Strategies for foreclosure bidding?

Question

Yes we know they go to the high bidder. At a recent auction which was held inside the court room, the bank of course bid first and made some second and third bids but dropped out. The lawyer who represented all the banks had his back to the crowd and a couple times turned his chair around so he could see "who" are these people bidding higher and higher above the judgement. On one, after the bank dropped out, two men went back and forth with increments of $500 or more. They went on and on, $73K, $73,500K, $74K, etc. Then out of nowhere after those men had gone back and forth about 15 times, a woman jumps in. Her strategy was to not enter the bidding at the beginning but near the end. She bid maybe 3 times and dropped out. 

Another strategy would be to listen to the bids and when the judge says "going once, going twice" ..... jump in there before she can say "sold for $xK." 

That plan would be close to eliminating the two who were going back and forth when one of the men "paused" causing the judge to begin her "sold message." 

Any other strategies? 

We were going to bid on one but then the bidding past our budget so we just waited to see the result. 

Answer 1

Everything you talk about seems fairly standard.  The bank will typically bid to where they are owed money and then drop out permanently. This may be their opening bid or they may open below their top bid to try to drum up interest but once they hit the amount they are owed, they will drop. 



For bidding against other investors, have your max bid figured out beforehand and bid to that number and dont' go above it (maybe a bit above it if there is still alot of profit and you think the other guy is about to drop - there is a bid of judgement in all this, but don't go to high).



As to how you bid, it doesn't really matter if you start bidding or come in later, or whatever, but take it slow.  If you put a few bids together in a row and so does the other guy, then just stop for a few seconds, and let the auctioneer do the "going once" thing before going back in. This has the negative effect of making the other guy think you are about to drop but after another bid of 2, thsi isn't the problem. This has the positive effect of making the other guy think about it - "Is it really worth that much?" and also if the other guy is close to his max bid, this make him drop a bit faster.



When I go I typically don't bid at all.  I'm often one of the cheaper buyers so I will just sit there and wait for them to go above my price, whcih they usually do.  If I think the bidding may not reach my price then I go in and slowly bid to my price - it works for me.

Answer 2

realtor.sailer is not given as a choice for best answer.  ??? I think this happened previously.





 All 9 auctions were sold for more than the judgement + court fees, legal fees, etc. 

Answer 3

You're making this more complicated than it is.



"Yes we know they go to the high bidder."



Bingo.  So if you want a property you figure out the maximum you are willing to pay for it and then walk away if you are outbid.   It makes zero difference when you enter the bidding or how many times you bid.

Answer 4

When a foreclosure is auctioned at the courthouse the bank will bid up to the mortgage balance (and expenses).  Any higher bids will go the non bank bidder.  But that doesn't happen too often as most mortgages are under water.