Let's revisit the REDC Auction/Foreclosure Issue: Is it still a scam?

So, I noticed the remaining interest in the topic of REDC Real Estate Auctions since my last blog post about this topic.  For those of you who don't know, REDC is the company that runs Auction.com.  I read the fine print on how they ran their auctions several years ago.  My thoughts on their services are here in my article: REDC Foreclosures almost got me!

Okay, so after 3 years of auctions and people complaining about how REDC conducts their auctions, there have been new developments.  It seems that REDC has expanded and in 2012 they introduced Short Sales and Luxury Homes within their offerings.  They also introduced auctions that you can participate in solely online so you do not have to go to the live event.

I think it became clear from my article that this auction event is a marketing gimmick for the largest banks in the country to unload the immense inventory from the housing bubble that turned into the housing crisis.  Now, notice I said it was a "marketing gimmick or the big banks."  I have realized through several accounts of people who have successfully purchased property through REDC and Auction.com, that this whole scheme was a way for big banks to take out the commission they would have to pay Real Estate Brokers and Agents.

Let me explain.  In the past, when large amounts of houses were foreclosed upon, there was an old REO System where the bank would now "own" the house and they would commission a Real Estate Agency to sell the properties.  With each sell of a property, the bank then owed the Real Estate Agency a commission. But as you will see later in this article, REDC and their infamous "auctions" are trying to do away with those pesky commission to Real Estate Agents/Brokers -- and keep all that money for themselves.

I completely realized this when I read a great account of a Real Estate Agent that helped clients successfully navigate through the confusing steps and regulations of a REDC auction. Her full account of the situation is outline on her blog Cyndi Mino's Real Estate and Happenings in Huntington Beach.

But when I read this in one of her posts:

Oh, and yes, I did get some commission out of this whole thing – a whopping 1%, but wait, I didn’t actually get the 1% because of some stupid fees that the auction company kept and then my broker gets his split.  Yes, we agents do not get to keep all this commission that you think we all get.  We have to split it with both agents and then both of our brokerages get their splits too – Whoo hoooo,  by the time I get my check, I might be able to pay my cell phone and gas bill for all the expenses run up from this sale.

I realized what the big banks were doing. Do you see it yet? 

You see, the new advice going around on the Internet is that these auctions are totally doable for the average person if they have some help from knowledgeable people with real estate experience -- in other words . . . real estate agents.  It seems that people that have that type of expertise on their side (Real Estate Agent as Consultant) have a better experience with REDC Auctions.

It's a curious thing.  In the traditional REO selling environment the Real Estate Agent was paid by the big bank wanting to get rid of its property quickly and for the best possible price.  In this new real estate process or scenario, the Real Estate Agent is commissioned by the buyer and gets whatever is left over as commission . . . in my estimate the 1% that Cyndi Mino talked about. 

This is an interesting development don't you think?

So, it seems that these auctions can be successfully won, with a little professional help. And that professional help gets paid "chump change" for all their hard work, when in the past they would have been paid well for their expertise. 

My only question is:  Did you think we were stupid REDC and won't figure out what you are doing?

Yet another unfair process by the big banks. It feels like the burden of everything now is on the "average guy."  What do you think, my family?

Read more about REDC Auctions and Real Estate Agents here:

How to Buy a REDC Auction.com Home Successfully

Is REDC Auction a Scam?

The Evolution of an REDC Auction Deal

Anyone has experience with REDC? (Trulia)




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We’re in a Recession: Is your business screwed?

Last week I featured Part 1 and 2 of this series.

Just a few months ago, I developed a business on eBay that was pretty lucrative for the first six months . . . until about October. You know October 2008, when the president appeared on all the TV screens and said we were royally screwed unless Congress OK’d a big government bailout for the failing banks. And then credit dried up. Then no one came to eBay to buy any of my stuff and all my products just sat there all sad and lonely. Yeah, THAT October 2008.

