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Google invests $50M in Auction.com: good for Google, bad for consumers?

(Tech News) Auction.com has recently seen a fat cash infusion from Google, and both seek to revolutionize real estate. Again. But who really benefits from this investment, and is it at the cost of consumers?

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Google Capital Invests Big Bucks in Auction.com

The online real estate auction site, Auction.com, landed a monstrous investment from Google Capital. In a press release on the Auction.com website, the largest online auction site for buying a selling homes announced that Google Capital invested $50 million dollars in their Irvine, California-based company.

According to the Jeff Frieden, CEO and Co-Founder of Auction.com, “Google is the world’s greatest Internet company and we’re thrilled to have the opportunity to work closely with them. This will give us an opportunity to tap into their deep expertise in digital marketing and mobile, as well as in building world-class products.”

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In speaking about their decision to extend funding, Google Capital Partner David Lawee is equally enthusiastic. He states, “We think Auction.com can fundamentally change how real estate, and particularly commercial real estate, can be bought and sold, leveling the playing field for smaller investors.”

Since Google is widely recognized as a forward-thinking business leader, one might want to take stock in their decision to back such a company.

Real Estate Consumers and Professionals May Want to Take a Second Look

While this cash infusion may lead to some fundamental changes in how real estate is bought and sold, Auction.com currently has some noteworthy practices.

Nationstar Mortgage Short Sales

One of the largest contributors of properties to the Auction.com website is Nationstar Mortgage. Nationstar requires borrowers who want to sell their homes as short sales to auction those properties through the Auction.com website, and this process is not without its criticism.

For one, the Nationstar/Auction.com process is a little bit disjointed. A real estate agent lists a property, obtains an offer, and submits the paperwork (including the fully executed purchase contract) to Nationstar. Nationstar then requires the property to be listed on the Auction.com website, and the bidding on this property is now open to the public.

Many agents complain that this process completely ignores the existing purchase contract between buyer and seller. Given the fact that the seller (not the bank) is the rightful owner until the property, it is the seller who should determine the best purchase offer on the property. The existing contract should not be ignored.

Auction.com Surcharge

Another hot button issue for consumers is that Auction.com requires a surcharge when you purchase a property through their site. For some properties, the surcharge is $2500. But, for those short sale properties that came via Nationstar bank, the surcharge is 5 percent. So, if you bid $250,000 for a property listed on the site, your total purchase (excluding settlement fees) could be $262,500. In effect, homebuyers may end up overpaying for a property.

Possible Price Inflation

Most consumers have the impression that an “auction” begets a deal. In some instances, that may be the case. However, in an auction, people bid against one another and that raises the price, often even causing a buying frenzy, which clearly works to the benefit of the seller.

Elizabeth Story, a San Diego County Realtor® at Allison James Estates & Homes, points out the following unfair consumer practice: “Auction.com’s properties listed for sale have unpublished reserves that allow the seller to decline the transaction, even if you are the winning bidder. In order to encourage bidding up to the unpublished reserve, Auction.com will bid against buyers in its own auctions.” It’s true that Auction.com does not publish their reserve amounts on their site, unlike other sites (such as ebay) where the reserve is visible to the consumer.

But, unlike other auction sites, Auction.com does actually reserve the right to bid against the consumer. In their Reserve Auction Terms and Conditions, Auction.com states, “The starting bid is not the Reserve Price. Except where prohibited by law, during a live bidding event (online or otherwise) the Auctioneer may open bidding on any Property by placing a bid on behalf of the Seller and may further bid on behalf of the Seller up to the amount of the Reserve Price by placing successive or consecutive bids for a Property, or by placing bids in response to other bidders.”

Homebuyers need to understand that the Auctioneer may be bidding against them and, as a result, inflating the price paid to the property to their own benefit and the benefit of the seller.

Online Bidding May Benefit Sellers

The truth is that the online bidding process may also benefit those home sellers that list their homes for sale on the site. In situations of properties where there has been limited interest at the local level through common real estate advertising practices, sellers may be able to increase their buying pools. In the example of luxury homes valued in the millions of dollars, widening the buying pool could possibly lead to a quicker closing.

Thinking of buying a home on Auction.com? Think that if it’s good for Google, it’s good for me? “It’s important to know the facts,” Story says. “Buyers need to know that they are not shortchanging themselves.”

It’s true that the online real estate auction site may have some good features, but as always… caveat emptor!

Melissa Zavala is the Broker/Owner of Broadpoint Properties and Head Honcho of Short Sale Expeditor®, and Chief Executive Officer of Transaction 911. Before landing in real estate, she had careers in education and publishing. Most recently, she has been able to use her teaching and organizational skills while traveling the world over—dispelling myths about the distressed property market, engaging and motivating real estate agents, and sharing her passion for real estate. When she isn’t speaking or writing, Melissa enjoys practicing yoga, walking the dog, and vacationing at beach resorts.

