I had a listing that was “chosen for alternate marketing” …AUCTION. Now comes the new LA. This is after 3 months of pre listing tasks and only 2 weeks of marketing with the original asset management company. The original LA was a 1500.00 min commission to the LA. Not really all that bad on a 32K property. Actually a very fair commission if you don’t break it down by hourly increments. The auction LA comes and it is now a new commission. 800.00 minus the fee so it comes to 645.00 for the LA. The day the property went to the auction e mails began arriving. A BPO , new photos , a property condition report, bids for repairs and several other “requirements” now on the auction platform all waiting for completion by me. Meanwhile the other emails began. Several of the auction minions began directing all in different directions on their separate tasks. At least 3 demanded the new BPO be e- mailed directly to them. Each not knowing the other was requesting the same task. Now I am not going to bore anyone with all the miss step, lack of communication and disrespect these auction companies have involving the Listing agent. I am not going to delve into ALL of the downsides of these assignments when they go into the “Auction world”. Most REO agents have their “own war stories” to attest to on this subject. Suffice it to say there are too many issues for me to discuss here and now. I will skim over just a small amount of BS in the Auction process. The Auction company needed me for anything and everything they needed and nothing in anyway beneficial or even in consideration of me. They removed my sign on the first day, thus removing the ability I would have for a local buyer to contact me directly. They never communicated with me, never sent me the offer or even the accepted contract, never informed me of the closing agent and never once kept me informed of a property that I was claimed to be the listing agent on. Finally 12 hours before they had scheduled closing the escrow agent informed me I had to pay a “past due sewer bill of 124.00 or this would not close. This came via e mail at 4:30 and closing was to be at 9 AM. I had no contact numbers no e mail addresses other than this escrow agent’s. I had previously checked for any past due bills and saw all were paid. Since no utilities were on at the property due to missing plumbing I was a little confused by the 124.00 newly discovered bill. I called and the escrow agent and got no response. (What a Surprise!!) The next day I called the city for the “past due” sewer bill amount that was said to be holding the closing. The person I spoke to informed me that it was not a sewer bill but a trash service bill that follows the previous owner not the property. It was assessed in 2010. It had no effect on the property or the deed. Now here we go. If I had paid that bill it would have been on behalf of the previous owner. No reimbursement would have been given to me and I would have been out 124.00 making the commission on the entire listing dwindle to 397.00 for all the work I did. I made up my mind in that very moment to refuse to do even one more of these auction assignments. I would rather work for nothing for 3 months than worked for pennies for 6 months. The auction companies need the Agent to keep the utilities on, keep doing property checks and to pay any bills that are discovered in the last hours prior to closing. They need us to keep the property in the MLS. They need their website on the MLS to direct local buyers to them for the auction. They need us to do all the work they get paid for. This sale was 16000 K. I had an offer for 21 K days prior to the auction. The auction company charged the seller 2700.00 auction and another 1500 for management fees a total of 4200.00 on a property that sold for 16 K!! The auction in turn was paying me 645.00. The auction company also charged the buyer a premium of 5 %. So for all my work the auction company received 5000.00 and paid me 645.00. (Again only 397.00 if I had been dumb enough to pay the 124.00.) The banks are willing to pay these auction companies well over 6 %. In fact this was a 33.2 percent fee of the total selling price!! On top of all this the original Asset Company also was paid a fee for their participation in the asset process!! Auction companies do not have employees in the area. That is our trump card here. They have to have an agent. So does the seller. So why do we work for pennies when we see the banks WILL pay absurd amounts for the property disposition for only minimal work by the auction companies?? Why do we ever agree to assist the auction companies who continue to use us? All REO agents may think about declining the assignments when they are chosen for “alternative disposition” by way of any auction. The asset managers love when you do this. The auctions companies are in direct competition with them. .After the above mentioned auction I refused the next one. It was taken from the auction company and given back to me PRIOR to the auction start date for traditional marketing on the MLS. Not participating in the auction process is a very small step in gaining some of the self-respect we have lost.
Comments
Hi Barbara,
Reading all this makes me feel like I'm not alone. You are so right about the Auctions but it's not just Auction.com but almost all real estate auctions. I have learned (the hard way) to avoid them whenever possible.
