I recently bought a Fanie Mae property via an on-line auction.  I was originally drawn to the auction for a number of reasons:

1. The auction was poorly advertised.  It only showed up, as far as I could tell, on the on-line auction company web site and realtor listing sheets. You had to call an 800 number to find out how to get information on the auction.  They certainly made it difficult for you to find out about the auction. 
2. They offered very little incentive to selling realtors.  For starters, selling realtors were only entitled to a lousey 2% commission.  So if the house sold for $10,000, that’s a whopping $200. By the time they have split with their broker, they barely have enough for a fancy dinner.  The only way an individual could access to the properties to take a look was through a realtor. 

 With all those factors working in my favor, I carefully tracked the auctions.  The hallmark of on-line auction is a hard and fast end of bidding.  I decided in advance the absolute most I would be willing to bid on the properties. 

Then I tuned in a few hours prior to the end of the auction.  The minimum bid on all auctions was $1,000, with bidding increments increasing by a minimum of $500 per bid. 

I was outbid on all properties save for one.  My winning bid for that particular property, which had sold just 2 years ago for $65,000, was only $6,000.  Now, I knew based on my reveiw of the terms and conditions that this was only a bid.  In other words, it was not an absolute auction.  The seller could accept the offer, counter back, or decline the offer. 

So I waited.  In about one week, the seller (Fanie Mae) countered back at $19,000.  My counter back was $9,800.  About a week later, I was phoned to with word that my offer was accepted. 

I decided to wholesale the property because the location didn’t fit well with my buy and hold portfolio. 

So, be on the look out for on-line auctions in your area.  Another one that is currently going in my area is www.bidsellect.com  This particular auction seems to have mostly HUD homes.  My challenge with this one is that to get your offer accepted, I am told your bid must be somewhere close to 90% of the asking price (YUCK!!). 

We’ll see how many property they sell on that basis.  Anyway, good hunting!