Distressed property
A property under financial or physical stress: behind on the mortgage, in foreclosure, or in bad condition. Investors often target these for below-market deals.
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Part 1 of 4
Why a seller cares
A distressed home, behind on the mortgage or in poor shape, attracts investors offering fast cash below market. Knowing the label is the first step to knowing what the offers are priced against.
Part 2 of 4
A simple example
You are three months behind and the roof leaks. Two investors offer cash within a week, both around 70% of what a renovated neighbor sold for.
| The situation | What usually shows up |
|---|---|
| Behind on payments, home in fair shape | Cash offers well below market, fast closings |
| Home in bad shape, payments current | Flippers pricing from the after-repair value minus the work |
| Both | The lowest offers, and the least time to weigh them |
Distressed means somebody else's discount. Time and condition are what shrink it.
Part 3 of 4
What people get wrong
That a distressed home can only go to an investor. It can be listed; the question is whether there is time.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
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