I have seen comments about Altisource (Ocwen Loan Servicing) and I would like to make one observation regarding this company. You have to read the fine print!!!! In rural East Texas it's very UNusual to get a listing over $80,000 and by the time you pay all the fees off a property that sells for say $70,000 you usually end up in the hole financially. The have a minimum after their fees on properties selling for under $80,000. It's $800.00 period. If you are an agent and not a broker, you end up with, depending on your broker arrangement, around $500.00 give or take a little and you do all the work so if you don't already have a buyer lined up, it's usually not worth the effort. I make more from this company just doing their BPOs. I go to the property one time, take some photos, pull comps and do the report and get paid....one trip...not multiple and much less time involved. Of course the BPO fee is not as much as even a small commission but when you figure your time and expenses, it is actually more profitable.
With out a Real Estate fee is not quite right though. With out a Realtor? I really don't think so. See the below post from this link http://www.zillow.com/advice-thread/Auction-com-and-williams-and-wi...
"Hi Craig, I'm sorry to hear your perceptions of Auction.com are not positive. It sounds like you are an agent working with clients who bought assets on Auction.com. At Auction.com, we pride ourselves on delivering a positive experience in helping our customers buy and sell real estate at true market value and excellent customer service. Our company and our affiliates comply with the licensing laws in all of the states in which business is conducted and maintains brokerage licenses. We also post all available disclosure documents online for each specific property, as provided by the seller of the asset. We would be happy to discuss this further to address any concerns you have regarding the various auction processes as it can be different depending on the asset type.
Sincerely,Peter Chevalier Director of Customer Service, Auction.com
According to this Auction.com Rep, they use licensed Brokers for every transaction. (This is what Ohio requires and what I have experienced as well ) There is a commission and also a 5% buyer Premium. Together they total well over the 6 or 7 % commissions of a typical real Estate Transaction. I am not sure where the hype of no commission is coming from but it is absolutely untrue.
All Asset owners need a Realtor at some point if they are going to sell an asset to the general public.
They need us for many reasons besides the fact that we are licensed. Whether it is to take photos or to do BPO (as Patrick mentioned) or to pay utilities and do open houses for the auctions or just to do property checks, they need us we do not need them.
Just Goggle this auction.com complaints
These auction companies have a lot of problems. In my opinion they can not last as they are currently operating. I think this Auction rumor about owners going to that form for selling maybe a little over stated at this time. But If you are really concerned about Auction.com or any of those auction companies taking your future clients, your income and harming our industry, then do something about it. Don't assist them when they call for photos, BPO or low commission listings. Just say no. It will work if we stand up. We will see them loosing ground instead of our industry taking the blows.
You may find on many popular websites auction.com is advertised heavily. A sister company sold.com is another site soliciting homeowners direct to get their houses sold without a real estate agent fee.
Barbara, you are right on all counts and I'll give you a couple other examples. I had an investor I was going to show a few REO units. As usual just before leaving to meet him I check to make sure all are still actively listed. One was cancelled. I know the listing broker so I called him and left a message. He called back about an hour later to say they pulled the listing to sent to auction. He'd had it listed 16 days. Another buyer called about an REO they saw online. The list was also cancelled to send to auction after just 14 days. I got an email requesting interior BPOs on 4 properties. It was a company I'd never worked with and the fees were lower than most pay for a drive by so I ignored it. One thing I found funny was that the orders stated in all caps that all photos must have no date stamp. I thought that weird since most want a date stamp.
They called me later and I politely declined saying I rarely do interiors because so many are for short sales and I don't like dealing with the owners. They said the orders were for properties going to auction on Auction.com. I still declined but out of curiosity I looked them up in the MLS. Three of them were listed, the longest for 12 days.
Not only are they screwing the listing brokers but they want to use the BPO photos for their online auction.
Thank you for your clarification on these Auctions, I was not aware of what we as realtors get into without knowing, unless some one like yourself informs us. Way to go!
Yes Barbara, that's very true. We are not just the eyes of the AMs/lenders in property preservation but as well as the repair proponent/coordinator, quality control and certifying person on the works done. I will say that Wells Fargo is still the best among my AMC clients. Not only they pay good commission but also repair/rehab most of their properties to be financeable and qualify for first time buyers, though many of our properties sold here in Southern California were all cash transactions from owner occupant buyers. Wells Fargo also is loyal to their REO agents, which I say that I got back few assignments that were canceled out after the first assignment notice due to re-foreclosure process or litigations like BKs, evictions, etc. Unfortunately, just like the other big banks, Wells do not have many REOs anymore due to the many ongoing changes in the default industry adversary to the banks traditional F/C process. Many banks/investors are just selling bulk REOs and bulk Non-Performing Notes now to get away from getting heavy settlements. I started to see BoA and Chase are also joining the ONLINE auction bandwagon now on Auction.com and even paying ZERO commission. Who knows, even Wells could be joining soon? One thing scary about buying ONLINE auction REO properties is that many are sold as occupied and buyers cannot even see the inside.... terms is subject to BUYER ASSUMES RESPONSIBILITY OF OCCUPANCY. It is scary to sell these occupied properties even to individual investors or to buy it yourself even if you are an agent/investor due to the many recent anti-foreclosure and pro-homeowners/tenant laws particularly here in California. I had a few REO properties I had baby sit for 2+ yrs while in litigation as lenders are evicting the occupants to take possession of the properties. or even when the properties are already vacant but were subjected to litigation by the former owners. . .
