Mortgagee sales well below market value

Research by PropertyIQ identified mortgagee sales over the last five years and the price they sold for. It found that 88% of the houses that to go mortgagee sale end up selling below market value, with only 12% selling above.

“We have determined the market value of each property at the time of sale using our E-Valuer – an automated valuation tool that uses recent sales of nearby comparable properties to calculate the estimated market value of a property. The difference between the sale price and this estimate of market value then represent whether the mortgagee sale was above or below the expectations of a normal market sale,” research director Jonno Ingerson says.

“The high proportion of properties selling below market value means that the sale prices of residential mortgagee sales is on average 16% below the estimated market value.”

Ingerson says there is a clear difference between mortgagee and normal open market sales, where on average there is no difference between the sale price and the estimated market value.