# I just don't get it...



## sisterpine (May 9, 2004)

What a way to do business. I found a messed up house that I believe I can fix up and live in. The little house is in auction. Found out this morning that when I give my earnest money to the auction folks and then bid on and win an auction I will lose my money if the bid does not reach some secret reserve price set by the seller! Who cares right? I do because i can make a bid in good faith, win the auction, not get the house and lose my 2500.00! That is just nuts. If the seller needs a certain amount (reserve price) and the bidding does not meet that price the auction should just not accept a bid or announce a winner. Supposedly the auction keeps my money because they did their part= auction off the house?


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## INFORG (Jun 21, 2011)

I think you need to get some clarification. I don't believe this scenario is legal, and I suspect your understanding is incorrect. Earnest money doesn't work like that


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## TNHermit (Jul 14, 2005)

You have obviously been brought up with common sense and morality. I am sorry for you.

Its all about making money. Anything to do with the moral judgments, the fact that you could create something useful have nothing to do with it. If they get your money and don't get what they want for th e place the rest will be made up in a write off.

its a throw away society money is god


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## sisterpine (May 9, 2004)

This is the most messed up thing I have heard in a while. I cant believe anyone ever bids on these places. It seems the idea is to get folks to bid high enough to meet the 
"suspected or guessed" reserve price. This is what the realtor sent me...
The auctions are to say the least troubling. The owner (Fannie Mae) will do whatever it takes to get a sale price that is acceptable to them. If it means going to auction or whatever. If you are not comfortable with the auction I suggest you wait. If it does not sell at auction it will be assigned to another broker and relisted at a lower price until it sells. If it sells at auction then obviously it will not return to the market. If at any time offers are made and awarded as sold the bank (Fanny Mae) still has first right of refusal. If they feel the sale will not net them enough they can refuse to the auction sale. Whoever the bid went to will then lose their $2500.00 because the auction company fulfilled their obligation.


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## Molly Mckee (Jul 8, 2006)

There is no way I'd bid---I doubt that anyone else will either. Wait and see what happens. There are more houses for sale than buyers!


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## francismilker (Jan 12, 2006)

If that's truly the case I don't see too many folks fronting the money to be eligible for bidding. That's a chunk of change to give up in order for the priveledge of raising you hand.


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## sisterpine (May 9, 2004)

I agree, I think the only folks who would bid would be large investors who have the ability to guestimate what the actual reserve price would be for such a property. So now it looks like I am looking for an apartment I can afford to stay in for the next few years while saving up more money for houseing (will be difficult to pay rent and save at the same time)


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## goatlady (May 31, 2002)

You can ask/find out what the reserve bid is from Fannie Mae/auctioneer/foreclosed homes web sites.


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## sandc (Apr 26, 2010)

Dear God, don't let ebay learn about this racket..


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## Catalytic (Sep 15, 2010)

sandc said:


> dear god, don't let ebay learn about this racket..


no kidding!


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## Evons hubby (Oct 3, 2005)

sisterpine said:


> What a way to do business. I found a messed up house that I believe I can fix up and live in. The little house is in auction. Found out this morning that when I give my earnest money to the auction folks and then bid on and win an auction I will lose my money if the bid does not reach some secret reserve price set by the seller! Who cares right? I do because i can make a bid in good faith, win the auction, not get the house and lose my 2500.00! That is just nuts. If the seller needs a certain amount (reserve price) and the bidding does not meet that price the auction should just not accept a bid or announce a winner. Supposedly the auction keeps my money because they did their part= auction off the house?


I never heard of anything like that in my life.... First.... in every auction for real estate I was ever involved in only the winning bidder put up a good faith deposit. This usually amounts to 15 or 20 percent of the bid price. If the top bid does not reach the reserve bid... then there is no sale, and you do NOT pay anything. The seller pays the auction company in that case... because their "reserve" was basically the high bid. YOU never should pay anything until you have won the bid. Then their should be a sales contract signed by the interested parties.. seller or sellers, and buyers. When the sales contract has been signed.. and accepted by all parties, only then do you put a check for your deposit in escrow. Do be sure you have your ducks in a row,, because if you have won the bid, and put the deposit in escrow... and you fail to perform... IE dont pay the balance in the time period allotted, then of course you forfeit your deposit. Make your arrangments with your bank ahead of time, and recheck the details on this auction. If they expect a deposit prior to the bidding>>>> run as fast as you can in the opposite direction. Or better... to the board of auctioneers or whatever they are called in your state.


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## Janossy (Feb 3, 2006)

sandc said:


> Dear God, don't let ebay learn about this racket..


hee hee ain't that the truth!!


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## fellini123 (Feb 2, 2003)

Unfortunately there are several companies that are doing this. We were involved in trying to purchase a house that was with Auctions.com they work the same way.
If you look them up on the internet you can see hundreds of people complaining about them.

That is why we decided to go ahead and lose the house BEFORE we put the $$ up. I wish we had gotten the house....but I'm glad I didnt have to deal with these auction people.
Alice in Virginia


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## poorboy (Apr 15, 2006)

This B.S. happened locally here IRS seized a guys property and ended up selling it THREE TIMES before they o.k.'d the sale..Wanted it myself, but no way was I going to participate in such crooked dealings!:grit:


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## mekasmom (Jan 19, 2010)

Try bidding on some Construction jobs! You have to put up money to put in a bid to do the work. Then if someone else wins the bid and gets the job you lost your upfront money.
Now where is the common sense in putting up money in order to even bid to do a job for someone else?


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## fishhead (Jul 19, 2006)

This sounds illegal to me.


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## copperkid3 (Mar 18, 2005)

fishhead said:


> This sounds illegal to me.


***********************************************
Fanny Mae and Mac.....so _*WHY*_ in the world, would you think that anything about it would be illegal?!!! 
:teehee:


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