.Arnold all so very true.
We as agents do keep even the preservation people honest. I had a property for Wells Fargo. A suburban property with a value of maybe 95 K tops. The problem was it had mold. There was a preservation program going on at Wells (for a nanna second). Wells called for rehab against my best advice. I got a bid for 9 K for mitigation and general repairs from a well respected LOCAL REO contractor. Wells got a bid from a company in New York. (remember I am in Ohio) The NY company sent a company from Dayton ( 4 hours away) They painted over the mold. Spay painted the entire basement including the electric box and furnace. Laid the new carpet OVER the old and spay painted the bathrooms, showers, tile and all. They padded the bill with so many items that it was obscene, not any of them done. The bill 42,000.00!!!! Wells ask me to sign off on the repairs so they could pay the contractor. I was appalled !! Took photos and refused to sign off. Next I get threatening calls from the NY company saying they had pic of the completed work. I told them to send another contractor out to sign off because I was not going to. The next contractor came out, I showed him the work order, the bill and let him walk through. HE were appalled. So if an agent had not been there 42 K down the drain. I have been overseeing this asset since last Sept. My potential commission on this when they listed and it sells 1200.00
Now think about this 42000.00 to a crook for work not done and 1200 for a year of property management and utilities.
So many preservation guys are not using dependable , knowledgeable workers. They too pay the very minimum and hire a lot of really questionable people. So even there the agents rescues the asset owner just by being the eyes of the preservation work. There is so much money wasted by the asset owners today that could be saved if they just trusted the Real Estate Professionals and stooped with all the AMs and other stuff.
As far as traditional Real Estate... We have an agent who is a charming 85 yrs old. A real fireball but can not use a computer. Last year she sold 2.5 mil and made 20 K . On 2.5 mil in REO properties sold by me, I made 7500.00 She paid no bills did no advertising and did not due one BPO. She listed and sold in less than 90 days. My assignments were 6 to 8 months long . CFK and pre-lisintg was 2 to 4 months 3 BPOS on each , weekly checks and photos and about 1800.00 in utilities for which I was reimbursed 1600 due to the late final bills from the utility company. Her work on that income was less than a 3rd than was required on my income for the same amount. So I am now returning to the Real world of Real Real Estate.
Hehehehh.... you hit the nail by the head Barbara. Yes, if we do not accommodate these ONLINE auction companies and also BPO companies who pays very meager, we can survive still as Realtors. We should just do the way real estate is done by the old school. We Realtors are the foot soldiers and can solicit business direct from homesellers and buyers on the main street. Meanwhile, ONLINE auction and BPO companies depend on us the foot soldiers for their due diligence. So if you do not accommodate them, they will not be able to do their local works. They can still assign their property preservation works but appraisals and BPOs have to be done by licensed professionals like us. A $30-40 fee/BPO (and sometimes not paid), we do not call that a professional fee with our time well spent to come up with a good and credible report. We can spend that time better prospecting direct to homesellers and buyers in our own local markets. ...... An ANALOGY is, you cannot fight and win a war without foot soldiers on the ground.
Should the complaints go to your State Realtors Board ?
Also has anyone tract some of these properties that went to an auction web site? I tracked about a dozen this past spring and summer. Not one closed.
Properties sit vacant and the BANK was still the owner on the tax records.
A dozen is not very many, but still it is interesting. We will see what happens to these properties.
Accommodate them? Really? I am sorry but the last time I will accommodate these crooks was the auction I mentioned above. MY LAST ONE. They need to accommodate me, I am the one that makes their occupation even possible. Without agents they are out of business. . Who needs who here? I can work at the quick shop and be paid more for far less work. With out them I am so much better off. They on the other hand need us to make money this way. WHO should be accommodating WHO?
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