Quick verdict: Is Xome worth it, and who is it best for?
Xome is best for experienced buyers and investors comfortable with as-is risk. In short, if you can bid on distressed properties, handle unknown repair costs, and close without financing contingencies, then Xome is worth it.
However, inventory and auction rules vary by listing. Some properties are auction-only. Others are traditional listings. And if you’re buying, there’s a 5% buyer’s premium, which can add to the total cost of purchasing a home. Make sure you read each property's specific terms before bidding.
Buying a house at auction is intriguing for anybody interested in affordable properties, especially first-time buyers. But the auction process can be confusing and difficult to navigate, deterring most people from exploring these opportunities. Which is where companies like Xome attempt to bridge some gaps: Xome is an online real estate platform that connects buyers and sellers with home auctions, traditional listings, and property data.
Xome handles auctions for foreclosures, bank-owned properties, short sales, commercial properties, and some traditional listings. Unlike browsing the MLS, looking for FSBO (for sale by owner) homes on real estate websites like Zillow, or working with a realtor, Xome operates on a competitive bidding model. Properties go up for auction for a specific time period (usually a few days), and buyers submit bids on these homes.
Xome simplifies the auction process by offering free access to nationwide MLS listings, agents (who help market properties), and closing support.
How buying on Xome works
Here’s a step-by-step process for buying a home on Xome:
1. Register and get verified
Registering for Xome is free. To get access to listings and be able to place bids, you must verify your account and agree to follow the platform’s auction participation and eSignature guidelines.
2. Due diligence
This is the most important step, and you should take your time.
Search for properties that meet your goals while considering variables like location, whether you’re buying in cash or financing the purchase, or whether you’re an owner-occupied buyer or plan to flip or rent the home.
Before submitting a bid, do your due diligence. Most properties are sold as-is with no inspection contingencies. Ensure that you review the property’s documents and disclaimers to make an informed decision about whether to bid or skip.
You may find your dream home, but the property could be occupied, you can’t verify the title, or the repair costs are beyond your scope.
3. Bidding
Once you find a home that meets your preferences, it’s time to submit a bid.
You can place bids during the auction window, which varies by property. Some auctions have a reserve price, meaning the seller does not have to accept the highest bid unless it meets a minimum threshold.
However, winning a bid doesn’t mean the seller will accept your offer. They may decline if you don’t meet some terms. If someone places a higher bid a few minutes before the auction ends, the auction time will be extended to give you time to place another bid if you can afford to do so.
4. Submit deposit
If the seller accepts your bid and the property requires an earnest money deposit, you need to submit it within 48 hours.
Check the property purchase agreement carefully for specific deposit amounts (typically 3% of the total purchase price).[1] If you don’t submit the deposit within the stated window, you could forfeit your bid. Backing out of the sale may also mean losing the deposit.
5. Closing
After submitting the deposit, Xome will send you closing information along with the purchase contract. You’ll then complete financing or close in cash. Financing and title issues could delay the closing, and the property condition can be worse than expected.
Fees and costs to watch for
The winning bid isn’t the only cost of buying a home on Xome. Here are other fees and costs you should expect:
Buyer’s premium
At Xome, the buyer's premium is usually 5% of the winning bid or $2,500 (whichever is greater) added to your bid.[2] Not all properties require a buyer's premium, though. The exact amount varies by property and is disclosed in listing terms.
Closing costs
You’ll be responsible for covering all the closing costs, which vary but can average 3% of the total purchase price.[3] And because many properties are sold as-is, you may end up spending more on repairs.
Total cost example
Let’s say you win a $250,000 bid. Your earnest money deposit that’s due within 48 hours is $7,500, which will be applied to your balance at closing. At closing, you’ll have to pay:
- Buyer’s premium (5%): $12,500
- Closing costs (estimated 3%): $7,500
Total cash needed to close: $262,500 ($270,000 including the earnest money deposit)
💡 Pro tip: Always read property-specific terms to find out all the fees associated with the property.
"Buyers underestimate the marketplace commission and buyer's premium," warns Shawn Zar, a cash homebuyer at Sell My House Fast. "Plus, there's the closing costs. Add taxes, insurance, utilities, and actual repairs.”
Why users like Xome
The Xome app has a few reviews and an average 4.5 rating on Apple’s App Store[4] and a 3.7 on the Google Play Store.[5]
Two users mentioned that they bought their first home with Xome in the Apple App Store.
Xome does not have user reviews on TrustPilot[6] or the Better Business Bureau.[7]
Common complaints: What users report and auction norms
The BBB profile for Xome lists a handful of complaints. Here’s what users commonly report and how much of it is auction reality versus potential platform friction.[8]
Property listings that appear incorrect or unauthorized
A couple of complaints allege that Xome listed homes for auction that were not in foreclosure status. Xome investigates and responds to these complaints, apologizing in one case when the homeowner caught up on payments and pulled the home out of foreclosure status before the listing could be removed, and in one case confirming that the home was being foreclosed.
