Definition of "Forced sale"

Shawn Lee real estate agent

Written by

Shawn Leeelite badge icon

Keller Williams Realty

A forced sale or forced liquidation typically means an involuntary sale of valuables or property for financial reasons. If an unpredictable or uncontrollable event emerges, a seller must resort to forced selling. A financial hardship (for example, bankruptcy), a change in the seller’s personal life (divorce or a relative’s death), or even a legal order can trigger the event. 

The accumulation of debts or a personal financial crisis can lead to forced sales. Its purpose is to pay off the debts, usually tax liens or mortgage loans, accumulated by the assets’ original owner. Regularly, a court will render a judgment in the matter, resulting in this involuntary transaction.

Forced sale in real estate

By definition, property owners sell their house or land under duress in a real estate forced sale. Sellers do so in compliance with a court judgment that specifies a well-defined sale date and other judicially determined sale conditions. A foreclosure sale is an example of a forced sale. However, there are ways to get the property out of foreclosure. There are damaging consequences of a forced sale in real estate. One might occur when the seller cannot allow current market prices for their property to determine the actual selling price. 

Examples for forced selling

Let’s consider some real-life instances of forced selling! On the one hand, owners must opt for a forced sale when a family member deceases. In addition, a forced sale is an efficient yet harsh solution to settle mortgages if the departed hadn’t met their debts. In divorce proceedings, ex-partners can also sell their properties.

Forced selling of a mutually owned property

Suppose two or more owners hold the same property (joint ownership.) And only one of the proprietors intends to sell the property. Then, they can legally ask for a forced sale of the jointly owned property in the form of a partition action or lawsuit. Thus, they can take the dispute to a judge. The court can divide the land into portions. Or it can stipulate a forced selling with the revenue split between the owners. 

The disadvantages to a lawsuit

There are several drawbacks to a partition action. A lawsuit may last six to twelve months on average. Though, there are some US states where they conclude the case and the resulting sale sooner. Still, one shouldn’t count on less than six months due to unpredictable obstacles.

Furthermore, a partition lawsuit can cost at least $5,000. And a party can contest the ruling. In the meantime, they should cover the attorney’s fees.

For this reason, local real estate agents will advise settling a dispute over property outside of court. Negotiation and buyout can be viable alternatives.


Need help as a:

I'm interested to:


I work in:

Reach out to the local professionals for help
I agree to receive FREE real estate advice.

Agents, get listed in your area. Sign up Now!

Here's what you'll get:

1. Full zipcodes coverage for the city of your choice for 3 months

2. The ability to reach a wider audience

3. No annual contract and no hidden fees

4. Live customer support/No robo calls

$75 - Any City - 3 Months Coverage
loader gif

Please wait ...

I agree to receive FREE real estate advice
I agree with Terms & Conditions and Section 5-5.9.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.


Popular Real Estate Terms

Fee payable because of late payment. For example, a mortgagor is assessed a $30 late charge by the bank for not paying the mortgage payment when due. ...

Generally, a tight market does not offer too much opportunity for negotiations.  More precisely, a tight market means a trading environment where the spreads between the asking and ...

In a broader sense, Full Disclosure means presenting all information (significant or not, classified or not) related to a certain matter. In Real Estate, the term “Full ...

Statement made by a person that is not in writing. An example is an oral representation made by a real estate broker to a prospective buyer of property. ...

The definition of net sales price in real estate is the combined total cost to the buyer of a listing, excluding any auxiliary costs such as the sales fee, appraisal fee, real estate agent ...

Intermediate debt (5 to 10 years) without periodic payments but the entire amount (balloon payment) is due at the maturity date. If full payment is not made, the lender may foreclose on the ...

The Loan-to-value ratio (LTV)  is a calculation that measures how much you need to pay for a mortgage (loan) concerning how much the asset is worth. The loan-to-value ratio in real ...

America remains a top tourist attraction worldwide, with over 79 million foreign visitors a year. Many are seduced by the American Dream and sooner or later they wonder how they could ...

Supports a structure. ...

Popular Real Estate Questions