Xome Review: Is Xome's Auction Platform Worth It?

If you’re trying to sell a home quickly, especially a distressed or investment-grade property, you may have considered using an auction site like Xome. Xome offers sellers a fast alternative to the traditional MLS listing process, but it comes with major tradeoffs that could leave you with less money in your pocket. We’ll unpack some of them below.

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Who does Xome work best for?

Xome offers sellers a way of putting their distressed or investor-grade properties up for auction so that they can reach a nationwide pool of potential buyers. While Xome, like other auction sites, offers some benefits for specific types of sellers, it’s not for everyone.

Xome might work for you if:

• You need to sell quickly. Xome auctions can be very fast, often just three to six days, and closing is often around 20 days. By comparison, trying to sell on the open market can take two to three months depending on your location, and even longer for hard-to-sell properties.
• Your property requires major repairs. “Auctioned properties are most often properties that have a distressed condition or are in need of significant renovation or remodeling and typically appeal to experienced investors who are knowledgeable about the cost involved with purchasing a property and renovating,” says John Gardepe, Founder at The Best Cash Home Buyer.
• You’re selling a financially distressed property. Homes that are financially distressed, such as those facing foreclosure, bank ownership, or short sales, are eligible for Xome. Cash investors tend to be less scared off by these financial situations than traditional buyers are.

The main benefits of Xome are speed and the ability to reach a wide pool of potential investors. However, keep in mind that investors need to buy at a discount in order to make a profit, so you should expect to sell for less than you would on the open market.

As a rule of thumb, investors follow the “70% rule”, meaning they aim to pay no more than 70% of the after-repair value (ARV) of the property, minus the cost of repairs. Our own investor survey found that while 56% of investors will offer up to 70% ARV, about 77% say they’ll go up to 80%.

Pros and cons to consider with Xome

✅ Potential cost savings for sellers

Xome is free to use for sellers. There’s no service fee and no traditional real estate agent commission, which is usually otherwise around 5-6% of the sale price. Instead, costs are shifted to the buyer in the form of a 5% Buyer’s Premium.

That said, you’ll still have to pay other closing costs, like transfer taxes and title fees. Plus, while you technically aren’t paying the Buyer’s Premium, savvy investors are baking that extra cost into their offer amounts. The result is that buyers may offer less than they would otherwise in order to help cover the Buyer’s Premium.

✅ Fast way to sell properties

If you need to sell your house fast, an auction website like Xome is a viable option. Auction periods last for just three to six days. “The primary difference between selling through an auction site and through the MLS is the speed of closing, says Michael Ruark, Founder at ILM Home Offer. "Buyers from an auction site tend to be more motivated to complete their purchases in a timely manner and understand the real cost of acquiring a property that may require renovation.”

Xome’s seller platform is also useful for investors looking to sell multiple properties quickly. You can list multiple properties for auction at once, immediately reaching a network of over 875,000 registered bidders.[1] This streamlined platform makes selling in bulk faster than if you had to list each property on the MLS.

✅ Sellers have a safety net with the reserve price

When you put a property up for auction on Xome, you set a reserve price. This price is the minimum amount you’re willing to accept for your home. The price is hidden from buyers, with the listing only stating whether or not the reserve price has been met. If it isn’t met, the auction ends without a sale and you’re free to re-list.

While setting a reserve price is not unique to Xome and is fairly standard in auctions, it is nonetheless a useful way of protecting yourself from selling for too little. Plus, even if your property does sell for above the reserve price, you’re still free to back out since auctions are nonbinding.

❌ Offers will likely be below market value

Buyers on Xome are almost all real estate investors who are looking to make a profit after fixing up a property and reselling it at market value. For that reason, they’re looking for significant discounts on the purchase side. 

"Potential auction bidders usually have limited time to review the property before placing a bid," adds Michael Ruark, Founder at ILM Home Offer. He notes that they will often rely on just "the inspection report, the property disclosure statement and comparative sales to establish their bid amount." The added risk of the unknown can result in lower bid prices.