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8 Comments

8 Comments

  1. Missy Caulk

    March 10, 2014 at 12:15 pm

    Thanks Melissa, I tried to use it for myself for a condo in TN. I sat there and watched the bids go up. The scary part of your post is that they can bid up the price. There was a discussion on FB about this a few days ago and most folks said the paper work was horrendous. Makes me concerned for the consumers.

  2. Nick Fisherman

    March 11, 2014 at 1:00 pm

    I am a 26 year old bachelor with no kids. I have no current plans to buy a home. But, my philosophy has pretty much always been “if it’s Google, it’s better.” Apparently, that is no longer valid. Thank you so much for this enlightening article. I will stay away from Auction.com.

  3. Chris Wilkenson

    March 11, 2014 at 2:51 pm

    In theory, if the seller’s reserve is not met by the market, then the
    seller will not sell the property. That same concept holds true on ebay,
    where there is a reserve and if it’s not met then the product doesn’t
    sell. So what’s the difference is the seller bids up to the reserve or
    doesn’t? The same theoretical framework holds true. I feel this article
    is a misinformed, judgmental piece based on analogous insight that’s not
    actual validated through a conceptual framework. Stay away from
    publishing such opinion with such assertion and matter-of-fact
    confidence.

    • Kumar

      April 11, 2014 at 1:14 pm

      What if the buyer made the last bid (which was inflated by auction.com) and puts it over the reserve price?

  4. Maryann Little

    March 11, 2014 at 4:27 pm

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Tech News

Instagram helps pass social isolation with co-watching

(TECH NEWS) As social distancing become commonplace, Instagram responds with co-watching. The Newest way to look at and watch content with friends.

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Instagram co-watching

Deep into the second week of quarantine, third or fourth week for some of us, the isolation is starting to become quite real. Thanks to modern technology we can reach out to our friends and family without leaving the house, but it pales in comparison to the social lives many of us once enjoyed together. While you can certainly FaceTime or video call your friends, it’s still difficult to watch things together, mimicking the in-person experience. Many people have begun searching for apps that allow you to watch televisions shows and trending news together, so you can all see the same thing, at roughly the same time (thanks, lagging) and comment accordingly.

In a timely release, Instagram just launched a new feature called “Co-Watching.” This takes Instagram from a solo experience to a shared experience for up to six people. Co-Watching gives users the ability to video chat and browse through Instagram’s content together, thus making it more of a social gathering. The only downside to this feature, in my opinion, is that you cannot Co-Watch IGTV. Oftentimes, IG posts that are over the time limit are shifted to IGTV and you won’t be able to watch the full post with Co-Watching, but all other feeds and content on Instagram will be able through the new Co-Watching feature (except private posts, of course).

Ready to Co-Watch? Getting started is pretty easy, if you’re somewhat familiar with Instagram. To start, initiate a video call with whomever you want, up to six, in your Co-Watching party, by tapping on the arrow icon in the upper-right corner and select the video camera icon. You’ll see the video chat interface pop up and from there you’ll want to look to the lower right-hand corner for a “media” button, which looks like a mountain photo icon. Tap on that icon and you’ll see all the posts you’ve liked. Select a post or video from your favorites, or from Instagram’s recommended feed and whatever you tap will be shared to all your partygoers. If you’re watching a video, it will continue to loop until you or one of your friends select something new.

There are several other group chat/watching options currently available if Instagram isn’t your jam. Netflix can be used with the Party app. Netflix Party is available on Chrome browsers (on desktops or laptops) and allows you to synch your favorite videos with group chat. There is also the Squad app. It allows you to screen share anything on your phone with your friends. This works with texts, IG, Snapchat, Spotify, YouTube, Amazon, TikTok, and more. Start a group video chat with your selected friends, then broadcast your screen and start chatting. Squad is available in the App Store and Google Play.

While Instagram’s new feature is fun, the inability to share while watching IGTV makes it fall a bit flat for me. Have you tried, or will you try Instagram’s Co-Watching feature?

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Tech News

Broadband internet can save rural lives, especially now

(TECH NEWS) Will this bill finally put broadband internet access into the communities that need it most? Rural communities are quickly falling behind.

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Lack of information kills.

As in straight up will put you in the ground, kills.

Example: Did you know they sell apricot kernels by the bag as a superfood? Did you know that their seeds, as well as those of most stone fruits like nectarines, plums, and peaches contain a chemical called amygdalin? Did you know that amygdalin converts to cyanide in the human body, and will take your Whole Foods shopping behind out like a bag full of used N95 masks on trash day?

If you didn’t know, you know now, and if you knew before, either you’re a botanist, scientist, or some other positive -ist, OR you found out like I did. On the internet.

Y’all, my height, weight, and the calendar say the same thing: it’s not 1995 anymore.

There’s no ‘pounding the pavement’ to get a job, it’s on the internet. There’s no ‘Just call and find out’, you get put on hold and a robo voice tells you to get on the internet. PS, that last weird thing you saw your doctor about? They went to school, and they can authorize the tests, but they Googled that mess too, I guarantee you.

