September 9, 2023

What Is a Distressed Property in Missouri?

A distressed property is a real estate property in poor physical condition or facing financial difficulties. It may be a result of neglect, damage, or foreclosure. When encountering a distressed property, you may notice visible neglect or disrepair, such as overgrown lawns, broken windows, or damaged structures. 

In addition to the physical condition, a distressed property may have financial difficulties, such as unpaid property taxes, mortgage arrears, or liens. As a result you may have difficulty trying to sell your house fast in St. Louis, Missouri.

Types of Distressed Property in Missouri


A foreclosure occurs when a homeowner is unable to make mortgage payments, leading the lender to take legal steps to repossess and sell the property to recover their losses. Foreclosed properties can often be purchased at auction or directly from the lender for less than their market value.

Short Sales

A short sale is when a homeowner sells their property for less than the amount owed on the mortgage, usually with the lender's permission. While short sales can be a win-win for both the homeowner and the buyer, they can be complicated transactions that require a lot of patience and specialized knowledge.

Bank-Owned Properties (REO)

Real Estate Owned (REO) properties are those that have gone through foreclosure and are now owned by a bank or other financial institution. These properties are often listed below market value to incentivize quick sales.


In pre-foreclosure, the homeowner has received a default notice but the foreclosure process is not yet complete. During this window, a homeowner may try to sell the property, often at a reduced price, to avoid foreclosure.

Auction Properties

These are properties sold in public auctions due to various reasons such as tax liens, bankruptcy, or foreclosure. These can offer a chance to buy a property at a significantly reduced price, but they usually require immediate payment and may come with additional risks like an inability to inspect the property beforehand.

Probate Sales

When a property owner dies without a will, or with assets that must be sold to divide the estate, these properties may be sold under probate law. These sales often involve court oversight and can be complicated but may offer properties at below-market rates.

Tax Lien Properties

If a property owner fails to pay their property taxes, the government may place a lien on the property. If the owner continues to default, the property may be sold to pay off the owed taxes. These sales may offer significant discounts but are usually complicated and require a deep understanding of the process.


While not distressed in the same way as foreclosures or short sales, fixer-uppers are often priced below market value due to the need for repairs or renovation. These can offer a good investment opportunity but require additional resources for repairs.

Challenges of Selling a Distressed Property

Selling a distressed property in Missouri can present unique challenges. 

  • Narrow home buyer market: One of the main challenges is a limited buyer pool. Some buyers may be hesitant to purchase a distressed property due to the potential risks and uncertainties involved.
  • Sale price: Another challenge is accurately pricing the property. Determining the right price for a distressed property can be difficult as it needs to consider its condition and potential repairs needed.
  • Extended sales period: Additionally, distressed properties generally spend longer on the market than non-distressed properties. This is because potential buyers may require more time to assess the property's condition and evaluate the financial implications of purchasing a distressed property. 

Opportunities of Selling a Distressed Property

Although selling a distressed property in Missouri may present challenges, there are also opportunities to consider. 

Fixer Upper

One opportunity is attracting investors or buyers looking for a fixer-upper or investment opportunity. Distressed properties can appeal to house flippers or real estate investors willing to invest in renovations and repairs to increase the property's value.

Sell Your House Fast

Another opportunity is the potential for a quick sale if the distressed property is priced competitively and marketed effectively. Cash buyers, in particular, may be interested in purchasing distressed properties as they are not reliant on traditional financing. This can expedite the selling process and provide a faster resolution for the homeowner.

What Is the Best Way to Sell a Distressed Property in Missouri?

When selling a distressed property in Missouri, a few options exist. 

Traditional Home Sale

One option is a traditional home sale, where you work with a real estate agent to list and market the property. This approach may be suitable if you have the time and resources to invest in preparing the property for sale and navigating the traditional home selling process.

Short Sale

Another option is a short sale, which involves selling the property for less than what is owed on the mortgage. This can help homeowners avoid foreclosure and potentially reduce the impact on their credit score. However, short sales can be complex and require the lender's approval.

Cash Home Sale

Lastly, a cash home sale is another option for selling a distressed property. This involves selling the property directly to a cash buyer, bypassing the traditional financing. Cash home sales can provide a quicker and more straightforward transaction, but it's important to ensure that you work with a reputable buyer.

Sell My House Fast in St. Louis, Missouri

If you need to sell your house fast but don’t want the hassle of a traditional home sale, contact Paramount Realty Group. We buy houses as-is. No repairs are needed. Avoid closing costs and realtor commissions. Close in as little as seven days. Call 314-472-8937 to get cash for your home from our local home buyers in Missouri.

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