While the auction process can help drive up the price somewhat, there’s no guarantee that it will. Investors have parameters they’re working within and are unlikely to let emotions cloud their judgment. Unlike traditional buyers who are looking for a home to live in, investors often have a much easier time moving on if the price becomes too high.

❌ Buyers face significant risks with as-is properties

For buyers, Xome comes with significant risks since most properties are sold as-is. Inspection contingencies are rare and you’ll likely be unable to visit the property in person before buying. While sellers are required to provide accurate information about the property’s legal status and condition, some online reviews suggest that some properties are listed for auction without clear title or verification.

While you may be able to pursue legal recourse if you buy a property that has been listed with inaccurate information, doing so could be costly and time consuming. On top of that, you’ll need to pay the 5% Buyer’s Premium and a $1,000 deposit, which could further eat into your margins.

❌ Buyers could lose out on nonbinding auctions

Auction outcomes are nonbinding for sellers, giving them the opportunity to reject your bid and walk away. While that’s great for sellers, it presents problems for buyers. Even if you win an auction, there’s no guarantee you’ll actually close on the property.

While you’ll be refunded your $1,000 deposit if the seller backs out, wasting time on an auction that goes nowhere is frustrating. Plus, that deposit will still have been tied up during the auction period when it could have been used on another bid that might have had a better outcome.

How Xome works for sellers

Selling on Xome is generally straightforward, with the platform guiding you through each step. Here’s how it generally works.

• Sign up for a free account. When signing up, you’ll need to complete an ID verification process and upload the required seller disclosure. Once verified, you’ll get access to the seller portal. Note that if you’re selling your primary residence, you’ll need a listing agent.
• Create your property listing. You’ll need to add your property details, photos, and key information. You’ll also need to create a reservice price, which is the minimum amount you’re willing to accept, and your listing price, which is a higher amount. Buyers will only see the listing price, not the reserve price.
• Xome reviews your listing. Xome will verify your listing and then post it on their website. If you’re working with a Xome agent, they’ll coordinate showings during the pre-auction period.
• Receive offers during the auction. The auction period usually runs for three to six days during which buyers submit bids in real time. However, foreclosures can last for up to a month.
• Accept or reject the winning bid. If the highest bid exceeds your reserve price, you’ll be able to accept it, reject it, or make a counteroffer. If no bid reaches the reserve price, you can re-list the property. If you accept a bid, the closing process will begin and you’ll sign a purchase agreement.
• Closing process. Closing typically takes around 20 days for cash transactions. During closing, the transaction moves to escrow through a title company. You’ll be responsible for standard seller closing costs, except for realtor commission.

How Xome works for buyers

Buying a house on Xome is primarily suited to investors, although traditional DIY-minded buyers can also find houses, often at a discount. The process for buying a house differs a lot from the normal homebuying process, so you’ll want to be prepared.

• Register as a bidder. To buy a house on Xome, you’ll first need to register as a bidder. While registration is free, you’ll need to submit a $1,000 deposit for each auction you bid on (which will be refunded if you don’t win).
• Research properties. Most properties on Xome are sold as-is and cannot be inspected prior to auction. Do as much research as you can, such as reviewing disclosure and title history. But remember that this information is provided by the seller, so even if everything looks legit there’s still some risk involved.
• Place your bid. Most auctions take place during three- to six-day windows in predetermined increments. You can choose to either bid incrementally yourself or submit a maximum bid and let Xome manage the increments for you. If you’re a new user, you may have bidding limits.
• Auction finishes. If you don’t win the auction or the reserve price is not met, your deposit will be refunded. If you do win, you’ll receive an email confirmation and you’ll need to complete a checkout form within 24 hours. However, keep in mind that at this point sellers can still reject your bid or make a counteroffer.
• Sign the purchase agreement. If the seller accepts your offer, you’ll need to make an earnest money deposit within 48 hours and sign the purchase agreement. Keep in mind that you’ll need to pay 5% of your winning bid or $2,500 (whichever is greater) as a Buyer’s Premium.
• Close in 20 days. Xome aims to complete closing in 20 days for most properties. Most properties on Xome are cash only. If you’re using traditional financing, you may have trouble getting approved since most Xome properties are sold as-is and don’t include an inspection.

