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59 Many distressed properties are vacant or abandoned, making them magnets for vandalism and general neglect, both of which contribute to neighborhood blight. days faster than the retail market. Of course, homes that sold to third-party buyers at the foreclosure auction were not held by the mortgage servicer at all, meaning zero REO holding costs and zero REO holding risks. BETTER PRICE EXECUTION Even without factoring in holding and resale costs, the Auction.com analysis found that distressed homes sold to third-party buyers at foreclosure auction performed better in terms of price execution relative to the seller's credit bid at the foreclosure auction. ose third-party foreclosure sales sold for an average of 116.6% of the seller's credit bid, while homes that reverted to REO and then resold on the MLS (275 days later) sold for an average of 93.2% of the seller's credit bid set back at the foreclosure auction—without accounting for any costs associated with holding and selling the homes. Meanwhile, homes that reverted to REO at the foreclosure auction but then were sold via online auction were sold for an average of 90.7% of the seller's credit bid at the foreclosure auction. Although slightly below the price execution for REOs sold on the MLS, those online auction sales closed 144 days faster on average than the MLS sales, saving servicers 144 days' worth of holding costs. DECIPHERING THE DISPOSTION DECISION TREE is all begs the question of why distressed homes sold via auction are selling faster, attracting more buyer competition, and ultimately achieving better price execution relative to seller reserve than distressed homes sold on the retail market. Auctions outperform the MLS when it comes to distressed sales for a deceptively simple reason: the inherently distressed condition of these homes tends to attract cash buyers and deter retail buyers who are using financing. is reality forces distressed property sellers into a disposition decision tree that typically ends with auction as the optimal sales method. e inherently distressed condition of most distressed properties means that many don't qualify for traditional financing options available to retail buyers. is gives the seller a choice to either sell as-is to a cash buyer or to renovate the property into financeable condition so it can be sold to a retail buyer. If the property is sold as-is on the MLS, it likely won't attract optimal competition from cash buyers because most cash buyers are looking elsewhere (i.e. at auction) to find deals.