Your Guide to Selling a Distressed Property in The Current Market

Your Guide to Selling a Distressed Property in The Current Market

With talks of an upcoming recession, selling a house in this real estate market is no easy feat. Mortgage interest rates are continuing to rise, making buying a home increasingly difficult for new homeowners. 

If you own a distressed home or a home facing foreclosure, selling it will be even more challenging. Lenders might not approve it for a mortgage, and finding a real estate agent willing to work with you might also be challenging. 

Fortunately, you can sell a distressed house, but you must know which real estate investors to target. This guide will give you all the information you need to find home buyers and realtors to whom you can make a distressed sale. Whether your home is in disrepair or pre-foreclosure, read on to learn how to get it off your hands. 

What Is a Distressed Property?

First, though, it’s essential to define what a distressed real estate property is. A distressed property is one that is facing foreclosure or is already owned by the bank. That could be because the homeowner could not afford their monthly mortgage payments or because there are liens on the home for loans they couldn’t pay off. 

A distressed property can also refer to a home in poor condition and requiring significant repairs and renovations (a fixer-upper). 

A typical real estate investing strategy is to target such homes, as they sell at lower prices than regular homes. Such real estate investors are known as house flippers. They buy houses for cash well below market prices, make the necessary repairs, and then sell them again quickly for a quick profit. 

If you can find a cash home buyer who is willing to give you a cash offer, you can sell a house fast in San Antonio and get it off your hands. House flippers tend to operate quickly due to the nature of the business—they are constantly making home sales, renovating the buildings they purchase, and then selling them for the full market value. 

However, as you will see later, house flippers are not the only types of buyers property owners can target when selling distressed properties

Different Types of Distressed Properties 

There are many reasons a house might be classified as a distressed property. Here is a short list of some of the possible reasons a house might have difficulty selling on the market, but keep in mind that this is not a comprehensive list. 

Bad Roofing 

As roofs age, they tend to decline. Roofs may experience issues such as leaks and holes, depending on the type of material. Wooden roofs may experience infestation or get eaten away by rodents and termites. 

Storms and other natural disasters can also cause a roof to get damaged. If the damage is minimal, you could repair the roof or replace only part of it. However, if the damage is extensive, you might have to replace the entire roof, which can cost a pretty penny. 

Septic Tank Issues 

Septic tanks can also experience issues. A tank can leak or experience mold buildup if it has been in disuse. 

Septic system failure goes beyond the tank—for example, pipes can burst, get clogged, or leak. Underground piping may also experience damage from expanding roots. Septic system failure might be challenging to address and require a complete overhaul of the system, depending on the severity of the damage, which can be costly. 

Wonky Windows 

Have you ever seen an old home with boarded-up windows? Over time, windows can shatter, crack, or get dirty. Vandals or animals may break into the house, and replacing all the windows isn’t always cheap. 

Infestation Issues 

Infestation isn’t always easy to spot. Mice and rats can infest attics and basements, but they’re not the only perpetrators. Termite infestation is common as well. 

Some signs of rodent infestation may include chewed wires, rodent droppings, or holes in the wall, ceiling, or floor, which they use as entry points. Scurrying and scratching noises from the attic or between the walls may also indicate the presence of rodents. 

Termite infestation is harder to spot, as they don’t make noise like rodents do. Signs include peeling paint, termite swarmers or discarded wings, or a dark line crawling up the wall that, upon further inspection, is actually a line of live termites. 

Frass, which are wood-colored droppings that look a bit like sawdust, also indicate the presence of termites and may be present on counters or floors. Termites can eat away at the walls, floors, and ceilings and eventually damage the reliability of a structure, making it dangerous to live in. 

Foundation Issues 

Foundation issues are perhaps some of the most costly to repair. A structure with foundational problems isn’t safe to live in, but fixing it isn’t simple. Common issues include cracks in the foundation or even a sinking foundation, which could be fixed through expensive methods such as polyurethane foam jacking. 

Can Distressed Properties Be Sold 

Absolutely. Many people believe that if a property is distressed, the only solution is to let the bank foreclose it. However, many real estate investors would gladly purchase a distressed home. 

We already talked about house flippers, who buy distressed properties at low prices, repair them, and make them livable before reselling them. However, other real estate investors don’t have such an aggressive strategy. 

These investors may fix up the house and then hold onto it for a more extended period. They may wait until real estate prices in the area increase and then sell it for a profit. Before they purchase your home, though, they will do a complete market analysis and forecast to better understand how real estate prices in the area are likely to behave. 

Other investors will turn your property into a rental home. They may target long-term or short-term tenants, renting it on sites like Airbnb if the area attracts many tourists or businessmen on business trips. 

How To Sell a Distressed Property 

Selling a distressed property is about knowing the right people to talk to. Typical real estate agents often avoid dealing with such properties. Instead, you need to target cash home buyers in Live Oak who are willing to pay cash for your home. 

Unfortunately, many scammers target distressed property owners, taking advantage of the fact that they are desperate to sell. Often, these scammers may not have the funds on hand. They may be newbies to the home-flipping scene. 

Perhaps they took a course on how to become rich by flipping homes and are relying on another sale to go through to get the cash to buy your house. 

These people will waste your time, drag out the process, and even lowball you, trying to change the price you previously agreed to once you are already emotionally invested in the deal. 

A better strategy is to work with a company with experience buying houses for cash. These companies are known and trusted; since they have been in the industry for years, they have the cash to finalize your deal. They won’t waste your time—once they give you an offer, they will stick by it and close as quickly as you like.

How To Sell a Distressed Property

Dos and Don’ts When Selling a Distressed Property

Before we wrap up this guide, here are some crucial pointers to remember when selling a house below market value to a cash buyer. 

First, here are some things you should do: 

  • Know the value of your home! Just because it’s a distressed property doesn’t mean you should accept an outrageously low offer. If you aren’t getting an offer from an established company, hire an appraiser to perform a comparative market analysis. 
  • Ensure the seller has the necessary funds. Ask them to provide a proof of funds letter from their bank. 
  • Disclose all problems the house has. Ensure you are honest and the buyer understands what they are getting into. 
  • Use an escrow service to ensure you get the funds and the sale goes smoothly. 

Here are some things you should avoid: 

  • Dealing with untrusted cash buyers. If you list your home as for sale by owner, you will likely be contacted by all sorts of sketchy buyers. It’s better to work with a trusted company to avoid the hassle of verifying each potential buyer. 
  • Using a real estate agent. A cash buyer will finalize the deal quicker. A real estate agent will also charge a commission, which is a big deal if you are already selling your home at a low price. 
  • Making repairs. One of the benefits of selling to cash buyers is that they will work with a homeowner selling a house as is


Selling a distressed home isn’t as difficult as people think it is. If you work with a trusted company, you will get a fair price for your home and get it off your mind in a matter of weeks. 

We buy houses Texas homeowners need to sell quickly. Contact us to start the process. After showing us your home (or sending us pictures), we will provide you with a fair estimate and close on your schedule. You can have your cash on hand in as little as a few weeks. 

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