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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 26 August 2025 F E A T U R E S T O R Y Auction.com buyers like Delille have purchased more than 45,000 vacant REOs over the last seven years. More than half of those are now owner-occu- pied (23,456), with 73% of the resales of those vacant REOs (when buyers like Delille resell) going to owner-occupants. Affordable Housing Supply A mong the vacant REOs renovated and resold, the average sale price was a relatively affordable $301,156, re- quiring 31.1% of the local family income to buy on average—including mortgage, property taxes, and insurance. That's according to an Auction.com analysis of public record data. Those not resold typically represent quality, affordable rentals. The average estimated rent for vacant REO purchases not resold was $1,591, representing 24.1% of the local family income, on average. These quality, affordable rentals go to tenants like Dana Morgan, who now rents a home that Delille, previously purchased as a vacant REO. "(We had looked at) 300 to 400 prop- erties, and none of them had a bedroom downstairs that fit the lifestyle that we needed for my family," said Morgan, describing his search for a rental prop- erty in an Auction.com video. "So, this property was perfect." More Owner-Occupant Buyers E xperienced local community devel- opers like Delille and Cunningham aren't the only buyers interested in vacant REOs, which are often more ac- cessible and appealing to a broader pool of less-experienced auction buyers—in- cluding owner-occupants. Auction.com data shows 20% of REO auction sales so far in 2025 going to owner-occupant buyers, up from 19% in 2024 to a new high as far back as data is available, 2017. Vacant REO auctions are attractive to owner-occupants and other less-ex- perienced auction buyers for a couple reasons. First, they typically come with an interior inspection and appraisal, making their valuation more certain and lessening the risk that a buyer will pick up a money pit property with myriad unexpected repairs. Because there is no current occupant, buyers don't have to factor in the additional time and money costs that come with a possible eviction. More Precise Pricing T he higher valuation certainty also means that vacant REOs can be priced more precisely by sellers, and that translates into bigger discounts—relative to after-repair value—for buyers. The average winning bid-to-after- repair value ratio for vacant REOS purchased on the Auction.com platform in the first quarter of 2025 was 54%, 6 percentage points below the ratio of 60% for occupied REOs. That 6-point delta is consistent with the long-term average going back to 2017. Conversely, the average winning bid-to-appraisal value ratio for vacant REOs purchased on the Auction.com platform in the first quarter was 83%, 7 percentage points above the ratio of 76% for occupied REOs. Because the appraisal for vacant REOs can be based on an inte- rior inspection of the property—not pos- sible with occupied REOs—the appraisal value is a more accurate reflection of the true "as-is" value for vacant properties than it is for occupied properties. Clearing Out Older Inventory T he rise in vacant REO auctions over the past three years has helped to clear out the inventory of properties that have been sitting vacant for some time, weighing down surrounding property values and undermining neighborhood stabilization. Vacant REO properties brought to auction in the first quarter of 2025 had been bank-owned an average of 345 days, down from an average of 744 days a year ago and down from an average Rising Tide of Vacant REO Auctions Vacant REO Auctions: Homeownership Outcomes Sources: Auction.com Sources: Auction.com, ATTOM