      
 Reserve Not Met – ExplainedPublished: Thursday, April 09, 2009 Reserve Not Met -- ExplainedNothing is more disappointing than to hear the gavel fall at a real estate auction only to be told later that your winning bid did not meet the seller's reserve price. You know from your pre-bid information that a reserve price might be applied, but without knowing what that reserve price is, you go into a bid with little more than your own instincts and your pre-qualification letter. What is a Reserve Price?A reserve price is the seller's undisclosed bottom line that the real estate auction must reach before they will consider accepting a winning bid. A reserve price is not the same as the starting bid. Sellers will often set low starting bids to entice bidders into a sale, hoping to generate competition among bidders and raise the final selling price to an acceptable level. But hidden somewhere in that bidding frenzy is that undisclosed amount, the drop dead figure they really want to reach before they would consider parting with the property, their reserve price. Say for example a property's starting bid is $5,000. The bidding rises in $5,000 increments and finally closes at $80,000 and you're the winning bidder. But you find out later that the reserve price was $90,000 and therefore the reserve price was not met and the seller backs out of your deal. This can be disheartening, but remember, no deal is lost until someone else closes escrow. The Good News and the Bad NewsThe bad news about hearing "reserve not met" is that you don't walk out of the auction a successful bidder. The good news is you now know the lender's drop dead price. You can negotiate later, after the pressure of the auction has subsided, and close the deal at a price that is still a foreclosure bargain yet meets the seller's needs. Auctions are fast paced venues for finding foreclosure bargains. Some of the best Southern California foreclosures are offered at auction, including Riverside County bank homes and coastal Orange County foreclosures. Don't be discouraged if you hear the words "reserve not met." Simply bide your time and approach the lender one on one. You will be surprised at how easy it is to come to terms, once everyone knows what the bottom line is. Other Recent ArticlesHome Buyer Tax Credit Extended Until April, 2010Category: Recent Articles Published: Thursday, December 10, 2009 The federal tax credit has been extended to April, 2010, including an expanded benefit to existing home owners who sell their homes and then repurchase a new primary residence valued at $800,000 or less. This could be the perfect opportunity for buyers who wanted to cash in on home auction bargains but were fearful of lower resales on their existing homes. 57,000 Foreclosures Remain in California – Lenders Scheduling More Home AuctionsCategory: Recent Articles Published: Thursday, December 03, 2009 The Southern California foreclosures market may be shifting, with fewer homes entering foreclosure than in previous quarters. However there are still 57,000 existing foreclosures statewide that need to be sold, and lenders are looking at foreclosed home auctions as a major tool to sell large numbers of foreclosures in a short amount of time. Southern California Foreclosures Still the Bulk of Home SalesCategory: Recent Articles Published: Friday, November 27, 2009 Southern California foreclosures still account for the bulk of area homes sales and lenders are finding real estate auctions the fastest and most efficient method of clearing their books of REO properties. Buying a home at auction requires a little prep work, however and the experts at homeauctionexpo.com share their insight on how to find the best auction properties. |
