Can anyone explain the significance of the published bid? Does a property ever sell at an auction for less than the published bid? Is it worth my time going to an auction if I think the published bid is too high? Thanks for your help.
-LAnn
The published bid is typically the estimated total balance due as of the original date of sale. This is also the lenders maximum “credit bid” (the amount they can bid without showing up with cash like everyone else).
The lender always places the first bid, known as the opening, or drop bid. In the past opening bids were very close to to the published bids, but for the last couple of years lender have been discounting these significantly. Currently that discount average 45% off the published bid. Unfortunately it is difficult to know which bids will be dropped and by how much. We do post opening bids before the sale whenever possible, but often they aren’t announced until the sale begins.
So to know the opening bid is going to be dropped you need to be present at the sale and listen for the drop bid. So you have to look at every home with a high opening bid as a potential drop bid. So I need to view every property on that given day and have my max I would pay in case if any of them get the open bid reduced. So even though let’s say their is 50 homes all with high open bids I still need to view all of them and hope the opening bid gets dropped on a few. There is no way to know before the sale date if the bid is going to be dropped. Also how do you research on Foreclosure Radar if the opening bid is a 1st loan or a 2nd loan. Also how do you research any liens on this property before the sale date.