What the hell happen to my bid?

Question

This is in relation to the online foreclosure auctions. I had been waiting for a particular auction for a month for a house I wanted very badly!

I initially put in a proxy bid of 150K and the next day I went in to up my bid to 180K. When I tried to increase my bid, it gave me the error message that my bid was not high enough to win the auction. I then saw the plaintiff had entered their maximum bid, which was for the full judgement order of 310K. That was more than I was willing to pay so I sadly resigned to the fact I wouldn't be buying the house.

After the auction, it showed the plaintiff was the winning bidder with a bid of $150,100.

I am mortally confused as I was more than willing to spend that amount. I am hoping someone can explain it to me......Brian Burke maybe?

Nat C. · Answer

Thanks Wayne, I think you are spot on. I thought that may have been the situation but I needed someone to confirm it for me. I could not help thinking I had done something wrong and my naivety had led me to miss a good opportunity.

It was re-assuring to be told- "but it really matters not since the. bank was  bidding to $310k".

Wayne Brooks · Answer

Our PB county system is similar, but not identical.  It will let you enter a bid, if it is higher than current actual bid (which means you've entered at least the second highest "max bid).  A plaintiff max bid above yours usually won't prevent your bid from being entered, as long as you are the next highest max bid.  However, the system would then immediately raise the bank bid to$100 above your max bid, assuming the bank's high bid was higher. I'm not sure what happened in your case, but it really matters not since the. bank was  bidding to $310k.

Brian Burke · Answer

@Nat Chan while I can't say specifically what happened in your situation, what you are describing sounds like what we in the biz call a "high/low".  Lenders set an artificially low opening bid and then bid it up themselves up to some higher amount (sometimes even as high as a full credit bid).  I don't know why the "sold" amount reflects the initial opening bid, I would have expected it to show a winning bid to the beneficiary at an amount just above your highest proxy bid, but I'm not familiar with the system in that county so perhaps that's just the way they show it.

I can't speculate on why lenders do these high/low's.  I've heard about a dozen different reasons over the years, some of which might be correct and others may not be.  Not wanting to be a source of bad information I'll refrain from saying why this happens.  I just know it happens a lot and professional bidders are used to it.  We also don't care why it happens, we just cross that one off our list and move on to bidding on the next one.