Understanding the auction base price.

The Reserve Price is the floor price set by the bank, below which they will not sell the property. It is conceptually different from 'Market Value'.

How is it Set?

The bank hires two independent government-approved valuers to assess the property. The Reserve Price is typically set at the 'Distress Sale Value' or 'Realizable Value', which is usually 15-20% lower than the market rate to attract buyers.

Can you bid below it?

No. The auction software will not accept a bid lower than the Reserve Price. If there are no bidders at the Reserve Price, the auction fails. The bank may then reduce the Reserve Price by another 10% for the next auction attempt. Smart investors often track failed auctions to enter at the second or third attempt when the price has been slashed significantly.