What is the reserve price?
last updated 2026-07-21
The reserve price is the lowest bid a bank will accept for a property at auction — the floor, not a fixed selling price. The bank sets it from a valuation. Bids must meet or beat it; if none do, the property usually goes to re-auction, often at a lower reserve.
How banks set the reserve
Before the auction the bank gets the property valued and sets the reserve price at or near that valuation. It is the minimum the bank is willing to accept, chosen to recover its dues while still attracting bidders. The sale notice always states it.
Reserve price is not market value
This is the key point for buyers. A reserve can sit below local market rates — because the bank wants a quick, certain recovery, not the last rupee — but it can also be set close to or above what the area actually commands, especially for hard-to-value or distressed property. A low reserve is a reason to investigate, not proof of a bargain.
What the reserve tells you — and what it doesn't
- It tells you the minimum you must bid.
- It does not tell you the property is worth that, more, or less.
- It does not account for dues, occupancy or repairs you may inherit.
To know whether a reserve is genuinely attractive, you have to compare it to the real local rate for that property type and area, and factor in what comes with the property. That comparison — reserve versus local ₹/sqft — is one of the checks AuctionScope helps you run before you bid.
Frequently asked questions
Is the reserve price the final price I pay?
No. It is the minimum opening bid. The final price is whatever the winning bid reaches after competitive bidding, which can be at or above the reserve.
Does a low reserve mean the property is cheap?
Not on its own. A reserve below market can signal value, but you have to compare it to the real local rate and account for dues, condition and possession. Treat a low reserve as a prompt to check, not a conclusion.
What happens if no one bids the reserve?
The property typically goes to a re-auction, often with a reduced reserve. The bank is not obliged to sell below its reserve.