What is a short sale?


The sale of a property in which the proceeds of the sale fall short of what the owner still owes on the mortgage. Many lenders will agree to accept the proceeds of a short sale and write off the remainder of what is owed on the mortgage if the owner is unable to make the mortgage payments. By accepting a short sale, the bank can avoid a lengthy and costly foreclosure, having to take possession of the property, and the owner is able to pay off the loan for less than what is owed.