What is a Reverse Auction?

Everyone knows what a standard auction is, but what is a reverse auction? Instead of the highest bidder becoming the winner, in a reverse auction, the lowest single or "low-solo" bidder wins the auction.

How Does It Work?

People just like you are presented with the opportunity to place a bid offer on a piece of property through 10DollarHomeDeals.com. There are two steps to placing your bid in our reverse auction. First, you will purchase bid credits, which are used to cover our administrative fee which will than allow you to place your bid on the property you would like to own. Once you have your credits, you will then use them to place your bids at the price point you think would most likely be the low-solo bid. If your bid is the winning bid, you have the sole right to purchase the property for the bid amount you placed. The cost of the property is covered by the $10 administration fee (or bid credit) you pay to make a bid.

Low-Solo Bid Explained

Your browser may not support display of this image. This auction is a timed auction and is set to run for 21 days from inception. You can place a single bid or many using any number of $1 increments (i.e. $1, $12, $25, $137, $212 etc.) up to the maximum of 10% of Fair Market Value. The bidder who places the low-solo (lowest single) bid, wins an entitlement to purchase the property when their bid is the low-solo bid at the end of the auction. Therefore, this bid must be the lowest $1 increment and no other bidder may have selected the same purchase price.

Here's an example of how it works. Multiple bids have been placed by bidders at the price points of $2, $4, $5, $11, $18, $32, $50, and so on. Of these bids, only the $11 and $18 bids are solo bids, or single bids. Of these two bids, the $11 bid is the lowest. In a reverse auction, it does not need to be the last bid placed but instead, the low-solo bid in order to be the winner. The bid must remain the low-solo bid until the close of the auction in order for the bidder to be awarded the right to purchase the property at that bid price. Should another bidder place a bid of $11 prior to the close of the auction, this amount is no longer the low-solo bid. The $11 bid has been bumped out of the low-solo distinction. The $18 bid would now be the valid low-solo bid and receive the entitlement to purchase the property.

Bids may be placed individually or in multiples, covering several price points and increasing the bidder's chances of being the low-solo bid.

STRATEGIC CONSIDERATIONS:

Please take into consideration that the strategy of waiting to place a bid towards the end of the auction is not necessarily the most successful one for example:

If at the close of the auction we didn't have a single low-solo bid the successful bidder would be determined by the two lowest exact same bids however the bidder awarded the entitlement to purchase the property would be the bidder that placed the first bid according to the electronic date stamp on the bids.

Keep in mind that at 10DollarHomeDeals.com we have capped the purchase price of all of our properties at 10% of FMV. With this being the fact it is very important to bid early since there are a finite number of first bids available.

In actuality a first day bidder has the distinct chance to place the winning bid weeks prior to the end of the Auction, and with the bidding activity of the last hours of the Auction their bid can become the Low-Solo Bid.

IMPORTANT NOTICE:

When an auction results in a Low-Solo bid at its conclusion, the participant with the lowest single bid is deemed the auction winner and is granted an entitlement to purchase the property at that bid price. The buyer will be contacted via email and provided all necessary documentation to finalize the purchase contract for the auctioned property.

Properties are sold "as-is - where-is", with no price negotiation after the end of auction. The buyer may provide their own financing but must have funds available within (7) seven days from close of auction. Seller financing will be offered in virtually all cases but; however, the offer may be withdrawn in certain extreme situations of credit unworthiness.