Trying to figure out the difference between distressed properties and repossessed properties?
According to the Business Dictionary, a distressed property can be defined as “Property that is under a foreclosure order or is advertised for sale by its mortgagee. Distressed property usually fetches a price that is below its market value.” A distressed property is being sold by the owner in order to prevent foreclosure of the property, to try and cut the potential financial losses.
On the other hand, a repossessed property is a property that is taken back into the possession of the lender, which usually is the bank. The bank will attempt to recover most of the outstanding amount of the mortgage and usually sells the property for an amount close to the outstanding mortgage. This results in repossessed property being even cheaper and more affordable than distressed property.
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