DEFINITION of 'Distressed Sale'

When property, stocks or other assets are sold in an urgent manner, often at a loss. Distressed sales often occur at a loss because funds tied up in the asset are needed within a short period of time. The funds from these assets are most often used to pay for debts, medical expenses or other emergencies.

BREAKING DOWN 'Distressed Sale'

Mortgage borrowers who can no longer pay for their mortgaged property, may opt to sell their property in order to pay the mortgage. Examples of situations where distressed sales occur include divorce, foreclosures and relocations.

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