Starting Bid
Synonyms: Opening Bid، Opening Value، Minimum Opening Bid، Upset Price (judicial sales)
Last updated: 2026-09-25
Short Definition
A starting bid is the value at which bidding on a property opens; REGA's Real Estate Auctions Regulation calls it the «minimum auction opening value», which must be set in the brokerage contract, and it differs from the minimum acceptable award value below which the owner is not bound to sell.
Overview
Legal Basis
Article 4(5) of REGA's Real Estate Auctions Regulation (REGA Board decision of 1/12/1444H) requires the brokerage contract to state the «minimum auction opening value», and Article 9(1) provides that the auction opens at that value, or at another value with the owner's written consent. In judicial sales, Article 36 of the Execution Law issued by Royal Decree No. (M/53) dated 13/8/1433H provides for the appointment of an accredited valuer to estimate the value of the seized asset, and Article 50(2) requires the auction to open at the estimated value, prohibits sale below it, and provides for revaluation of real estate if no buyer comes forward. The new Execution Law (M/237) refers the details of auction sales to its implementing regulation, which has not yet been issued.
Practical Example
In a voluntary auction of a villa in Khobar appraised at SAR 1,600,000, the brokerage contract sets an opening value of SAR 1,200,000 to attract bidders and a minimum award value of SAR 1,500,000. The auction manager opens at SAR 1,200,000 and bids climb to SAR 1,640,000, so the villa is awarded without any further consent from the owner. In a contrasting judicial example, an apartment valued at SAR 900,000 draws no bidder at that value; the execution judge orders a revaluation to SAR 820,000, the second auction opens at that figure and the apartment is sold at the level the bidding reaches: SAR 835,000.
Common Mistakes
- ✗Confusing the opening value with the minimum award value — the first is where bidding starts, the second is the price at which the owner agrees to sell.
- ✗Assuming a judicial auction can open below the valuation in the first round — the law prohibits sale below the estimated value.
- ✗Changing the opening value on auction day without the owner's written consent — a breach of the regulation.
- ✗Treating a low opening value as proof of a bargain — the final price is set by competition, not by the opening value.
- ✗Setting a bidding ceiling before adding costs such as commission and the Real Estate Transaction Tax.
International Differences
In many countries the opening value in judicial sales is tied to an official valuation. In Turkey, enforcement auctions set a minimum linked to the estimated value (muhammen bedel). In Egypt, the Civil Procedure Code sets a base price from which bidding starts in forced sales. In private auctions in the UK and the US, a low «guide price» is usually published to attract bidders while the actual reserve stays confidential. The Saudi model combines both: a binding valuation in judicial sales, and freedom for the owner to set the opening value in voluntary auctions, provided it is written into the brokerage contract.
