A bidder offered 17.2 billion won for an apartment auctioned at a starting price of about 1.5 billion won. The bid is presumed to be a misplaced zero, but giving up the winning bid means forfeiting a deposit of 150 million won.
According to the auction industry on Monday, a bidder submitted 17.2 billion won and won the highest bid in an auction held last Friday at the Seoul Southern District Court for an apartment in Yeongdeungpo Art Xi in Yeongdeungpo-dong, Yeongdeungpo-gu, with an exclusive area of 120 square meters. The minimum sale price for the property was about 1.54 billion won. The amount recorded was equivalent to 9.2 times the appraised value.
The second-highest bidder offered 1.85 billion won, and the third offered 1.67777 billion won. Compared with the price ranges of the top bidders, only the highest bidder had one extra digit. The industry considers it most likely a simple input error, in which the bidder intended to enter 1.72 billion won but pressed an additional zero, resulting in 17.2 billion won.
Even if it was a mistake, the cost is significant. Court auctions require a deposit of 10% of the minimum sale price at the time of bidding.
The deposit for this property is about 150 million won. If the winning bidder does not pay the sale amount, this money cannot be recovered. To avoid forfeiting the deposit, the bidder would have to actually pay an amount more than nine times the appraised value, which is realistically unlikely.
This is not the first such case. Last month, a bidder also appeared in an apartment auction in Guro-gu, Seoul, offering more than 6.6 billion won for a property worth around 700 million won at market value. That bidder ultimately gave up the winning bid and lost a deposit of 60 million won.
There is a way to apply to the court for non-approval of the sale, but cases in which it is accepted are extremely rare. Relieving simple errors would open room for abuse.
As the number of novice participants in the auction market grows, erroneous bids are becoming increasingly frequent. "Apartment auctions have a low barrier to entry, so there are many novice participants, and about once a month someone writes down the wrong amount," said Lee Joo-hyun, a senior analyst at GG Auction. "Since bid forms are filled out by hand, you must always check the bid amount multiple times before submitting it."