Anyway, before I shut down my eBay account, it occurred to me that I had more power than I credited myself with. You see, I had customers (about 500 customers) that I could tap into. And guess what, even more amazing – I had their mailing and e-mail addresses.

And then this even bigger idea came to mind. Instead of letting eBay get my customers for me, perhaps – just perhaps – I should work at getting some of my previous customers to come look at my auctions. You know, ACTIVELY court and market to the people that were satisfied with my service and products. Wow! So, I created a database of 500 people, contacted them through e-mail and my sells picked up. Imagine that!

How did I do that? Well good friend I just changed my thinking. No wait, I changed my whole mental direction . . . like I was Bruce Lee talking about . . . water:

Look for part 4, later this week!

There is no 12-step eBay addiction program

eBay has everything, except a 12 Step eBay Addiction Program. If there was one, I'd enlist my husband in it. No matter what I do, I can't get him to stop shopping from eBay and spending money that I think would be better suited to paying down credit card debt or better yet, paying into an investment program.

So, me being a creative little thing -- and knowing that there is no way my husband will stop -- I began collecting all the things in the house that we did not want (which was a lot of stuff -- I had no idea we had so much stuff). And began selling it on eBay to offset my husband's eBay obsession.

Guess what . . . now I'm addicted to eBay, as a seller. I'm selling things left and right. Things I never thought would sell, are snatched up for what I feel are ridiculous prices. I have friends over-seas now . . . customers that drop me a line to see how I'm doing . . .a mailing list with over 100 people waiting for my next auction to come up . . . and an obsessive goal to have over 1,000 listings up at one time.

I've far outpaced my husband's eBay spending and make enough money for his "habit," many of our monthly bills, and gas for the car. A couple more months of sleepless nights -- I can't sleep because I have to check on my auction's bidding amounts at least once an hour -- and we'll be out of debt.

I have piles and piles of stuff I'm selling all through the house. My relatives have truck-loads of stuff in their closets and are gleefully happy to dump it all on me -- as long as they can get rid of it. Now, my husband is complaining that I eBay to much. Payback is a mother, huh?

Signed,
the Queen of Passive-Aggressive।

*** Though I'm making fun of this topic, there are people that have a serious problem with eBay addiction. There are people actually losing their jobs because of their fascination with eBay. Actually, there is help out there for people who just can't stop eBaying -- if you or someone you know have this type of problem and need actual help, visit NetAddiction to learn more.



Starting an eBay Business for Dummies By Collier, Marsha (Google Affiliate Ad)

All I need is 100,000 auctions and I'll be rich!

Okay, I've been working really hard at this Ebay thing. And I must say, I've been doing a wonderful job of it. I've produced a little bit of change from my garage and I haven't gotten 1/4 of the things in there on Ebay yet . . . so opportunity abounds, dear friends.

Anyway, I'm averaging about $10 - $8 per auction in actual profit. Cool huh? So the way I estimate things, all I need to do is get 100,000 auctions up this year and I'll be a millionaire -- if not close to a millionaire when I subtract the E-bay Listing fees, the Pay-pal fees and some other odd fees that seem to drop into my bottom line.

So, let's see . . . 100,000 auctions -- can it be done? Let's get out the old calculator.

Okay, really it would have to be 125,000 auctions because about 25% of my auctions go nowhere - meaning no one bids on my stuff. So to be realistic, I need to put up 125,000 auctions in a 12 month period.

125,000 / 12 months = 10, 417 auctions a month. Hmmm.

10,417/22 days (don't want to work on Saturday and Sunday) = 473.50 auctions a day

474 / 8 hours (I have to blog and sleep and stuff) = 59 auctions an hour

Okay, I doubt that I could do 59 auctions an hour (you have to take photos, write descriptions, weigh stuff etc.) . . . but if I COULD manage 59 auctions an hour . . .I'd be RICH!

Should I go for it?

I suppose things would go a lot smoother if I had more high-end stuff to sell huh? Why don't you guys give me some ideas of what I can sell on E-bay that would give me more bang for my buck?