What are distress sale, distress price and distressed asset?

Distress Sale: A distressed sale occurs when the owner of the asset like property, stocks or any other assets, pressed for urgent sale which is usually under disparaging conditions. Distressed sales arises on account of funds tied up in an asset which is needed within a short period of time for dire need of money to meet urgent exigency like to pay for medical expenses or other emergencies.  In distress sale, assets are sold at deep discount to quickly attract buyers.

Distress price: Distress price of goods or service takes place on account of various reasons. It happens when a company chooses to mark down the price of an item or service instead of discontinuing the product or service altogether during difficult market conditions.  A company may be forced to sell its products at cheaper rate when it is unable to sell enough of it to cover the fixed costs associated with doing business.  In the other words, it is the minimum price a company can manufacture and sell an item and still turn a profit.Employing a distress price for a product or service may also be with an intension to spur sales to generate enough cash flow to at least cover operating costs of the company.

Distressed Asset: When an asset is forced to sell at cheaper rate than the usual market price or at loss, such asset is referred as distressed asset.  The owner of the distressed asset is a person who is forced to sell it at a discounted price owing to various reasons like bankruptcy, excessive debts or due to regulatory constraints. Sometime debt itself sold by the owner at below face value at similar circumstances which is known as distressed debt.

Conclusion: A distress sale is when an asset is sold quickly and at a lower price than its actual value, usually to cover urgent expenses. A distress price is a discount offered for a distressed asset, also known as a fire sale. A distressed asset is an asset that is being sold in a distressed sale.