# Why isn't the minimum bid for a property its mortgage value?

It seems rather odd that the minimum bid for an unmortgaged property in Monopoly is \$1, instead of it being the mortgage value (or mortgage value -10% approximately).

Bidding may start at any price.

You can mortgage a property at any time, getting its mortgage value out of it. The only point at which I can see this making a difference is when all remaining players except 1 have less than the mortgage value in assets, which is very unlikely since the maximum mortgage value is \$200.

Imagine this scenario. I only have \$20 in cash and the only assets I own are Park Place (Mortgage Value \$175). Boardwalk is up for auction. The maximum bid I can make is \$195, which is cash on hand and Mortgage Value of Park Place. If I can buy Boardwalk for \$180 or less, I should do so. The worst case scenario would be that I would have to mortgage Park Place for \$175, and pay an additional \$5 when I win the auction. I could then mortgage Boardwalk for \$200, use \$18 to unmortgage Park Place, leaving me with \$18 which is pretty much back where I started. While this calculation isn't perfect as it depends upon how many properties you have to sell to get enough cash to win an auction, it would seem reasonable to begin the auction at/near Mortgage Value - 10%.

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From the official rules (emphasis mine):

BANKER… Select as Banker a player who will also make a good Auctioneer. A Banker who plays in the game must keep his/her personal funds separate from those of the Bank. When more than five persons play, the Banker may elect to act only as Banker and Auctioneer.

As many people who play auctions in Monopoly know, starting a typical English-style auction at a \$1 minimum bid and allowing increments of \$1 each makes for painfully slow auctions, especially for higher value properties. However, the Auctioneer's primary purpose isn't to make auctions fast, profitable, or even interesting; he's there to sell property. Selling property moves the game along, and the faster the property gets into the hands of the players, the faster everyone can get to the interesting trading and development part of the game. There should never be any cases where any property remains on the board after someone lands on it.

However, the rules explicitly state that the Banker needs to be a good Auctioneer. Any Auctioneer who lets all of his auctions run forever for no good purpose doesn't really qualify as "good". Adequate, sure. Competent, maybe. But not good.

Regardless of the starting bid, any decent auction will result in the property selling at a reasonable market price; the only variable is how long the auction runs before this price is reached. If the opening bid is too high, nobody will bid until the Auctioneer lowers it. If the opening bid is so low that everybody's bidding, he can make larger increments to weed out the cheapskates. He has many tools at his disposal to figure out what this reasonable market price is, and exactly which tool is needed depends on the situation.

An Auctioneer who knows how to control an auction as efficiently as possible to sell property is a good Auctioneer. An Auctioneer who does nothing but lets his players control the auction is just a Banker.

As the opening question states, properties will rarely if ever sell at below the mortgage value, if for no other reason than because other players don't want their opponents to get free money. As such, starting an auction at or near the mortgage price is perfectly reasonable in most situations.

However, most situations are not all situations. There will be cases where nobody actually wants the property at mortgage value; it could be because all cash is tied up in developments, it could be because people are saving up for that last property in a colour group, it could just be because nobody likes utilities. By having no fixed minimum bid, the Auctioneer thus has the option to sell the property at a loss, just to sell the property. That is his job, after all. Sell property.

Breaking one of the tools in his toolbox makes for a less efficient Auctioneer, and we don't want that.

The chances of all players being unwilling to spend \$1 on a property, which they can immediately mortgage for what is effectively a full refund, is negligible; if the price is right, any property should sell. Fixing a minimum bid in the rules would open up too many chances of a property going unsold, which would inevitably slow down the game each time someone lands on that square and the whole process starts up again.

Even a property that's immediately mortgaged can eventually be paid off and activated, or traded to other players. An unsold property is just useless.

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One reason comes to mind:
Keeping the game short.

• Monopoly is noted as a long game; when played by the rules as written, it's not overly so — 1-4 hours.
• there are points, especially on the first circle through, where the players will not have enough cash to buy everything at mortgage cost, especially Boardwalk and Park Place.
• the auctions are to get as many properties into player hands as quickly as possible; increasing the minimum bid lengthens the game by slowing this down.
• the meat of the game is the management once all properties are owned. Getting there quickly prevents the game from stagnating into a 6-8 hour grind.

Why you shouldn't mortgage properties to buy others if you can avoid it:

• Mortgaged properties, by not generating cash exchange, lengthen the game.
• Mortgaged properties can't be improved, and prevent having houses/hotels on the rest of the color group as well, due to the requirement for balanced development (a difference of 1 house is allowed)
• Mortgaged properties are essentially additional "free parking" spaces unless and until you either are forced to sell them or you hit a tax space or card.

You should go ahead an mortgage a property if you win a bid you can't afford to complete a color group; mortgage something from a different color group.

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No, you've missed the point: setting a minimum bit higher than 1 dollar lengthens the game. – aramis Mar 9 '12 at 20:29
@user1873: It's only "giving money away to other players" if no other player raises the bid up to the breakeven point. If absolutely nobody is willing to counterbid for Boardwalk while it's such a bargain, why should the first bidder not get it? – goldPseudo Mar 9 '12 at 22:09
The point is that if NOONE hash enough cash to pay the morgage cost, it can still be bought (and thus come into the game). So basically, no matter what, when someone first lands on a property, it will be bought by someone. Unless the player are being silly. – Chris Dodd Mar 9 '12 at 22:41
@user1873 The players can start at any bid; setting the minimum above 1 creates a very real possibility of no one being able to bid at all. Even at 1, it's very possible for one player or another to be unable to bid without mortgaging, but it's far rarer. There is no requirement for sequential bids, so your claim of a \$1 min lengthening things is bogus - players raising sequentially are being slow. Nothing in the rules prevents you from making your opening bid the mortgage value. Or even the cash value. – aramis Mar 10 '12 at 0:02
Slightly off the question's topic, but I do have a slight philosophical disagreement with the idea of not mortgaging properties to acquire more. I'm not a Monopoly strategy expert, but the best players I know all liberally mortgage properties and use the proceeds to drive up their rents elsewhere; one landing on a medium valued hotel will often bring in enough cash to unmortgage most it. I agree with your caveat that this should definitely done to complete a group, but I think there are enough other situations (trade bait etc.) that I wouldn't characterize it as a bad idea overall. – VolcanoLotus Mar 10 '12 at 3:03

Keeping the Rules Short

The rules as written follow the KISS principle. This avoids the necessity of worrying about edge cases where no one is in a position to buy a property without selling houses or other property that cannot be easily recouped by mortgaging the newly Auctioned Property.

Simple strategic play should keep most Auction Property from selling for less than its break even point.

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One purpose of the auction rule is to speed up the game. Basically, the designers wanted property to get in the hands of players as quickly as possible. So if the player who lands on a property won't buy it for list price, then the designers want it auctioned.

It could be that all (or all but one) players are very short of cash, to the point where they couldn't pay even the mortgage value for the property. (This is particularly true if there is a house rule that says that players can mortgage their own property at the beginning of their turn.) Then someone would get a "steal" by buying the property for less than mortgage value, then mortgaging it on a later turn.

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