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Cash offer vs. marketed auction: the math they skip.

When you are behind on payments, the only people calling are cash buyers. Their offer is fast and it feels like a lifeline. Here is what that speed actually costs, next to what a marketed auction can do with the same deadline.

By Patrick Yuri Armour, Licensed Tennessee Auctioneer·Updated July 2026

The two offers are not the same product

A cash buyer, whether they call themselves a wholesaler, an iBuyer, or a "we buy houses" company, is buying your home at a discount to resell it. The discount is the business. A marketed auction does the opposite: it exposes your home to a pool of competing buyers and lets the highest bid set the price. Both can close fast enough to beat a trustee sale. They just send the difference in price to very different places.

The cash offer sends the discount to the buyer. The auction sends it back to you. That is the entire comparison, in one sentence.

What a cash offer actually nets you

Cash buyers do not pull numbers out of the air. They price distressed property with a published formula, the 70% rule.[1] Take a home worth about $484,000 fixed up:

After-repair value$484,000
× 70% (the industry ceiling on what they will pay)$338,800
− Estimated repairs− $25,000
− Their assignment fee / resale spread− $10,000
− Required investor profit− $40,000
Cash offer to you≈ $263,800

Now subtract a $290,000 loan payoff. On paper the homeowner is underwater by about $26,000, so the buyer either asks you to bring cash to closing or walks. In practice, many sellers accept a slightly higher offer, around $314,000, that nets roughly $24,000 after the loan is paid.

What you are really paying for
The repairs, the assignment fee, and the investor margin are not services done for you. They are the price of closing in seven days instead of forty. That is a real trade, and sometimes speed is worth it. But it should be a choice you make with the number in front of you, not the only door you knew was open.

What a marketed auction can net you

Same house. Different process.

Winning bid (targeting 80 to 88% of retail)$390,000 – $425,000
− Loan payoff− $290,000
− Closing costs− $5,000
Net to you≈ $95,000 – $130,000

The buyer pays a premium on top of their bid, typically 10%, which covers the auction firm. You do not pay it and you do not see it. No listing fee, no commission from your side.

A note on the range so it stays honest: courthouse-step foreclosure auctions, which are cash-only distress sales with no marketing, historically clear around 59% of a home's fixed-up value.[2] A properly marketed sale through a licensed Tennessee auction firm, with photos, advertising, a 30-to-60-day campaign, and financed buyers welcome, clears materially higher. We model conservatively at 80 to 88%, below what many practitioners target.

Side by side, same house, same deadline

PathYou net (after $290k loan)Speed
Do nothing, trustee sale runs$0n/a
Cash offer≈ $24,000~7 days
Marketed auction≈ $95k – $130k30 – 45 days

Illustration using round numbers on a $484k-value home with a $290k loan. Your figures depend on your home's value, your balance, condition, and buyer turnout. Auction outcomes are not guaranteed. We will run your actual numbers before you decide anything.

How to use this

If you have little or no equity, or the house needs heavy work, a cash offer may genuinely be your best move, and we will tell you so. If you have real equity and any time before the sale, an auction usually keeps far more of it in your pocket. The only wrong move is taking the first offer without seeing the other number.
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Within one business day we'll show you what your home would likely clear at a marketed auction versus what happens at the trustee sale. No cost, no pressure, no obligation to sell.

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This page is general information about Tennessee foreclosure, not legal, tax, or financial advice, and not a promise about any outcome. Every situation is different. For advice specific to your circumstances, consult a licensed Tennessee attorney, a HUD-approved housing counselor, or a licensed professional. FALCO is not a government agency and is not affiliated with, or approved by, any government program or your mortgage lender. FALCO does not buy your home, does not charge homeowners or take upfront fees, and does not promise to stop, delay, or cure any foreclosure. FALCO helps homeowners sell through a marketed auction run by a licensed Tennessee auction firm.

Keep reading
The 70% formula, broken all the way down →How the Tennessee foreclosure timeline works →What if I owe more than it's worth? →See your actual numbers: free call →