New Seller Strategy Report Provides Data-Driven Disposition Insights
Irvine, Calif. — Aug. 28, 2019 — Auction.com, the nation’s largest distressed real estate marketplace, today released its Q2 2019 Seller Strategy report, which provides data-driven insights for key disposition metrics – including time to sell, sales execution and neighborhood stabilization.
The analysis looked at various disposition strategies employed over the last year for more than 23,000 properties that went to foreclosure auction in Q2 2018 via the Auction.com platform, which accounts for close to 50 percent of all properties sold at foreclosure auction nationwide.
“By synthesizing the rich transactional data from our market-leading platform with public record and MLS data, we’re able to provide a holistic view of the disposition metrics that matter to distressed property sellers,” said Jason Allnutt, CEO at Auction.com. “At the top of that list are time to sell a property, execution of the sale price relative to loan balance and property value, and impact on the surrounding neighborhood.”
Primary disposition strategies analyzed were third-party sales at foreclosure auction, along with two types of disposition strategies for properties that reverted back to the foreclosing lender at the foreclosure auction (REO): online auction via a “Day 1 REO program”; and traditional REO sales via the Multiple Listing Service (MLS).
The analysis also evaluated potential gross rental yields for properties still unsold and in REO inventory a year after the foreclosure sale, along with a look at potential rental returns and foreclosure sales execution for properties located in Opportunity Zones compared to the same metrics for properties located outside Opportunity Zones.
High-level Findings:
- Properties sold via “Day 1” REO online auction sold on average 95 days faster than REOs sold via the MLS.
- Properties sold to third-parties at foreclosure auction executed higher relative to credit bid at the foreclosure sale than did properties sold as REO – both MLS and Day 1 REO sales.
- 56 percent of properties sold to third-parties at foreclosure auction were owner-occupied one year after the foreclosure auction date, compared to 43 percent of properties that reverted to the lender (REO) at foreclosure auction.
- Properties in Opportunity Zones that sold to third-party buyers at foreclosure auction executed 5 percentage points higher relative to reserve than properties located outside of Opportunity Zones.