forced sale of property. For example, stock, bond, mutual fund, or futures positions in a portfolio may have to be sold if there is a margin call. Real estate may have to be sold because a bank is in the process of foreclosure on the property. Because distress sellers are being forced to sell, they usually do not receive as favorable a price as if they were able to wait for ideal selling conditions.
sale of property under distress conditions. For example, stock, bond, mutual fund or futures positions may have to be sold in a portfolio if there is a margin call. Real estate may have to be sold because a bank is in the process of foreclosure on the property. A brokerage firm may be forced to sell securities from its inventory if it has fallen below various capital requirements imposed by stock exchanges and regulators. Because distress sellers are being forced to sell, they usually do not receive as favorable a price as if they were able to wait for ideal selling conditions.
sale where the seller is under compulsion to sell.
Example: A distress sale may occur when a seller needs to raise cash to prevent bankruptcy or when the seller is a lender with a strict limit on REO inventory.
