I have a buyer who has an interest in a short sale.  I was surprised to hear that he found the listing on Auction.com.

I looked up the listing on the MLS and saw that it was under contract 3 times and failed to close.  It's still active on the MLS.  I also looked up the listing on Auction.com and saw that the first bullet point stated "Offered as a short sale."  When I called the listing agent, he said that the lender was the one who placed the property on Auction.com!  He also disclosed to me that he had a full price offer that was rejected by the lender!!

My questions are: 1) What??????? 2) Can a lender legally sell a house via auction when they are not the true owner? 3) Is the lender doing this to phish for prospective buyers?  4)  Will the lender continue to counter with the buyer even if the reserve is met like they do in a typical short sale?  5) Does the listing agent get screwed out of a commission (after 485+ days!!!) if the lender does indeed sell it to someone via auction?  6) Why would an auction house take/allow this listing if there is a high risk that it won't sell?

Looking for any experiences and wisdom I can get here.


Ty Barton

RE/MAX of Barrington

Barrington, IL


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It's fairly common for auction.com to "auction" short sales in the last year or two.  Of course, the "winner" simply goes into contract on the short sale, assuming it's higher than any existing contract on the house, with no guarantee they can buy it for that price..  They do this to "verify" the price of their current offers.  There is no published reserve.

Thanks Wayne!  I just received a call and a FB post stating this same exact thing that you said.  It's great information to have and I appreciate your response!


Thanks Brian!

Have you ever seen a buyer successfully win an auction with auction.com and close on the property?



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