My friend went to a sheriff sale on Tuesday, the bidding opened up with the bank putting in the first bid, my friend bid 1k on top of the bank’s offer and he won the auction. Now he’s nervous thinking that something is wrong because the bank didn’t try to get more money.
While signing the papers after the sale the bank told him he would have won if he bid $1 over what they bid, they told him that they are not allowed to take any properties back unless it’s the absolute minimum bid price. I guess they are being swamped with REO’s. I live in Ohio (northeast), is it like this anywhere else?
Either way this is good to know, I might try to find a nice deal at the auction.
The bank wants their own money back. Anything over that, they don’t get to keep. They have to give it to the second or the lien-holders, or back to the borrower.
They have no motivationn to bid over what is owed to them. In fact, if they bid over what is owed to them, and they get stuck with the property, it turns into their own money that is going back to the defaulting borrower. They sure don’t have any motivation to do that.