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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

Amazon Ring exposed wifi passwords; let’s talk ethics

(TECH NEWS) Ring has a security slip up is part of an alarming tech trend! Can industry insiders turn things around before the government forces their hand?

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Ring doorbell

Knock knock!

Who’s there?

WiFi.

WiFi who?

Why Fi…ght external regulation, if you won’t implement higher standards on your end?

Amazon’s Ring smart doorbell/camera services left customers in the ding-dong ditch by letting hackers exploit a flaw that exposed homeowners’ WiFi passwords to neighborhood hackers up until September of this year. I thought putting a ring on things locked them down, but I guess that’s only for people…

Truth be told, I honestly didn’t think a wifi password in the wrong hands could do too much. I figured neighborhood freeloaders would drag my speed down playing some MMORPG on my network or get me slapped by pirating Disney stuff on my dime.

Apparently, what a serious hacker is MORE likely to do is use that connectivity to share a keystroke tracking program with my computer, then sell my passwords to whoever wants them.

Imagine someone in Cairo clogging up my precious Netflix queue with a bunch of romcoms. Eww.

In all seriousness, that’s a pretty big flaw in the Ring. It took Bucharest-based Bitdefender (a merry band of cybersecurity researchers) to point it out. Amazon’s tech ninjas jumped on it, and the issue’s been fixed for a couple of months as of time of writing. But all’s not quite well yet.

The burning questions on my mind are: Who was supposed to catch it first? And why weren’t people told before the fix?

If you’re in the tech industry, know this, and know it well: John Q Public is not your beta tester.

Releasing a product with something as small as a typo on the packaging is embarrassing enough, but when you leave yourself open to something like letting your customers be vulnerable to identity theft, your face gets considerably more eggy.

And, as usual, leaving doors like this opened doesn’t just make your company look bad, or let competitors get the edge on you.

Consistent lack of inner standards means you’re going to be up against outer standards you’ll like even less. Sure, you might think that govt. regulation is going the way of the dodo, but the tech industry and recently emancipated pork industry aren’t the same.

If you’ll pardon the generalization, the more someone leans towards less government oversight, it’s more likely that they’ll view technology as a necessary evil than anything. And that means tech industry slip ups will be the first to be monitored if internal quality control keeps deteriorating. People are getting wise to how much information their smart devices are tracking, and how vulnerable they can become when that information isn’t secured.

Amazon execs will be fine if things go to the courts. Your startup? Probably not as much.

Look, tech nerds have it going on. I really WANT to advocate for leaving you all alone and letting you do your thing, but the constant corner cutting on security testing makes that difficult. Leaving consumers in the dark until the fix is done, meaning no one even had the chance to take precautions like instituting password changes, is a huge no-no, and the fact that I even have to rant about it is alarming.

You know that cliche, ‘It’s not that you DID xyz, it’s that you LIED about it’? It goes for lying by omission as well. Consider this case the coal mine canary.

You are your own industry’s gatekeepers. Take the job seriously before the job gets taken. Seriously

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Earbuds that are noise cancelling hit the market just in time for the holidays

(TECH NEWS) There are no shortage of earbuds on the market, however, Nuheara’s noise cancelling, bluetooth earbuds are sure to top everyone’s wish list.

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earbuds noise cancelling

Noise cancelling earbuds are efficient for blocking out the world around you – when all you want to hear is your music and nothing else. However, for those who want a smaller, sleeker alternative, Nuheara is the perfect fit.

Nuheara are wireless audio earbuds that are customizable to your hearing needs. Even though they have the same power as noise cancelling headphones, they can be adjusted to amplify or minimize sound based on each situation.

You can choose to blend the sounds of the streets and your new favorite album in order to be aware of the world around you. The earbuds are ideal for any situation.

The noise cancelling earbuds use SINC (Superior Intelligent Noise Control) technology, which lets every user create their custom hearing experience.

There are numerous times when it’s hard to hear because of the noise around us. This may be in crowded restaurants, concerts or even when you’re at home trying to avoid the noisy neighbor in the apartment above you.

The SINC technology applies a frequency filter to sounds you choose to hear or want to avoid. Additionally, the left and right earbuds have their own settings, so that they can be customized individually. Everything is customized through the app, so it’s up to each user to decide!

Prior to founding Nuheara, Justin Miller and David Cannington worked in the oil and gas companies creating industrial strength hearing headsets.

The feedback they received during these experiences paved the way for inventing Nuheara. People wanted a sleek headset that they could wear in everyday life, not just at their job.

The earbuds will set you back a few hundred bucks, but they come with accessories like a battery charger, carrying case and 8 different silicone tips. The battery charger provides three full charges. Nuheara earbuds are also sweat and water resistant, but they are not yet waterproof.

As wireless headphones, Nuheara are also compatible with most Bluetooth connected devices. The earbuds also use tap-touch control to make hands-free phone calls, control music and adjust settings.

There is no need to connect Nuheara to external devices to use their noise cancelling capabilities.

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Tech News

Turn your FAQ page into a chatbot without knowing how to code

(TECH NEWS) An easy way to add a chatbot to your site and automate some of your work is through this new simple tool that doesn’t require any tech know-how.

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faqbot chatbot

Reduce your workload and personalize customer service engagement with Faqbot, the tool that turns your online FAQ into a customized chatbot.

Co-founded by Denny Wong and CEO Mathis André, Faqbot uses machine learning to streamline frequently asked questions into a handy chatbot pal.

Based on your existing FAQ content, Faqbot builds a database that learns from every conversation to improve responses. Faqbot can also be used to automate sales and lead generation.

You get to design the conversation flow, mapping out a custom path to guide users to a desired outcome. Set predefined choices or free text, customize the bot’s responses, and determine what leading questions the bot should ask.

For example, on the Faqbot site, I was given two pre-set choices to click after each response from the bot. Clicking “Thanks for helping” gets the polite response “You are welcome! ;-)” complete with an old-school emoji featuring a nose.

If you select “not my question,” Faqbot uses its general response to any unanswerable question: “Sorry, I’m a chatbot. I am constantly learning and have answers to frequently asked questions. Thank you for leaving your email and we will get back to you shortly.”

Choose your own responses based on already defined FAQ or come up with new messaging to better engage and inform your customers as needed. The free text option is also available if customers wish to continue asking questions.

Of course, I had to try out some less than frequently asked questions. When I asked Faqbot “are we friends?” it kindly replied, “Absolutely. You don’t have to ask.” So I’m smitten.

However, when I tried to take it to the next level by asking “Do you love me?,” which seems to be the internet’s favorite way to harass a bot, I got the “Sorry, I’m a chatbot” response.

That’s okay. I’ll recover. Faqbot isn’t here to love, it’s here to answer questions.

You can easily install the chatbot by either copy/pasting the snippet of codes directly into your webpage, or connect Faqbot to your company’s Facebook page. No coding skills required.

Pricing is based on number of users per month, but all levels include the same service offerings of FAQ database management, messaging interface, a ticketing system, and DIY guided conversation flow. You can try out Faqbot free for 14 days by signing up on their site.

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