A distress sale—also called a distressed sale—occurs when a property, stockpile, or other asset must be traded quickly. Distress sales often result in a fiscal loss for the retailer who, for reasons of economic pressure, must receive a lower price. The profits from these assets are most often used to pay debts or medicinal expenses or for other tragedies.
KEY TAKEAWAYS
- Distress sales occur when the seller needs to sell an asset immediately, often to pay debts or medical expenses or for other emergencies.
- A short sale is a form of distressed sale in which the homeowner attempts to sell their property even though the current market value is below the amount owed to their lender.
- Distress sales often result in a financial loss for the seller because buyers realize that the seller is in a hurry to obtain funds and will offer a lower price.
- Buying a property through foreclosure or a distressed sale may mean that the property is in a poor state of repair.