If you are wondering about Hubzu.com, how to bid and win auctions. If you are not sure if the site is legitimate. I have the answers for you.
We’ve used Hubzu.com to get great deals for our clients and ourselves since 2015.
I ‘ll show you our strategy to get bids accepted and I’ll give you tips on how to deal with some of the major issues you may encounter during and after the sale.
Hubzu is a real estate online auction, mostly for bank-owned properties. It works in a similar fashion to Auction.com and other online auctions.
What does reserve not met mean on Hubzu?
Hubzu runs a reserve auction, which means that if the seller doesn’t get his price they will reschedule the auction. Some properties take months to sell because the sellers keep relisting them.
This is very frustrating for many buyers who are the highest bidders but don’t get the property because the reserve price wasn’t reached.
That’s the main reason many bidders think that Hubzu is a scam or not a legitimate company.
This kind of thinking will not get you the properties you want. It will only frustrate you.
Learn how Hubzu works and you will win more bids and get more deals.
Our Bidding Strategy
Here is our secret strategy.
Well, it’s not really a secret and it’s very simple.
The key to winning bids is persistence and the ability to sit on your hands and not overbid.
As I mentioned, many properties go on the auction but they don’t reach the reserved price and so they are relisted again. This can go on for months. So most buyers give up.
Patience & Persistance Wins the Auction
If you want a property, you need to participate in each auction, be patient, and bid the amount you are comfortable with.
The reason you need to participate in each auction is that sometimes the seller will contact you directly and make you an offer if you are close to their reserve price. If you bid only occasionally you will miss this opportunity.
What About Fake Buyers and Shill Bidding?
Shill bidding is when the seller or someone else connected to the seller, artificially bids up the property so the seller can get a better price. Shill bidding is illegal so Hubzu doesn’t do it.
But what they do is proxy bidding or counter-bidding. Hubzu is not the only website that does counter bidding, Auction.com does it too and there was even a lawsuit by a California buyer about this.
You can find the explanation for counter-bidding on Auction.com website.
It’s right there in black and white.
- Counter Bidding is a common practice used by all major auction houses. Auction.com will counter bid on behalf of the seller in order to move the price closer to the Reserve Price, or minimum price that a seller will accept.
- When the bidding reaches the Reserve Price, Auction.com will no longer counter bid. Counter bidding is designed to help the buyer and seller reach a price that works for both parties so the auction will be successful. Please note: The exposure of counter bids is not required in every state.
So, the auction house is bidding on behalf of the seller without revealing their identity until the reserve price is met. As their website mentions, in some states, they are required to reveal the counter bids.
Can you do something about this?
Not, if you want to get deals.
Just know that whoever is biding may be the seller so be patient and don’t go over your limit.
What Happens After You Win the Bid?
If you win the bid get and email from Hubzu, make sure you sign everything, and return it to the seller in the time specified in the contract.
I should warn you, the contract favors the seller but there is nothing you can do about it. They are not going to change it for you.
Two very important points about the contract:
- You have a deal only when the contract is signed by both parties, before that, it’s an offer.
- Use your title company and pay for title insurance. The Hubzu affiliated title company will only provide an insurable title, which means that the chain of title may have known defects and exclusions.
After the contract is signed you will have to pay cash or get some kind of financing that does not require inside inspection.
Line of credit or private money loan may be a good solution. You can find a list of reputable hard money lenders on our website Rentce.com.
Finally, you are at closing and you ask for keys? Imagine your surprise when you learn that there are no keys.
Get your handyman or locksmith and change the locks. That’s a good time to secure the property as well.
What if you go to the property and find that the property is occupied?
This happens and the best way to deal with this is Cash for Keys. Only give the cash when all the belonging are out and you have changed the locks. Get the occupants to sign a form. (you can find one at our website)
If they don’t want to move, file an ejectment lawsuit.
I hope this article gave you an idea what how to bid and win online real estate auctions and what to expect after your win.