In the ones I’ve seen, they were *not* allowed to accept a regular offer before the property was auctioned. I don’t see ANY problem with the 5% fee. It’s very clearly stated up front on the web site, and buyers can adjust their max bids accordingly.

Figure out what the property is worth to you, divide by 1.05, bid up to that amount and no more. If you’re overbid, move on, there will be others. The only people getting screwed are the banks, but I’d rather see money in the hands of an auction company than more money in the hands of banksters.