How do I read the bid history?

Before bidding on an auction, you should look at the bid history to understand how many Investors are bidding on a Real Estate Note, and how much money each one has offered to put up for the Real Estate Note.

The bid history shows three types of Investors:

• Winning: If the full amount of a Investor's bid is being used to fund the Real Estate Note, it will be considered "winning". If another Investor offers a price per share, however, the winning bid could become outbid.
• Partially winning: If only a partial amount of a Investor's bid is being used to fund the Real Estate Note, it will be considered "partially winning", and the outbid portion of the bid will be returned to the Investor's account immediately. If a Investor is partially winning, it is also an indication that he or she is the next Investor who will be outbid as new bids come in.
• Outbid: If none of a Investor's bid is being used to fund the Real Estate Note, it will be considered "outbid", and the full amount of the bid will be returned to the Investor's account immediately.

The bid history shows the following additional information:

• Rate:If a Investor is outbid, this shows the Investor's minimum bid. If winning (or partially winning), this shows the Investor's current winning bid.
• Amount bid: This shows the amount the Investor bid.
• Amount winning: The amount of the Investor's bid that is currently winning.
• Bid date: The date and time of the Investor's bid. If two Investors enter the same interest rate, the Investor who bid first will get preference to participate in the Real Estate Note.

How are winning bids determined?

Once there are enough bids to fund a Real Estate Note, the interest rate is determined by the number of Investors bidding and the rates they've bid.

For example, suppose a Broker is seeking to finance $1 million mortgage on a property.

Auction details

Requested Amount: $1,000,000
Investor rate: 6.25%

Bid History

• $100,000 at 5.5%
• $250,000 at 5.75%
• $350,000 at 5.85%
• $450,000 at 6.25%
• $375,000 at 6.5%
• $275,000 at 6.75%
• $150,000 at 7%

In this example, the bid-to-cover ratio is 1.95; therefore, not every bidder will receive notes. Bids will be filled from the lowest yield until the entire $1 million has been financed. This auction will clear at a yield of 6.25% and all bidders will get the yield. This feature of the auction format leads to more aggressive bidding as those who in this case bid 5.85% will receive the note at the higher yield of 6.25%.

Note: Bids shown are larger than average for illustration purposes only. IRESE encourages Investors to make much smaller bids per Real Estate Note.

Bids are sorted by the rate offered, favoring lower rates, and the time the bid was placed, favoring early bidders, until enough funds are available to fully fund the Real Estate Note. Bids with the lowest minimum rate are given priority in the bidding hierarchy, even though the Investor's minimum rate is not shown on the auction. Any bids with non-zero participation are considered "winners",in other words, when you look in the "winning" column, there is a dollar amount listed that is greater than zero.

Why am I always outbid by others who bid the same rate?

If you were outbid, it means that other Investors bid at a lower minimum interest rate than yours. Other Investors' interest rates are not displayed, so even though it might look like they are bidding at the same rate you bid, that is not necessarily the case. This hidden bid auction style guarantees the best rates for everyone involved.

If you notice that the interest rate on the auction has dropped since you placed your bid, you may still participate by placing a new bid on the auction with a lower minimum rate.