpful

    Auction.com is a scam

    • Indiana,
    • Apr 3, 2016

    I can not believe that such practice even survived so long in the United States. I want to warn anybody who are thinking to buy from Auction.com. There are several things you need to pay attention to. First, when you bid online, the Auction.com will bid against to raise the price. If your bid does not meet the reserve, they will keep up bidding against you. If nobody wins the bid, they will post the property one day later. Second, Auction.com has terrible closing services. You need to be careful what you signed for. Usually, you will have to pay the closing cost for the seller. The closing agency they are using is called Service Link. Both Auction.com and Service Link have terrible services. They only want money. They do not want to do the work. Most important, you need to ask them whether they have the key to the property. Our experience is that we paid everything for the closing and waiting for the key. Auction.com told us that they do not have key to the property. You have to break the door to gain access.

    Bottom Line: No, I would not recommend this to a friend

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  • 48 out 50 people found this review helpful

    Houses not REALLY for sale!

    • Albuquerque NM,
    • Dec 4, 2015

    We have only tried to buy one home on auction.com, but I don't believe they are actually selling the homes they list. First, I've noticed that the same house will go up for auction 2, 3, or even 4 times, this should have been a warning.

    We bid on a house that had previously been on MLS. We had tried to contact the realtor but she wouldn't return our calls. We had been by the house and knew that it was vacant and had even been winterized.

    We won the bid. The seller came back and wanted a higher offer -- not a counter offer -- just said "offer more or we'll reject it." We increased our offer and the auction.com guy said it was above the reserve so they should take it.

    We then got a call from the listing realtor ranting that we couldn't have bought the house because she had a buyer. Then she said she was going to "undo" our auction.com deal. THEN she offered us 5 thousand to flip the house to her if we DID get it!

    Apparently she was able to "undo" our deal with the bank, because they rejected it again saying that the house had recently become vacant so they wanted more for it. Not true! The people were evicted and the writ served more than 2 weeks before the auction.

    They have now put the house BACK on the website but we're through with trying to deal with them, except they won't return our earnest money. No reason -- just won't return our calls and won't contact the title company.

    I think auction.com is fishing for buyers and that neither the reserve price or the winning bids mean anything. It sounds like they're not really authorized to sell the house at all -- they're just getting offers from the bidders and presenting them to the banks and hoping maybe they'll take the offer. Don't waste your time.

    Bottom Line: No, I would not recommend this to a friend

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  • 48 out 51 people found this review helpful

    Bad Business Tactics

    I'm going to the closing table tomorrow, and I have to say, I'm not happy. They tacked on several fees that my attorney said they had never seen anyone add to the buyers fees. They only have communication with the buyer when they demand your earnest money and signatures on the contract. Then you won't hear from them again. They have bad customer service, and I believe use unlawful tactics such as requiring you to use their title company. They also so to great lengths to keep you out of the property until closing. I will never use them again. Period.

    Bottom Line: No, I would not recommend this to a friend

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  • 8 out 20 people found this review helpful

    Great house at great price

    • Clarkesville, GA,
    • Nov 6, 2015

    I purchased a home on auction.com 4 years ago. I am very happy with the home. I did get to go to an open house before bidding. I would never recommend buying anything unseen. I have been looking at some lately with someone else and some of them are in pretty bad shape. That is to be expected when they are repos. You never know what the tenant will do before they leave. But overall I got a great house at a great price.

    Bottom Line: Yes, I would recommend this to a friend

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  • 38 out 41 people found this review helpful

    Fraud

    • Maryland,
    • Oct 11, 2015

    Do not bid on this property, The property is listed at 1,375 SF but is actually 850 SF. My realtor measured the entire first floor. She and I notified Auction.com and the listing agent that the listed SF was incorrect and they refuse to change it. At first I won the bid and it was listed as a 3-bedroom and 1 bath but the property only had 2 bedrooms and they refuse to except a lower bid. The property was relisted and I bid again. This has been going on for a month now.

    Auction.com told me that they put in bids for the seller to up the price so whenever you bid they are going to out bid you until they get what the want. NOW yesterday the bid was at 45K and I put in 83K. Then I received a call from Auction.com wanting me to put in a higher bid. When I refused to do it, they stop me from bidding and left my bid so people could bid higher. This is fraud.

    Property Details: (217 Mchenry Ave, Baltimore, MD 21208)

    Bottom Line: No, I would not recommend this to a friend

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  • 36 out 37 people found this review helpful

    Probably not worth the effort

    • Jul 31, 2015

    I did make a good return using auction.com - once. Ever since then I've participated in numerous "auctions" that ended up this way:

    1) Properties were bid way beyond the price necessary for a reasonable risk-adjusted return.

    2) The auction did not expire when it was supposed to, instead being extended presumably (but not verifiably) to "reserve not met."

    3) Most interestingly, probably the majority of properties were relisted! So whomever won the bid actually did not get the property, supporting the suspicion that auction.com does not actually have seller involvement until they bring their final price to them for approval.

    We have decided to no longer use auction.com because we need to invest our own time in due diligence on their listed properties, which takes time, but have a very low chance actually of obtaining them. The effort investment in using auction.com is therefore not worth its expected return.

    Bottom Line: No, I would not recommend this to a friend

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  • 40 out 42 people found this review helpful

    Read between the lines

    • Middouri,
    • Feb 26, 2015

    Auction.com identifies itself as a "Market Validation Program" (MVP). MVP is just a label to disguise a strategy to drive up the real estate market.

    This potentially benefits most everyone EXCEPT the buyer (although they hope to convince buyers it is to their benefit otherwise the strategy fails) and tax payers.

    It breaks down as follows;

    -Buyer's potentially loose the advantage of low competition by competing in a broader buyer base and are encouraged to bid against themselves. As for the MVP service's so called "definitive decision date", it as NOT a sale date but only a deadline for whether the offer will be approved by the lender.

    -Lender potential benefits: The MVP service provides a way to potentially inflate the selling price of short sale properties.

    -Agents potentially could be eligible for higher commissions.

    -Sellers may appreciate a quicker sale and a pause of any foreclosure action.

    -Community potential benefits: Potentially higher sales prices would lift the "fair market value" and the local tax base (thru increased taxes), which can benefit local schools and infrastructure within the community.

    Bottom Line: No, I would not recommend this to a friend

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