What is meant by under-bidding in auction terms?

Under-bidding in auction terms refers to the practice of placing bids that are lower than the expected market value in an attempt to secure a deal for the buyer. This strategy is often used to negotiate a better price, especially when a buyer believes that the value of the item does not justify a higher bid. By under-bidding, a buyer may draw the seller's attention to their offer, with the hope that the seller may accept a lower price rather than risking the item going unsold.

This tactic can be beneficial in situations where the seller is motivated to sell quickly or when there is a lack of competitive interest in the item. Under-bidders usually aim to establish a favorable buying opportunity while navigating market dynamics, thereby increasing their chances of successfully acquiring the item at a lower price point.