Absolute Auction

What is an Absolute Auction in Real Estate?

Absolute auctions are a type of auction in which the seller MUST accept any high bid, even if it falls below the seller’s intended minimum.

Some absolute auction agreements do come with a buy-out option, which allows the seller to reject the current high bid (usually after paying a fee to the bidder and the auctioneer).

When a real property is auctioned in foreclosure, it can be an absolute auction. However, the lender will typically instruct the auctioneer that it requires a minimum bid, usually the loan default amount or the fair market value. If the highest bid is below that minimum amount, the auctioneer will submit an automatic bid from the lender for that amount.

For more information, see also the following entries:

  • :Auction:
  • :Buy-Out Option:
  • :Auction With Reserve:
  • :D efault:
  • :Foreclosure:
  • :Fair Market Value:
  • :Minimum Bid:
  • :Mortgage Loan:
  • :Real Property:


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