The bidding process does not determine the fair market value of the foreclosure property. There are many reasons for this, but if only investors are bidding on the property, the final bid amount is usually less that the market value. The reason is simple: The investor is buying the property at a wholesale price in the hope of selling it for a retail price.

You must also consider that the property is most likely not as pristine as most properties offered for sale. The property probably has issues that affect its marketability and ease of selling. For example, it could still be occupied by a hostile defaulted borrower. The property could have major issues, such as being damaged.

Don't base the value of a property on what it sold for at a public foreclosure auction. The actual sale price at the auction has little to do with a property's fair market value.