Listings relisted many times
A buyer reported that a property was listed repeatedly through numerous auction events that they bid on multiple times, and that they believed the platform was collecting banking information.
Xome clarified the auction history and noted that the bidder had placed bids in multiple cycles but was never the highest accepted bidder, and added that its platform doesn’t store banking information.
How these complaints align with auction reality
These are not unique to Xome. Most common auctions or foreclosure companies have these rules in place:
- Properties can relist multiple times if the reserve price isn’t met.
- Winning the top bid doesn’t override a seller’s reserve or contractual ownership restrictions.
- Auctions typically come with strict timelines for contract execution, and you should do your due diligence before you bid.
Risk checklist before you bid
Online auctions move fast. That’s why doing due diligence before bidding is important. Only bid if the situation meets all criteria on this risk checklist:
Clear title verified
Request a title report and check for liens, foreclosure status, and if there are redemption rights. "A title check before placing a bid is essential," advises Zar. "Review the sales history, work permits, and tax returns." If the seller won't provide documentation, walk away.
Occupancy status confirmed
Is the property vacant, owner-occupied, tenant-occupied, or unknown? If occupied, you may be responsible for eviction proceedings after closing, which can be costly, cause delays, and result in potential property damage.
Comparable sales analyzed
Auction listings can feel like bargains, but only if you can compare with other properties. Pull recent comparable sales of properties that closed in the last 90 days that match similar square footage, condition, and neighborhood. Your bid plus buyer’s premium, closing costs, and repairs should leave room for profit or equity.
Have a realistic repair budget buffer
"If you don't have proper access, you should estimate the property using the worst-case scenario," says Zar. "If possible, get a preliminary estimate from the contractor before participating." A common rule of is to add 20% on top of your estimated rehab cost for unexpected issues.
Buyer’s premium and deposit terms
Before bidding, confirm if there’s a buyer's premium, what the percentage is, when the deposit is due, and if the deposit is refundable under any circumstances.
Can close without financing contingencies
Most auction properties require cash or hard money with fast closings. If you’re planning to get a traditional mortgage, you may not get faster approvals with tighter closing timelines.
If you can’t verify the title, occupancy, numbers, and timeline with confidence, wait for a property that meets all of these criteria before bidding.
Xome competitors and alternatives (who they’re best for)
No auction platform is a one-size-fits-all. The perfect one depends on your experience and risk tolerance. Here are some Xome alternatives:
Auction.com
- Best for: Auction.com is geared toward experienced investors seeking the largest inventory
- Inventory type: Foreclosure and bank-owned home listings
- Fees: 5% buyer's premium or $2,500 minimum
- Transparency: Detailed listings, but due diligence remains buyer-driven
Hubzu
- Best for: Hubzu's target user is new investors
- Inventory type: Residential, bank-owned, commercial, foreclosures, and short sales.
- Fees: Buyer's premium varies by property, technology fee, and earnest deposit
- Transparency: Everything seems clear, but be sure to read the fine print of the terms before bidding
Foreclosure.com
- Best for: Broad searches without auction pressure
- Inventory type: Foreclosures, pre-foreclosures, auctions, bank-owned (REO) properties, and government-owned listing
- Fees: Monthly subscription fee of $39.80 to access extensive database
The bottom line
Xome is best for experienced investors who understand how auctions work, accept as-is condition risk, can make deposits quickly, and can estimate repair costs from limited property access.
If you’re unsure, your safest next step is to take time to watch auctions in your target market without bidding. Track which properties meet reserve, get re-listed, and which winning bids actually close.
"Buyers without experience and a financial cushion" should avoid auctions altogether, according to Zar. "If your budget is limited and there's no reserve for unexpected expenses, it's better to choose a traditional transaction."
The best resource a buyer can have is an experienced real estate agent, who can help them evaluate deals and protect their interests. Want to talk to an agent who’s experienced with foreclosures? Clever can introduce you to agents in your area who can help.
FAQ
Is Xome legit?
Xome is a legitimate real estate platform that connects buyers and sellers with home auction listings for various properties. However, it’s not risk-free. Do your due diligence before making bids.
Can you inspect before buying?
It depends on the property. Most sellers allow limited inspection windows, while others don’t permit access until after closing. Even when allowed, inspections are not comprehensive with contingencies.
Are there extra fees?
Yes. After you win a bid, expect to pay a 5% buyer’s premium or $2,500 (whichever is greater), a 3% earnest deposit, and closing costs.
What if the property is occupied?
You may be responsible for legal eviction, which can cost thousands depending on your state. Make sure you confirm occupancy status before bidding.
How does Xome compare to Auction.com?
Auction.com offers a larger inventory, which includes more investor-grade and bank-owned homes; its target user is an investor. Xome has a smaller inventory and is geared toward both owner-occupant buyers and investors. Both charge 5% premiums and require fast closings.
What should I do before placing a bid?
Verify title status, confirm occupancy, run comparable sales from the last 90 days, estimate repair costs with a 20% buffer, and ensure you can close without financing contingencies.