patrick.net

Sound as if your talking about what I believe is referred to as a “reserve auction” where there is a predetermined, non-published, minimum sale price that the seller will accept. I have heard of this for cars – my understanding is that if the minimum is not met, the “winning” bidder is given the option of buying the car for the reserve price. For houses I’m not sure what the protocol is – probably depends on the type of auction.

I don’t know about the bay area, but I was at an auction here on the East Coast at my local county courthouse to educate myself on how it works – what an eye-opener! First, they wouldn’t start the bidding unless the Plaintiff (or their representative) was present (in other words the Bank) as they had “first dibs”. I know this because the trustee handling the sale presumed I was form the bank, at least initially, as I was the only one in a full suit.

Furthermore, although the stated opening bid at the auction was $200,000 per the notice the plaintiff’s (bank’s) opening bid was only $200. No one else bid, and the bank took the house back. The next one that came up, same thing. Published opening bid was $175,000, but the bank opened with a $100.00 bid. Sensing what was going on I bid $200.00 on a lark, they bid $500.00 I bid $800.00 – at which point the banks representative go visibly agitated, bid $175,000 – and needless to say, no one bid thereafter and the house reverted to the bank.

EastCoastBubbleBoy says

Sensing what was going on I bid $200.00 on a lark, they bid $500.00 I bid $800.00 – at which point the banks representative go visibly agitated, bid $175,000 – and needless to say, no one bid thereafter and the house reverted to the bank.

LOL, I think you answered all my questions with the comment above.

There is a reserve, they seem to tell you upfront (unlike typical auto auctions).

I'm still wondering if a house can sell for below the published opening bid? Say that $175,000 house reached $170,000 for example.

I suppose its technically possible, so far as I can tell.

My understanding (IANAL) is that the bank has "right of first refusal” by being virtue of being the primary lien holder. You bid $170,000... why would they take it back for $175,000 pay the back liens (if any) and then be "stuck" with it for who knows how long.

Anyone of you savvy patrick.neters ever seen this happen?

@ Robertoaribas. Thanks for the clarity. It must be slightly different out my way - but I'm going on my limited experience... not from what I've read.

This is riskier to buy than an reo because of liens that could be present? Escrow and title can help determine any existing liens. No?

Terms of auction I was at clearly stated that "all liens including back taxes are responsibility of winning bidder" and property "as is".

Each state (if not each county) is different.

I did do a cursory search on the properties over in the county deed room for those properties I was interested in prior to attending. There were back liens and back taxes owed on both of them.

I get the general sense that if your not a cash buyer your SOL at least so far as courthouse auctions go.

robertoaribas says

You don't get to inspect before a foreclosure auction

I never understood why anyone would accept such a ridiculous condition. Have an open house where people can inspect the house and then auction it. Who bids on a house not knowing what condition it's in? There's a patsy in every game...

E-man says

Ptiemann explained this in some other threads.

Ptiemann, if you are out there and have the link handy, I'd love to see it.

Thanks.