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Whoopsies I was banned!!!
Join Date: Sep 2005
Location: Trying to Escape from FLA
Posts: 4,593
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The purpose of the reserve is to protect the seller by ensuring the sale doesn't occur unless the desired $$$ amount is hit.
The reason why a seller doesn't reveal it is because the sale is an auction type situation. Hence being rational goes out the door. So by not revealing it, it increases the chances of multiple parties bidding. Once that happens. Look out, rational goes out the door and the chances increase that not only will the reserve be met, but the sale price may exceed the reserve!
Consider the converse situation. Such is common for bank auctions of homes. They set the initial price up front the majority of the time. And the majority of the time it is not a reasonable price. Thus while I've looked, I've yet to bid on a house. Others have told me similarly. While auctioned homes do sell eventually, they are not selling anywhere near a reasonable frequency to help flush out the real estate mess.
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