Real Estate Term of the Day: Distressed Property
DISTRESSED PROPERTY (aka: Distressed Sale) – real estate that is under foreclosure or impending foreclosure because of insufficient income production, mortgage default or other proven hardship (such as: job loss, divorce, medical emergency/sudden illness, bankruptcy or death) (Barron’s Dictionary of Real Estate Terms)
Examples of distressed properties are:
- REOs (Real Estate Owned) – foreclosure proceedings have been completed and the home is owned by the mortgagor
- Bank Owned – foreclosure proceedings have been completed and the home is owned by the mortgagor (lender)
- Short Sale (either the proceedings have been started for the foreclosure, or the sellers about to or have defaulted on their mortgage agreement)
The most common characteristic of distressed homes is the amount of deferred maintenance that needs to be addressed along with cosmetic improvements. If you are interested in purchasing a distress property, please contact me!