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.

RELATED TERMS
  1. Distress Cost

    Costs that a firm in financial distress faces beyond the cost ...
  2. Financial Distress

    A condition where a company cannot meet or has difficulty paying ...
  3. Mortgage Short Sale

    The sale of a property by a financially distressed borrower for ...
  4. Workout Assumption

    The assumption of an existing mortgage by a qualified, third-party ...
  5. Real Estate Short Sale

    Any sale of real estate that generates proceeds that are less ...
  6. Sheriff's Sales

    A term used to refer to distressed public property auctions. ...
Related Articles
  1. Investing

    The Pros and Cons of Distressed Debt Investing

    Distressed debt investing is suitable for professional investors. Besides heavy risk factors to consider, this investment type can provide a large ROI.
  2. Managing Wealth

    The Pros And Cons Of Buying Distressed Property

    Real estate bargains abound, but is buying a distressed property more trouble than it's worth?
  3. Investing

    Are Distressed Homes Worth Buying?

    Here's a look at whether it is a good idea to buy a rundown home to repair for profit.
  4. Investing

    Why Hedge Funds Love Distressed Debt

    When hedge funds buy up bonds from bankrupt companies, should investors follow suit?
  5. Investing

    How To Profit From Debt Securities In Failing Companies

    Learn about the vulture funds that prey on the market's weakest companies by investing in distressed debt.
  6. Managing Wealth

    Investing In Foreclosures Not A Get-Rich-Quick Venture

    Investing in this kind of real estate takes capital, time and careful planning.
  7. Investing

    What Is A Short-Sale Property & How Does It Work?

    A short sale is an alternative to foreclosure whereby indebted owners get permission from a bank to sell their house for less than amount of the mortgage.
  8. Investing

    Helping Clients Navigate Short Sales And Foreclosures

    Both buyers and sellers can benefit from a real estate professional experienced in dealing with short sales and foreclosures.
  9. Investing

    Distressed Debt An Avenue To Profit In Corporate Bankruptcy

    Use debt securities to attack bankrupt companies and scavenge them for profits.
  10. Investing

    Use Real Estate To Put Off Tax Bills

    Find out how you can build wealth and reduce your taxes.
Hot Definitions
  1. Money Market

    A segment of the financial market in which financial instruments with high liquidity and very short maturities are traded. ...
  2. Block (Bitcoin Block)

    Blocks are files where data pertaining to the Bitcoin network is permanently recorded.
  3. Fintech

    Fintech is a portmanteau of financial technology that describes an emerging financial services sector in the 21st century.
  4. Ex-Dividend

    A classification of trading shares when a declared dividend belongs to the seller rather than the buyer. A stock will be ...
  5. Debt Security

    Any debt instrument that can be bought or sold between two parties and has basic terms defined, such as notional amount (amount ...
  6. Taxable Income

    Taxable income is described as gross income or adjusted gross income minus any deductions, exemptions or other adjustments ...
Trading Center