Auctions knowing exactly what the highest bid will be before the auction starts

[BasicHumanUnit]

I'm wondering if anyone else has come across this.......

There is a website that many local and state governments use to auction off property and real estate such as foreclosures called realforeclosure

In order to bid, you MUST deposit an amount equal to 5% of your highest bid by 4:00pm the day before the auction. You are only allowed to bid up to that amount. There is no leeway, no accommodation and no exceptions (for you and me). So if, for example, there is a property you want to bid on and your highest bid will be $50,000 then you must have $2,500 on deposit no later than 4:00pm the day before the auction. Thus, the auctioneer knows precisely the highest bid you will make and that of everyone else.

Now, assuming governments and everyone in them is always honest and transparent, this "should" be no problem.
Unfortunately, is that ever true?

It seems to me that this props the door very wide open for abuse and corruption.
I can understand them wanting a deposit to ensure bidders follow through, but I say there should be a way to do this that does not convey to the auctioneer the exact high bids in advance for every bidder. Can you see where corruption could have a field day with this?
Can't they use the law to go after people who make false bids then ban them going forward? They sure have laws for everything else.

Maybe I'm wrong. Maybe you can explain how this cannot be an avenue for any kind of abuse.
While your schooling me on that, please explain how government is never corrupt.

Thanks

 

[Captain Caveman]

I'm wondering if anyone else has come across this.......

There is a website that many local and state governments use to auction off property and real estate such as foreclosures called realforeclosure

In order to bid, you MUST deposit an amount equal to 5% of your highest bid by 4:00pm the day before the auction. You are only allowed to bid up to that amount. There is no leeway, no accommodation and no exceptions (for you and me). So if, for example, there is a property you want to bid on and your highest bid will be $50,000 then you must have $2,500 on deposit no later than 4:00pm the day before the auction. Thus, the auctioneer knows precisely the highest bid you will make and that of everyone else.

Now, assuming governments and everyone in them is always honest and transparent, this "should" be no problem.
Unfortunately, is that ever true?

It seems to me that this props the door very wide open for abuse and corruption.
I can understand them wanting a deposit to ensure bidders follow through, but I say there should be a way to do this that does not convey to the auctioneer the exact high bids in advance for every bidder. Can you see where corruption could have a field day with this?
Can't they use the law to go after people who make false bids then ban them going forward? They sure have laws for everything else.

Maybe I'm wrong. Maybe you can explain how this cannot be an avenue for any kind of abuse.
While your schooling me on that, please explain how government is never corrupt.

Thanks

Well, I imagine they don't know which Lot you're gonna bid on. Also, you're willing to go up to $150,000, but put a deposit of $10,000 down instead. So then you assume that they assume you're willing to go up to $200,000, but you don't.