The web is an everyday utility in every country with steady lights and running water for more than 5% of the populace. So why are my folks in the wide open spaces being left out on this? Simply put, it’s a matter of companies not bothering to put the broadband infrastructure in place coupled with increasing charges in paying for the services in the first place. A new bill is looking to change that, and I am THUH-RILLED.

RJ Karney Director of Congressional Relations at the American Farm Bureau spearheaded putting Bill S.1822, AKA Broadband Deployment Accuracy and Technological Availability Act, AKA the DATA Act (nice one), in front of President Trump, and the payoff will payoff thusly if signed into law:

Rural communities will have better access to remote healthcare–physical AND mental, highly important to anyone for whom a doctor’s visit is a literal day trip.

Broadband usage will be tracked more accurately, allowing companies to get a glimpse into where reinforcements are needed most.

Those trackings will be used to decide where government funds will be allocated in order to facilitate internet implementation (say that 10 times fast).

20 Million Americans with no access to broadband, and the standard of life that comes with it will be granted the access they need.

Lovely, right?

And for everyone who likes the taste of leather out there, this isn’t a matter of the free market deciding not to provide a service because it isn’t profitable. No, dear reader, these companies have actively TURNED DOWN government funding to roll out faster internet in less populated areas, citing ‘We don’t wanna’ (my paraphrase) and ‘We know better than they do, and they don’t NEED this’ (also my paraphrase).

Even a city gal like me knows manure when she sees it.

I had a similar situation going on here in Austin. Once I moved out of the crappy apartments that just HAPPENED to be on the tail edge of a rich zip code, and into the crappy apartments by the GOOD taco places, my internet didn’t work right. Because the area had too many “poors” for -company name redacted, although it rhymes with Air BnB- to have put up the structures for working internet there. Despite the fact that my bill was not any lower.

It’s not okay.

Look obviously country folk aren’t stupid. I defy you to be as sharp as someone who has to get up at 5AM and drain a horse’s abscess without getting a hoof-shaped dent between the eyebrows. But especially now in our Covid-19 inundated world, we need info that you cannot just ‘know’. This is unprecedented stuff! For all I know, the virus feeds on the compounds in garlic, and I’m seconds away from a sweet n’ savory death due to all my ‘fight it off’ infused honey!

The issue is that no amount of good ol’ fashioned common sense is going to keep you from knowing not to feed your baby with contaminated Gerber’s that just got recalled because some sick douche-iot purposefully sneezed in the mashed peas. When I say ‘We need the information’, that WE means ALL of us.

Let’s hope for the best for this bill, and get everyone wired, hired, and fired up.

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Tech News

Mental health app tackles COVID-19

(TECH NEWS) GG life is an app backed by a psychology researcher to help people deal with a crisis. The COVID-19 outbreak seems like the perfect time to try it.

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GG Life

Mental health apps are a dime a dozen. GG Life is an app that purports to “use the power of inner-dialogue to heal, improve and progress.” Gur Ilany, creative director, designer and entrepreneur, posted on Product Hunt, “We’re excited to launch a product we’ve been working on for some time. My friend Dr. Guy Doron and I created over the last 2 years a mental wellness tool that helps people overcome their mental challenges.” GG Life is designed to help people cope and respond to crisis.

How it works

The app has different “journeys” which are the equivalent of levels. I started with the “Coping” journey. The first section introduces the topic. You are given an affirmation, one at a time. You pull (swipe) the positive statements toward the bottom of your phone and push the negative statements away from you toward the top of the phone. Each section only takes a few minutes. There are a few sections under each journey that assess your current state. The coping journey also has two “waves” sessions, which are a directed meditation exercise.

Pros

Dr. Doron is a clinical psychology researcher, who brings his extensive experience in OCD, anxiety and depression to GG Life. His background includes international studies and prestigious research grants. One of the things that makes GGAPPS unique is that they support their app with research on its efficacy. This research is being conducted in the US, UK Spain, Italy and Israel. You can actually read the academic papers that have been published about the app and its impact on people’s everyday life. The app is easy to use. It only takes a few minutes each day.

Cons

I did find the app to be a bit tone-deaf to people with chronic illnesses. In the Coping section, these statements came up – “I’m more likely to than others to get an illness.” Or “I’m more vulnerable than others to develop health issues.” You were supposed to reject them. I felt as if an immuno-compromised person might feel triggered.

The app is free to use, but if you want more journeys, it can be on the expensive side. The premium version costs $7.99/ month with a yearly subscription available for $59.99. Although it’s much cheaper than a counselor, it’s still an investment.

Does it work?

I’ve only been using GG Life for about three days, but I can see a difference in my mental dialogue. I challenge the negative thoughts more than I did before. I don’t know if that’s enough to recommend the app, but it’s certainly worth a download to try and manage obsessive thoughts about this crisis.

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