Auction.com / Bank of America - My experience
Here's my experience on a file with Auction.com.
Default Servicing LLC contacted me after our short sale fell offer fell apart. They offered an option where my client could use Auction.com to help market the property. My client would not face a Deficiency Judgement and he would get $5k at closing. The catch was that the buyer must pay a 5% buyers premium to Auction.com (Standard fee for most auctions)
I noticed a bit more traffic and actually did get contacted by a couple of buyers about it.
The auction got bid up higher than I expected it too. Actually to the point where I don't know how it even appraised ok. But it did..
All the documents were sent in to Auction.com, but, then I was told that we also needed to open the file and upload the documents into Equator. Once I did that, I was contacted by AMS servicing who had no idea who Auction.com was or why they were affiliated with this transaction. They also told me I had to remove the 5% buyers premium form the HUD as they weren't going to pay it. (Remember, this is the way auction.com gets paid and the buyer paid this on top of their bid amount). So currently, I am locked in a battle over this 5% and noone from AMS will reach out to Auction.com for clarification or vice versa.
Also, Default Servicing told me initially that as long as the auction hit the minimum reserve amount, then we had a deal and it would be no problem. She never mentioned that AMS and the investor knew nothing about Auction.com or that we would have to still send in a bunch of documents to AMS just like a regular short sale. So now we have a buyer who is ready to close and noone knows what the heck is going on. Typical Bank of America garbage..
So overall, yes, Auction.com attracted more buyers, but, at this point, I don't know if this transaction is even going to happen. So just be careful...
Replies to This Discussion
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Permalink Reply by 31cg1fw8yxswn on
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I would gather ALL documents showing the trail of offers, requests and requirements. I would then contact my office retained attorney. This is standard contract law involved. I am not an attorney but having read much law and case law I can think of at least 5 or 6 tortious conditions that exist here.
Certainly, any suggestion or requirement to work with any specific company or person more than implies payment of thier service fees in any closing. Unless your clients have signed a guarantee of fees there is no issue from YOUR perspective of the third party service being paid. If your client or the buyer had to guarantee fees then there is a bigger issue of fraud by the other parties against yoru client(s). This would be interference in your trade by definition.
The biggest issue is IF the NET to Holder was increased by the process and exceeded reasonably expected NET after the extra 5% then there are other issues and possible tortious conditions in play. There can be no expectation of increased profit (reduction of losses) by a third party without recompense for the work that party achieved.
Regarding the appraisal, as I understand it from other input at this site, it may be that there was approval of a loan by the current Holder without appraisal. I would give any buyer (or buyer's agent) a "form" warning statement in writing that any no-appraisal loan may require that they owe more on the property than its fair market value and that the time to recover to a positive loan to value is unknown and can not be computed in any manner.
CYA even if it is not your client as any value over Fair Market Value that you achieve as a listing agent even could cause you legal issues later.
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Permalink Reply by Jeremy Jennings on
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Hey Pat, do you have an update on what happened with this? Did the Auction.com eventually go through?
I'm asking because I'm opening a Nationstar that is Requiring for it to be on Auction.com from the Get Go, which is nerve wrecking as I have no experience with them!
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Update for everyone...
Auction.com was such a simple process!!!! We put it on there, did the marketing period, and had an offer. The offer for the auction did not meet the reserve, but they still took it. Here's the only scary part (if you're the buyers agent).... with Auction.com the buyer has NO Contingencies and has to put up a large deposit. I double ended my auction.com short sale so it was stressful but luckily it closed with no worries ( cash deal ).
Follow what they say and you will get an extra .5% commission which I did qualify for. Good luck :)
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