How much do investors on Xome pay?

Xome is an auction site that encourages buyers to compete for properties. Sellers can also set a reserve price (i.e., the minimum amount they’ll accept for a property). In theory, these two factors should help sellers get more for their property than if they went directly to a single investor.

However, in practice you’ll need to be realistic that homes on platforms like Xome often have a built-in price ceiling. Most buyers are investors who are looking to buy at a discount, generally around 70% of the after-repair value (ARV), minus repairs. So, if your home could sell for $300,000 on the open market if it was in good condition but needs $30,000 in repairs, investors will typically pay around 70% of $270,000, which is around $189,000.

But in practice, not every investor will follow the 70% rule. If your property is desirable, such as if it’s in a competitive market, then investors may be willing to pay more for it. On the other hand, if investors are worried that your property will be difficult to resell, they may pay even less than 70% ARV.

"Strong appreciation potential and high demand make higher percentages feasible, while lower property values and slower appreciation require more conservative offers to maintain profitability," advises Efrain Lopez of House Love Treatment Buyers.

"The property's location and the extent of needed renovations heavily influences our offers," says Charles H. Chandler III, CEO and Founder of My Tennessee Home Solution. 

Xome fees and other costs

Xome is free for sellers. The only costs that sellers have to cover are standard closing costs, such as transfer taxes, title fees, and prorated property taxes. These fees would apply in any real estate transaction and are not unique to Xome. In some cases, especially short sales, the closing costs may be split between the buyer and seller. Sellers can also ask buyers to cover closing costs.

Most of Xome’s fees fall on the buyer. The costs you may have to cover as the buyer include:

• Buyer’s premium: 5% of your winning bid or $2,500 (whichever is greater).[2]
• Closing costs: In many transactions on Xome, the buyer may be asked to cover all closing costs, which will come out of the proceeds of the sale.
• Bid deposit: You’ll need to deposit $1,000 for each bid you participate in. If you win, it’s applied to your earnest money deposit. If you lose, it’s refunded.
• Earnest money deposit: If your winning bid is accepted, you’ll need to supply an earnest money deposit within 48 hours.[3]

How to compare Xome to alternatives

When comparing Xome to alternatives, such as cash buyers, iBuyers, or other auction sites, you’ll need to look beyond just the potential sale price. Here are aspects of each site to keep an eye on:

• Earnest money deposit: A higher earnest money deposit signals a stronger commitment from buyers. On Xome, buyers are required to submit an earnest money deposit within 48 hours. If you’re a seller, watch out for buyers offering very low deposits or who try to delay their deposit, which could be a sign they’re not serious about buying.
• Inspections and as-is policies: On Xome, most homes are sold as-is and without inspections. While this is great for sellers since deals won’t fall through because of a failed inspection, it’s a big risk for buyers. Alternative sites may offer better protections for buyers, such as mandatory inspections.
• Assignment clauses: Some investors include assignment clauses in their purchase agreements that allow them to transfer the contract to a third party (usually a wholesaler). While this is usually perfectly legal, it can create delays and it increases the risk of the deal falling through. When comparing buyers on Xome and elsewhere, ask about whether the contract prohibits assignment.
• Contingencies and cancellations: Xome’s non-binding auction results give buyers and sellers the ability to walk away even after an auction has concluded, which can be seen as a positive or a negative depending on your role in a given transaction. Pay attention to overly broad contingencies in any purchase agreement, both on Xome and elsewhere, that don’t set clear standards for cancellations or approval.
• Closing timeline: Xome claims that cash deals generally close in 15 days, while financed deals take 30 days.[4] However, some reviews suggest that this timeline depends on using Xome’s preferred title service.
• Buyer verification: Particularly for auction sites, you want to ensure there’s a process for verifying that buyers are legitimate. One advantage of Xome is that buyers have to submit to ID verification in order to register, plus they have to submit a $1,000 deposit to participate in an auction.

