The math on a Tennessee foreclosure: trustee sale vs cash offer vs marketed auction

The math. One Tennessee house. Three ways out. Scroll. One number at a time.

Say your house is worth $500,000.

You still owe the bank $300,000.

The difference is your equity. $200,000. Yours. On paper, anyway.

Exit one · Do nothing. The trustee sale takes about 60 seconds on the courthouse steps. About half the time nobody outbids the bank, and it takes the house for the loan balance.

Then you walk away with: $0. That is the outcome roughly half of these sales end in.

The other half, a bidder shows up and clears your debt. In Q2 2026 buyers at foreclosure auction paid about 67.6% of value, so on this house that is a bid near $338,000.

Whatever is left after the debt is surplus. It is yours. About $38,000. But only after junior liens, only if you file a claim, and usually months later. Most people never claim it.

Exit two · The cash buyer. The investor calling you will offer around 65 cents on the dollar. About $325,000. That's the offer, not what you keep.

After your loan pays off, you keep about About $25,000.

Exit three · A marketed auction. A licensed, advertised auction typically clears 85 to 95 percent of retail. About $445,000. Run before the trustee sale date, not after.

After payoff and costs, what goes home with you: About $130,000. Same house. Same debt. Different exit.

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