I read with interest a few months ago, a forum topic about how bank sales aren't considered arm's length transactions, and how lenders (and buyers/sellers/Realtors) throw a fit when a bank sale is included as a comp in an appraisal. But as a matter of "real life", I don't see how it makes sense to ignore them. A buyer bought the bank sale, and moved in. Ya think they didn't compare prices with the MLS houses? Here's a neighborhood in my area, with 6 sales this year in a given subdivision. All fairly similar age, construction and size. 100K (MLS) 94K (MLS) 65K (dumped by bank for less than trustee deed) 66.5K (dumped by bank for exactly trustee deed) 60K (dumped by bank for less than trustee deed) 75K (trustee deed.... whadda think the end buyer will pay?) <_< A house in the area went into foreclosure a few days ago, and the bank bid was $51K. And... I didn't buy it. One reason being, that I think I'd be competing with other 60ish thousand $ bank sales for the resale. I suppose another argument could be, that somebody bought those 90+K houses. So it's "possible" to do it. But it's hard to put money into mere plausibility.