Xome vs. alternatives

» MORE: Looking for more cash buyers near you? Check out the best companies that buy houses for cash to see our comprehensive guides for all 50 states. 

Xome reviews and complaints

Source	Average Rating	Review Count
Google	4.3	102
Weighted Average:	4.3	102

Xome reviews are mostly positive, with an average rating of 4.3/5 across 102 online reviews. However, it should be pointed out that recent customer reviews are very hard to find. In fact, of those reviews, only three are from within the past two years, which makes it difficult to assess the quality of Xome’s services today.

In general, customers say Xome is a good place to find distressed properties. However, there were a number of complaints about high buyer fees and homes being sold with undisclosed issues.

✅ Good for finding distressed properties

Xome’s main appeal to buyers is that it makes it easy to find distressed properties for sale. If you’re an investor, having a single place to find many discounted properties is highly convenient.

❌ Problems with purchased properties

The biggest risk of buying on Xome is that properties are sold as-is. While sellers are required to disclose known issues, some reviews suggest this doesn’t always happen.

❌ High fees for buyers

A couple reviewers noted that Xome charges buyers high fees. In particular, buyers complained of the 5% Buyer Premium. Others noted the extra fees to use its title service and that, if you didn’t, you risk a much slower closing.

Is Xome a legit auction site?

Yes, Xome is a legit auction site. It was founded in 2012 as part of Nationstar Mortgage, which later rebranded as Mr. Cooper Group.[5] Mr. Cooper Group is itself a subsidiary of Rocket Companies, one of the largest mortgage lenders in the country.[6] The CEO is Chris Marshall, who was Former Vice Chairman and President at Mr. Cooper.[7]

While Xome is legitimate, there are some red flags to be aware of. For one, there are very few recent reviews of it online. As mentioned above, we were only able to find three online reviews from customers in the last two years, all of which were negative.

Also, a handful of reviewers mentioned issues with undisclosed defects on properties they purchased. While sellers are required to disclose known defects, including title issues, not all do, which can create problems for buyers who purchase a property without doing an inspection or title search first.

What kinds of properties are sold on Xome?

Technically you can sell almost any type of property on Xome, although there’s a particular emphasis on distressed properties, particularly:

• Homes in poor condition
• Foreclosures
• Bank-owned (REO) properties
• Short sales and pre-foreclosures
• CWCOT properties (HUD-backed, cash-only properties, also known as 2nd Chance Foreclosures)

Unlike in traditional real estate transactions, as-is sales are the norm on Xome rather than the exception. While you may be able to ask for an inspection after you win the bid, there’s no ability to inspect a property before bidding.

Also, sellers should be aware that while you can sell a primary residence on Xome, you will need a listing agent to do so. For properties that aren’t your primary residence, no listing agent is required.

Bottom line: Is Xome right for you?

Xome is a legitimate auction platform, but it’s really only suitable for specific types of sellers and buyers. If you have a distressed or less-than-perfect property you need to sell quickly, then Xome could work. Likewise, if you’re an investor looking for discounted, as-is properties to add to your portfolio, Xome is worth considering.

But for most people who are simply looking to buy or sell a home, Xome isn’t a good fit. Buyers are mostly investors and no amount of bidding is likely to result in a sale price that comes close to market value.

According to Matt Bigach, Co-Founder of Nexus Homebuyers, “Sellers should avoid utilizing auction platforms when selling highly polished, move-in ready homes. In these instances, properties will typically benefit more from retail exposure through MLS listing than through an auction platform, which is primarily investor driven.”

Besides, if you’re looking to sell quickly by getting a cash offer, you have other options. You can look at other platforms, such as other cash buyers or even by talking to a real estate agent, to see what you can get elsewhere. Getting even one or two competing offers could net you significantly more from your home sale — and with platforms like Clever Offers, comparing options doesn't have to take a lot of time.

👉 Compare legitimate offers from a nationwide network of vetted cash buyers — it's fast, secure, and free.

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