How is the opening bid determined on a property?
The banks that loaned the money sets the starting bid priced based on their opinion of value and the amount owed. Sometimes they get it right. Sometimes they don’t. When an original bid is either too high or too low, and bank will sometimes drop the bid or raise the starting bid based on the level of interest or some other information that came to light on the day of the auction. Properties that don’t sell at auction return to the bank and are usually listed as REOs in the retail market.
