The hubzu website often has properties for bidding that state "this is a value-based foreclosure auction, which means the beneficiary has provided a bid based on market value".
However, it then states: "This is a great opportunity for buyers since the final reserve may be priced at or below current market value."
These statements seem contradictory to me, so I think I must not understand the first statement properly.
I believe the first statement to mean, for example: Beneficiary "Todd" has a property which he reasonably believes based on market conditions to be worth, say, 55,000 USD. So as I understand the first sentence, Todd has already provided (or will provide) a bid of 55,000. Therefore, 55000 is effectively the minimum bid if one wanted to attempt to acquire Todd's property which Hubzu.com is auctioning.
Other things I have assumed or seem apparent: The terms "market value" and "current market value" are interchangeable since "current" would be the default implication anyway. Second, I assume the final reserve would be something somewhere at or below Todd's bid. I did assume that the market value is not the final reserve, but some lower value. However, I cannot see the purpose of a final reserve in this situation...
If so (and why I think my understanding is flawed), it is not possible to buy the property below the market value because, even if a buyer were to bid above the final reserve, but below the market value, Todd would win the bid and retain ownership.
I have tried to google this terminology in various manners. Here is the latest search 'define "value-based foreclosure auction" -hubzu'
Can someone produce an example that demonstrates what this means and how a buyer could reasonably buy this property below the market value?