What You Need to Know About Selling a Distressed Property

How to Sell a Distressed Property

Selling a home is not easy, not only because of the lengthy processes or volume of paperwork but more so because of the preferences and needs of the home buying market. People who are looking for properties for their new primary residence are very particular, magnifying every corner and making sure that their investment will be worth it.


This puts pressure on home sellers to ensure that their properties are picture-perfect, which makes it difficult to sell distressed property. However, that doesn’t mean it’s impossible. There is a market of homebuyers looking for properties that are not perfect but they can work with with a couple of repairs, renovations, or improvements. 


The process of selling a distressed property will differ from the normal home selling process. There are a lot of things you will need to consider too. It’s important to be informed so that you can increase your chances of making a sale and receiving a good value for your distressed property. 

1. Choose your real estate agent wisely. 

Real estate agents are very knowledgeable about the home selling process and can help sellers advertise their properties and receive potential buyers. However, distressed properties are very unique, and if dumped in the regular market with a sea of perfect and well-maintained properties, making a sale will be difficult, if not impossible. 

This is why you need a real estate agent who specializes in selling distressed properties. They would have the experience and expertise to know how to classify and advertise your property, which increases the chances of you making a sale. 

2. Price right. 

The typical process of coming up with a purchase price involves looking at the different properties in your area. However, this may not apply to distressed properties. There are more things to consider and calculate when pricing homes that are not in perfect condition.


Research and crunching the numbers become crucial at this point. You should always factor in the cost of repairs, renovations, and replacements that your potential buyer would have to make. To price your distressed property right, you may need professional valuations. 

3. Set a time frame. 

Most homeowners selling their distressed properties end up taking the first offer that they receive so that they can dispose of the property immediately. Despite distressed properties being hard to sell, you can still get better offers if you wait a little longer.


When setting a time frame to sell your house, determine your priorities. Do you want to sell your house as quickly as possible regardless of the price? Or are you willing to wait for a better offer and allow your property to remain in the market for longer? 

4. Provide full disclosure. 

By default, home sellers are legally required to make full disclosures about the condition of the property. Everything from past repairs, issues, hazards, etc. should be brought to light. This is all the more important when selling a distressed property. 


Make sure you are honest with your potential buyers about the condition of the property. Otherwise, you’ll risk facing legal issues in the long run. Buyers also tend to trust sellers who give full disclosures, which can result in a faster sale. 

5. Complete all the necessary paperwork.

Real estate transactions come with a lot of paperwork and documents. Accomplishing all of these is crucial to ensuring that your sale goes successfully and that you are not put in a bad position even long after the transaction. 


A real estate agent can help you complete all the documents involved in the sale, but if you’re doing it alone, you need to do your research and make sure you don’t miss anything. 

6. Make minor improvements. 

Distressed homes can be enhanced to make them look more appealing to potential buyers. So you might consider making minor improvements or performing small repairs. However, when doing so, make sure you don’t spend too much to the point that it offsets what you are able to earn. Limit your efforts to small changes like mowing the lawn, cleaning, or giving the exteriors a fresh coat of paint. 

7. Consider other options. 

Before selling your distressed property, you might have other options that can increase your earnings. For example, you can get a bank loan to renovate your property and engage contractors to repair or replace fixtures. Making big renovations can boost the property’s market value, enabling you to make more from a sale. 


Another option is to sell your home to investors instead of homebuyers. Because they won’t be living in the property, they may be interested in it as long as they see earning potential. 

Sell Your Distressed Property to Skye Homes for Cash

Skye Homes is a direct buyer of properties across the United States. We are interested even in distressed homes and can purchase it from you as-is — without requiring you to make renovations, conduct repairs, or go through the lengthy and complex real estate transaction process. 

If you want to sell your distressed property fast and for a fair price, tell us about your property today and we’ll give you a no-obligation all-cash offer!

Jake Knight
Jake Knight

Jake Knight has been a residential real estate investor since 2016. He specializes in acquiring and renovating houses in the Bay Area, Sacramento, eventually expanding to over 15+ states. Jake’s prior experience in lending, going back to 2003, laid the foundation for solving complex real estate issues.

Drawing upon his background in assisting sellers with the task of transitioning from a home they have lived in for decades, Jake launched a “senior move management” business in 2021. This company provides valuable support to seniors during the process of packing, coordinating their moves, and downsizing as they transition into senior living communities.

In 2022, Jake expanded his services by becoming a licensed real estate agent in California, providing comprehensive solutions to his seller clients.

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