Not Your Normal Broker

The Pre-Foreclosure Paradox: sales of distressed homes with equity
allow homeowners to avoid foreclosure and benefit from that equity, but the pre-foreclosure marketplace also attracts predatory behavior.

The solution is more transparency that attracts more competition,
shining a light in this dark corner of the real estate market to
protect distressed homeowners.

A deeper dive into pre-foreclosure sale data reveals that while many
of these properties may have equity on paper, most are still selling
well below their estimated after-repair market value. An analysis of more than 40,000 pre-foreclosure sales that occurred between 2018 and 2023 — after previously being scheduled for foreclosure auction on the
Auction.com platform — shows the properties sold for 18% below their
estimated after-repair market value on average.

While some discount below market value is to be expected with these
properties — many are in distressed condition due to deferred
maintenance — a look at the discount by buyer type indicates that some
buyers are getting a bigger discount than others.

About one-third of the pre-foreclosure sales went to buyers identified
in the public record data as institutions, including companies,
corporations and limited liability companies. These institutional
buyers purchased pre-foreclosure properties for 30% below estimated
after-repair market value on average.

Ways to stay in the black!
There is more to real estate than mortgages and buy/sell property...