Does MVP Outperform Traditional Short Sales?
In the earlier article, “How the Auction.com Pre-Foreclosure Market Validation Program [MVP] Will Change the Industry,” we introduced you to Auction.com’s newly expanded pre-foreclosure sales program.
MVP leverages the power of the Auction.com platform and its more than 6 million registered users to validate — and usually beat — offers received in the traditional pre-foreclosure sale market. Data shows that on average, a property in the MVP sells during the first auction run.
Just to review: Auction.com puts a pre-foreclosure property with an offer from a potential buyer on the auction platform and markets it vigorously. The original offer then competes with the Auction.com buyer database, which has millions of registered users.
Nearly 60 percent of pre-foreclosure properties put on the Auction.com platform in the last five months received MVP offers that beat the offers received on the Multiple Listing Service (MLS). On average these winning MVP offers were 15 percent higher than the highest offer received through the MLS. In dollars that is an average of more than $28,000 higher.
So how does MVP outperform traditional short sales?
Outperforming Traditional Short Sales
MVP is the latest evolution of Auction.com’s pre-foreclosure/short sale strategy, which started in 2013 when the company helped pioneer pre-foreclosure sales on the auction platform. Since then, Auction.com has closed more than 4,000 short sales.
Along with having extensive experience, Auction.com’s MVP outperforms traditional short sales because of the power of its 6.3 million registered user database. When a home is listed on the MVP, it has the potential to be seen by millions of buyers all over the country.
According to an Auction.com 2020 survey, only 12 percent of these buyers are using the MLS as their primary source for finding deals. However, 78 percent of these buyers use foreclosure auctions or online REO auctions as their primary deal sources.
Bottom line: Nearly 80 percent of all winning bids through MVP in the last five months came from new buyers who had not submitted the highest and best offer on the MLS.
Competitive Marketplace
MVP allows the highest and best offer for pre-foreclosure properties, because Auction.com’s consistently competitive marketplace is transparent and low-friction. Let’s compare. Over the past two years, on average, 77 percent of properties sold via online auction on Auction.com have received bids from multiple, competing bidders. Over the same period, the average percentage of MLS properties with bidding wars has been 30 percent, according to data from Redfin.
And regarding MVP results, more than 20 percent of the MLS-beating MVP winning bids have come from the same buyer who submitted the highest offer on the MLS. That means the same buyers were willing to bid higher in the online auction environment than they were willing to offer on the MLS.
To learn more about MVP, contact your Auction.com Business Development Partner.
MVP-Related Content
- How the Auction.com Pre-foreclosure Market Validation Program Will Change the Industry (article)
- How Online Auctions Deliver on the Promise of Pre-foreclosure Sales (article)
- What Is Market Validation and How Will It Help Prevent Future Foreclosures? (video)
- Why Does MVP Outperform Traditional Short Sale? (video)
Visit Auction.com/MVP for more information.