Opening Bid is set for $45k more than the home is even worth???


#1

I’m located in NC and this was the first foreclosure auction I’ve ever pursued…just found out that the opening bid is $326K (this is how much the current homeowner owes) however if this home was listed on the market it would only go for $279k or so…how is this possible? are they automatically expecting it to be sold back to the lender? Please help, I was looking at this home as my primary residence, not just to flip…I really want it and auction is set for this coming Monday, 6/7.
THanks


#2

I am not familiar with the foreclosure process in NC since we do not cover that area. However, the published bid is typically the amount that is owed on the foreclosing loan (principle, past due interest, foreclosure fees). In the areas we do cover (CA, WA, NV, AZ, OR) the bank gets to make the first bid which is the opening bid. This is what investors want to see. The lender can set the opening bid as high as the published bid (plus any additional interest that has accrued) or they can “discount” the bid and set the opening bid much lower. Depending on the lender/investor they may set the bid low enough to be attractive to 3rd party investors to bid against or they may have determined that they are not discounting and they will expect to take the property back and sell as a REO.