The most relevant literature, of which there is rather little, discusses two issues: the sale price discounts of distressed properties and the limitations of applying the traditional residential valuation mechanism on distressed properties. Many of these studies find significant sale discounts in the range of 20 percent. The more recent research generally concludes a discount in the 10–20 percent range. The authors argue that economic rationale could also support significant discounts due to significant repair cost on foreclosed properties.
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