Buyers often group several different situations under “distressed”: a lender selling after a mortgage default, an estate selling a home, a home sold as is or in need of work, or a home that's been on the market a while. They're separate situations with different sellers, paperwork and risks, and a listing rarely tells you anything about the seller's circumstances. Here's what each means for a buyer, and what to check before you offer.
Related buying situations
| Situation | Who sells | What to know |
|---|---|---|
| Power of sale | The mortgage lender | The lender's own schedule and limited representations. The lender may be able to end the deal if the borrower pays before closing. |
| Estate sale | The estate trustee | Have your lawyer confirm the trustee's authority and whether a certificate is required before signing. Estate administration can affect closing. See selling as an executor. |
| As-is / fixer-upper | The owner | Price the repairs in. Check structure, roof, wiring and moisture. |
| Tenanted home | A landlord | A sale on its own doesn't end a tenancy. Have your lawyer check the lease and whether vacant possession can lawfully be given. See investment properties. |
| Long listing period or price cut | The owner | A longer listing period or a price cut doesn't establish distress or a discount. Compare condition and recent sales. |
| Court-ordered sale | Under court supervision | Subject to the particular court order and any approvals it requires. Timing varies. |
| Municipal tax sale | The municipality, by public tender or auction | A separate municipal process. Read the municipality's notice and sale package, and get a lawyer before you bid. The listings on this site aren't a tax-sale directory. |