Real property is land and any buildings permanently attached to it, such as home on a lot. All real property is valued in certain ways, such as a home's market, appraised and assessed values. When valuing real property, real estate brokers, home appraisers and assessors consider its material condition as well as the value of comparable nearby properties. A home in very poor condition or in foreclosure, or both, is typically a distressed property, and its value suffers accordingly.

Foreclosures and Distress Value
In real estate, a property that's in the process of foreclosure is generally referred to by brokers as being distressed. Property owners in the process of foreclosure are typically motivated to sell, sometimes greatly so. Owners of foreclosure properties may consider purchase offers well below what they'd normally accept under normal circumstances. In the case of real property in foreclosure, its distress value may be much lower than its current true market, appraised and tax-assessed values.

Material Condition and Distress Value
Real property, such as a home in need of much repair, is also frequently considered distressed. A home requiring thousands of dollars in repairs to be salable could have a distress value far below that of comparable nearby homes. Homeowners with properties in need of a great deal of repair sometimes discount list prices to attract buyers. Distressed properties in hot real estate markets, though, may experience fewer value issues because many buyers are chasing relatively few available properties

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