Real Estate

A Brief Guide About Distress Buildings

A distressed property is called such because the mortgage payments of the same have not been paid and the property has come under the control of the lender. If the mortgage has not been paid, then the property is subject to foreclosure. Foreclosures or pre-foreclosures are usually the causes of distressed properties. In times when the property gets foreclosed, lenders often try to sell off the property, following the laws of the state. They will usually be sold at a foreclosure sale or an auction. Distressed properties are usually just about to be foreclosed or are already under the ownership of the bank. 

How Does A Distressed Property Work?

Transaction of a distress property can take place in a business that is consistently raking in losses or is on the brink of being insolvent. The owner of the property sells the same at a significantly lower price. Another reason why properties become distressed is when the owner or the seller lacks the sufficient funds required for the renovation of the property or, as it already has been mentioned previously when the monthly mortgage has not been paid. 

Distressed properties enjoy preference among buyers for reasons like:

  • To cause a rise in the selling price of the property.
  • To trade the property at a profit.

If the buyer of the distressed asset is expecting an increase in the price of the same because of the potential for development of the geographical location. In cases like these, the buyer can decide to renovate the property and keep it as a long-term investment. 

Otherwise, the buyer of the property will buy the property from the seller at a lower price, and take care of the renovation so that it is worthy of being sold at a profit.

What Are Some Tips For Selling Distressed Properties?

Selling a distressed property can be quite troublesome. You will probably be in a race against time for eluding foreclosure of the property or crossing paths with another buyer. If a buyer is offering cash then the buyer would be extra likely to sell the property to them. Here are some tips you can keep in mind while selling distressed properties:

  • Idea Of The Property’s Value: There are many similarities between selling a distressed property and selling a house in the standard market. The only difference between a standard market and distressed properties is a motivated buyer wants to finalize the purchase of the property fast. You have to know the value of the property before you try to sell it. Knowing the value prevents you from being taken advantage of.  By carrying out a comparative analysis, you can make comparisons between the distressed property in question and the others in the vicinity for having an idea of the market value of the property. There are also websites through which you can get this job done if you feel asking around in person is daunting. 
  • Contact An Appraiser: You can conduct an appraisal of the property using a home appraiser. Their task is the determination of the value of the property through market research and visiting the property in person to have a feel of the condition of the same. A legit appraiser will give you a number that you can use as a base for the price of the property. Hiring an appraiser also involves a fee so make your research for one thorough. Appraisers can also look into the properties in probate sales
  • Repairing Or Selling As They Are: After you have an idea of the price of the property, you have to make plans about how you wish to sell the same. You can either choose to sell the property after making some renovations or you can decide to sell the same as they are. You can sell it without any reservation if you are facing financial troubles or if foreclosure is around the corner. Renovating the property, however, will come at a cost and it cannot be guaranteed if renovation that would increase the product. So, give it a long thought.

Tips For Buying Distressed Properties

There are several tips you can keep in mind before buying a distressed property. People are people. It is not surprising for owners of foreclosed properties to make some damage to the property intentionally out of anger at being pushed out. Some of them can also take appliances and/or articles from the properties so they can sell them and make some money. And when these properties are vacant, they are likely to be used by squatters who may cause further damage to the interiors of the property.


A distress property can be a good investment opportunity. Given that the competition is not as fierce as that of a standard market, do not assume that there is no competition here, though, buying or selling property can be done fast and having some cash in hand can quicken your sale twofold. 


Sanket Goyal is an SEO specialist at and is passionate about new technology and blogging.

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