Xome.com homesearch.comSolutionstarNationstar Mortgage Holdings Auction Process is a Scam - Auctioneer Places Bids for Seller Nationwide

I had to warn my fiancee from buying her home on Xome.com's auction site, just yesterday.  When she placed a formal bid on a home, the seller referred her to the auction site to purchase the home. She was unhappy about this as she lost all rights to inspect the home - but was ready to pay more than her original bid as she really wanted the house.  There were two bids, but it never met the reserve price. Who knows how much she would have ended up overpaying, if we had not found out about Xome.com's practice of bidding up an auction, for the seller!! 

How misleading is that?  Xome.com home auction site places bids for the seller, up to the reserve price if there are no bids and will outbid another bidder above the reserve price (see terms of agreement below).  This creates the false impression that there is an actual buyer interested in buying the home at the bid price, when there really is not.  They do not clearly state this on the actual auction page.   So the auctioneer can bid up the price, per their online contract, but are not required to puchase the property.  In fact bidders whom have lost an auction to the auctioneer's bid have been later told they were the highest bidder (see BBB complaint below)!  This is fraudulent inducement and any contract based on this process is fraudelent and non-binding, in my opinion.  The entire purpose of an auction is to determine the price that an actual buyer is willing pay.  Xome.com obliterates this principle by leading potential buyers to overpay for a house that is not really worth it.  Not only is Xome.com's auction fraudulent, but any seller whom employs their site to sell their house is complicit.

Here is a complaint of an actual victim of this practice as posted to BBB on 4/4/15:

"Bidding discripancy on the property at *** S ****** St. ********* WA XXXXX
When I started bidding at homesearch.com. Ive realized that after my first bid, someone started bidding on it as well, then after we reached 98,000, Ive noticed that whenever i bid on it, it would display that ive been outbid, and i need to bid again. i kept doing that thinking that someone was on a neck to neck with me. Evrytime i get outbidded, I get an email. The bid went to 118,500, and on that bid, it still displayed, youve been outbid, bid again. I stopped right there and then when I saw the words reserve met. I said I lost it.because it said Ive been outbid.
after a minute or two, I decided to see, as to how much was the winning bid. When I clicked on it. it says that I am the highest bidder and I won the bid. On top of that I have to pay close to 6,000 dollars. I was surprised with the practice. so i checked my email. and sure it reflected that no one was bidding after 98,000 but me. I think that the computer is programmed to do that, so the bidder keeps bidding, which I believe is a wrong practice. I should have won the bid at 98,000 (+-) plus the other bid fees close to 6,000.
please let me know if my complaint is valid.
Thank you."

http://www.bbb.org/dallas/business-reviews/real-estate/xome-in-lewisville-tx-90524647/complaints

Here is their tems of agreement and the relevant excerpt:

"Except where prohibited by law, 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. Any such bids placed by the Auctioneer will not result in a Winning Bid. If the Reserve Price has not been met, the Seller (or Servicer, if applicable) is under no obligation to sell or approve the sale of the Property. "

https://www.xome.com/pages/auction-eventagreement