INDUSTRY: Toronto CREW Welcomes New Members To Board Of Directors

Distressed Property

Explore what distressed properties are in Canadian real estate, how they differ from typical sales, and what risks and rewards they offer buyers and investors.

Distressed Property

May 22, 2025


What is a Distressed Property?

A distressed property is a home that is being sold under unfavourable conditions, often due to financial hardship, foreclosure, or severe physical deterioration.

Why Distressed Properties Matter in Real Estate

In Canadian real estate, distressed properties are typically priced below market value and attract investors or buyers looking for renovation opportunities. They may be sold via power of sale, foreclosure, estate sale, or under urgent personal circumstances.

Types of distressed properties include:
- Foreclosures (lender has repossessed the home)
- Power of Sale (Ontario-specific alternative to foreclosure)
- Estate sales (after a homeowner’s death)
- Homes in major disrepair or requiring substantial renovations

These properties often sell 'as-is' and may require substantial investment in repairs. Due diligence, including property inspections and title searches, is essential.

Buyers should be prepared for:
- Financing challenges
- Legal complexity
- Potential liens or encumbrances

Understanding distressed properties helps buyers identify risk versus reward and uncover value opportunities in competitive or high-priced markets.

Example of a Distressed Property in Action

An investor purchases a distressed home listed at 25% below market value due to structural damage and unpaid property taxes. They renovate and resell it at a profit.

Key Takeaways

  • Sold due to financial hardship or poor condition.
  • Often priced below market value.
  • May require major repairs or legal checks.
  • Riskier but can offer investment upside.
  • Often sold 'as-is' with limited recourse.

Related Terms

Additional Terms

Egress Window

An egress window is a window that meets building code requirements for emergency escape and rescue, typically required in basement bedrooms or. more

CRA

CRA stands for the Canada Revenue Agency, the federal body responsible for tax administration, compliance, and enforcement in Canada, including taxes. more

Common Elements

Common elements refer to shared spaces and systems in a condominium development that are jointly owned and maintained by all unit owners through the. more

Commercial Lease

A commercial lease is a legally binding agreement between a landlord and a tenant for the rental of property used for business purposes, such as. more

CCAA

The Companies’ Creditors Arrangement Act (CCAA) is a federal law that allows large insolvent corporations in Canada to restructure their debt and. more

Bankruptcy and Insolvency Act

The Bankruptcy and Insolvency Act (BIA) is a federal law in Canada that governs the legal process for personal and business bankruptcies,. more

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INDUSTRY: Toronto CREW Welcomes New Members To Board Of Directors
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