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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

Chatbots: Are they still useful, or ready to be retired?

(TECH NEWS) Chatbots have proven themselves to be equally problematic as they are helpful – is it time to let them go the way of the floppy disk?

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Man texting chatbots leaning against a brick wall.

All chatbots must die. I’d like to say it was fun while it lasted, but was it really?

I understand the appeal, truly. It’s a well established 21st century business mantra for all the side hustlers and serial entrepreneurs out there: “Automation is the key to scaling.” If we can save time, labor, and therefore money by automating systems, that means we have more time to build our brands and sell our goods and services.

Automation makes sense in many ways, but not all automation tools were created equal. While many tools for automation are extremely effective and useful, chatbots have been problematic from the start. Tools for email marketing, social media, internal team communication, and project management are a few examples of automation that have helped many a startup or other small business kick things into high gear quickly, so that they can spend time wooing clients and raising capital. They definitely have their place in the world of business.

However promising or intriguing chatbots seemed when they were shiny and new, they have lost their luster. If we have seen any life lesson in 2020, it is that humans are uniquely adept at finding ways to make a mess of things.

The artificial intelligence of most chatbots has to be loaded, over time, into the system, by humans. We try to come up with every possible customer-business interaction to respond to with the aim of being helpful. However, language is dynamic, interactive, with near infinite combinations, not to mention dialects, misspellings, and slang.

It would take an unrealistic amount of time to be able to program a chatbot to compute, much less reply to, all possible interactions. If you don’t believe me, consider your voice-activated phone bot or autocorrect spelling. It doesn’t take a whole lot to run those trains off the rails, at least temporarily. There will always be someone trying to confuse the bots, to get a terse, funny, or nonsensical answer, too.

Chatbots can work well when you are asking straightforward questions about a single topic. Even then, they can fall short. A report by AI Multiple showed that some chatbots were manipulated into expressing agreement with racist, violent, or unpatriotic (to China, where they were created) ideas. Others, like CNN and WSJ, had problems helping people unsubscribe from their messages.

Funny, shocking, or simply unhelpful answers abound in the world of chatbot fails. People are bound to make it messy, either accidentally or on purpose.

In general, it feels like the time has come to put chatbots out to pasture. Here are some helpful questions from azumbrunnen.me to help you decide when it’s worth keeping yours.

  1. Is the case simple enough to work on chatbot? Chatbots are good with direct and short statements and requests, generally. However, considering that Comcast’s research shows at least 1,700 ways to say “I want to pay my bill,” according to Netomi, the definition of “simple enough” is not so simple.
  2. Is your Natural Language Processor capable and sophisticated enough? Pre-scripted chatbots are often the ones to fail more quickly than chatbots built with an NLP. It will take a solid NLP to deal with the intricacies of conversational human language.
  3. Are your users in chat based environments? If so, then it could be useful, as you are meeting your customers where they are. Otherwise, if chatbots pop up whenever someone visits your website or Facebook page, it can really stress them out or turn them off.

I personally treat most chatbots like moles in a digital whack-a-mole game. The race is on to close every popup as quickly as possible, including chatbots. I understand that from time to time, in certain, clearly defined and specific scenarios, having a chatbot field the first few questions can help direct the customer to the correct person to resolve their problems or direct them to FAQs.

They are difficult to program within the expansiveness of the human mind and human language, though, and a lot of people find them terribly annoying. It’s time to move on.

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Tech News

Get all your digital organization in one place with Routine

(TECH NEWS) Routine makes note-taking and task-creating a lot easier by merging all your common processes into one productivity tool.

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A desk with a laptop, notepad, smartphone, and cup of coffee settled into an organized routine.

Your inbox can either be your best friend or your worst enemy. Without organization, important emails with tasks, notes, and meetings can become a trash pile pretty quickly. Luckily, there are a lot of tools that aim to help you improve your efficiency, and the latest to add to that list is Routine.

Routine is a productivity app that combines your tasks, notes, and calendar into one easy-to-use app so you can increase your performance. Instead of having to switch between different apps to jot down important information, create to-do lists, and glance at your calendar, Routine marries them all into one cool productivity tool. By simply using a keyboard shortcut, you can do all these things.

If you receive an email that contains an actionable item, you can convert that email into a task you can view later. Tasks are all saved in your inbox, and you can even schedule a task for a specific day. So, if Obi-Wan wants to have Jedi lessons on Thursday, you can schedule your Force task for that day. Likewise, chat messages that need follow-up can also be converted into tasks and be scheduled.

To enrich your tasks, notes can be attached to them. In your notes, you can also embed checkboxes, which are tasks of their own. And if you have tasks that aren’t coming from your inbox, you can import them from other services, such as Gmail, Notion, and Trello.

To make sure you can stay focused on the events and tasks at hand, Routine makes it easy to take everything in. By using the tool’s keyboard-controlled console, you can access your dashboard to quickly see what tasks need to be addressed, what’s on your calendar, and even join an upcoming Zoom session and take notes about the meeting.

Routine is available for macOS, iOS, web, and Google accounts only. Overall, the app centralizes notes and tasks by letting you create and view everything in one place, which helps make sure you stay on top of things. Currently, Routine is still in beta, but you can get on a waitlist to test the product out for yourself.

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Tech News

The paradox of CAPTCHAs: Too smart for humans vs AI?

(TECH NEWS) AI is catching up to our cybersecurity technology and often tricking humans too — so what’s next for CAPTCHAs and the internet?

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Person using phone with laptop to verify CAPTCHAs and code.

We’ve all encountered it before: The occasional robot test that feels impossible to beat. If you’ve felt like these tests, also known as CAPTCHAs, have gotten harder in the last couple of years, you aren’t wrong—and the reason is as ironic as it is baffling.

Simply put, AI are just as good as—and often better than—humans at completing CAPTCHAs in their classic format. As machine learning and AI become more advanced, the fundamental human attributes that make consistent CAPTCHA formats possible become less impactful, raising the question of how to determine the difference between AI and humans in the future.

The biggest barrier to universal CAPTCHA doctrine is purely cultural. Humans may share experiences across the board, but such experiences are typically basic enough to fall victim to the same machine learning which has rendered lower-level CAPTCHAs moot. Adding a cultural component to CAPTCHAs could prevent AI from bypassing them, but it also might prevent some humans from understanding the objective.

Therein lies the root of the CAPTCHA paradox. Humans are far more diverse than any one test can possibly account for, and what they do have in common is also shared by—you guessed it—AI. To create a truly AI-proof test would be to alienate a notable portion of human users by virtue of lived experience. The irony is palpable, but one can only imagine the sheer frustration developers are going through in attempting to address this problem.

But all isn’t lost. While litmus tests such as determining the number of traffic cones in a plaza or checking off squares with bicycles (but not unicycles, you fool) may be beatable by machines, some experts posit that “human entropy” is almost impossible to mimic—and, thus, a viable solution to the CAPTCHA paradox.

“A real human being doesn’t have very good control over their own motor functions, and so they can’t move the mouse the same way more than once over multiple interactions,” says Shuman Ghosemajumder, a former click fraud expert from Google. While AI could attempt to feign this same level of “entropy”, the odds of a successful attempt appear low.

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