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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

Facebook policy sets themselves up for yet another failure

(TECH) Facebook’s role in news consumption increases, and their new policy regarding news is raising eyebrows.

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Facebook did not get a lot of likes a when it was facing scrutiny for taking money for Russian ads, and their subsequent role in the 2016 Presidential election. In response to that, Facebook announced its Ad Archive – a public political archive to allow users more transparency in who purchased those ads like you can on television. Additionally, they changed their political ads policy.

Of course, the goal of this is to promote transparency and give the public an opportunity to scrutinize advertisers and have more control about what they do with that information. Facebook and the world at large acknowledges that still isn’t a perfect solution, and there are many problems left to work out, including how perpetrators can get around the new rules by simply setting up an LLC.

Now, Facebook says they will include news pages in their Ad Archives. While this decision was originally opposed by many news publishers, and Facebook compromised by putting them in a separate category, it has officially become part of Facebook policy.

To be a news page, there are several criteria pages and promoters must follow, including focusing on current events and news, spreading factual and true information, and publishing content that is not user generated or aggregated from other areas of the web. Also, the amount of advertising content can not exceed the amount of content related to news.

Facebook’s decision to include news publishers involved some input from The Trust Project was a decent step, but it’s almost certain that many publishers are raising their eyebrows at the decision to include them in the archive, with the indication that news organizations are as suspect as corrupt Russian players. It is particularly grating in an environment where Twitter has opted not to lump news and Russian actors together.

Certainly, how publishers spend their dollars and make platform decisions will be impacted, especially as this continues. Given the broad domains of ad archive – elections, elected officials, and issues of national importance – we are likely to see how things play out over the next few months.

The biggest concern of course, is how this sets Facebook up for another failure in regards to how it handles news, and how this will impact the people receiving that news. And hopefully, we find out before the stakes are too high.

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Tech News

Quickly delete years of your stupid Facebook updates

(SOCIAL MEDIA) Digital clutter sucks. Save time and energy with this new Chrome extension for Facebook.

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When searching for a new job, it’s always a good idea to scan your social media presence to make sure you’re not setting yourself up for failure with offensive or immature posts.

In fact, you should regularly check your digital life even if you’re not on the job hunt. You never know when friends, family, or others are going to rabbit hole into reading everything you’ve ever posted.

Facebook is an especially dangerous place for this since the social media giant has been around for over fourteen years. Many accounts are old enough to be in middle school now.

If you’ve ever taken a deep dive into your own account, you may have found some unsavory posts you couldn’t delete quickly enough.

We all have at least one cringe-worthy post or picture buried in years of digital clutter. Maybe you were smart from the get-go and used privacy settings. Or maybe you periodically delete posts when Memories resurfaces that drunk college photo you swore wasn’t on the internet anymore.

But digging through years of posts is time consuming, and for those of us with accounts older than a decade, nearly impossible.

Fortunately, a new Chrome extension can take care of this monotonous task for you. Social Book Post Manager helps clean up your Facebook by bulk deleting posts at your discretion.

Instead of individually removing posts and getting sucked into the ensuing nostalgia, this extension deletes posts in batches with the click of a button.

Select a specific time range or search criteria and the tool pulls up all relevant posts. From here, you decide what to delete or make private.

Let’s say you want to destroy all evidence of your political beliefs as a youngster. Simply put in the relevant keyword, like a candidate or party’s name, and the tool pulls up all posts matching that criteria. You can pick and choose, or select all for a total purge.

You can also salt the earth and delete everything pre-whatever date you choose. I could tell Social Book to remove everything before 2014 and effectively remove any proof that I attended college.

Keep in mind, this tool only deletes posts and photos from Facebook itself. If you have any savvy enemies who saved screenshots or you cross-posted, you’re out of luck.

The extension is free to use, and new updates support unliking posts and hiding timeline items. Go to town pretending you got hired on by the Ministry of Truth to delete objectionable history for the greater good of your social media presence.

PS: If you feel like going full scorched Earth, delete everything from your Facebook past and then switch to this browser to make it harder for Facebook to track you while you’re on the web.

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Tech News

Why are all apps starting to look exactly the same?

(TECHNOLOGY) As apps evolve, they are beginning to look uniform – is this a good or bad thing?

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Have you noticed that all apps are beginning to look a lot alike? Many popular social media apps are utilizing minimalist designs, featuring lots of black and white with negative space and little color.

At a glance, you may not be able to differentiate what’s Airbnb and what’s Instagram. Normally, something like this could be argued to be unoriginal and boring. However, let’s look at the positives.

If every app – for the most part – is operating with the same design, they’re not trying to constantly one-up each other with the next big look. As a result, they have more time to focus on what’s important – the content found on the app and the functions of the app.

While many apps offer similar features (like Snapchat, Facebook, and Instagram both having Stories), every social media app has its own flair that keeps users coming back. And, user retention is higher if they feel comfortable using the app – which is another plus of them all having similar designs.

If you have 12 different social media apps with 12 different interfaces and means of operation, it’s unlikely that a user will keep up with all 12. But, if they know exactly how to use them, the user can flip back and forth like it’s nothing.

However, “app fatigue is a real thing,” said Yaz of UX Collective. “Most people have grown tired of bouncing between too many apps or learning how to use a new interface after every new download.”

Below is Yaz’s exploration of the uniformity in apps:

Research has found that a quarter of all apps are deleted after just one use. People tend to stick with the apps that they have found made a positive impact in their lives – either for communication with others or apps that save them time.

Uniformity means developers can spend more of their time on creating the content that will aid in better communication and more time saving options.

Again, what it comes down to is the content and function. That’s where the true creativity comes in. People aren’t using Airbnb because the app or the website are ridiculously exciting; they’re using it because it offers a service that is beneficial.

What are your thoughts on app uniformity? Unoriginal, or a stepping stone for what’s really important?

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