Short sale
Encyclopedia
A short sale can refer to various kinds of transactions:
- Short (finance) – the seller is not the owner of a security that he or she sells
- Short sale (real estate)Short sale (real estate)A short sale is a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property and the property owner cannot afford to repay the liens' full amounts, whereby the lien holders agree to release their lien on the real...
– the lender allows a property to be sold for less than the amount owed on a mortgage and takes a loss. This usually occurs when the market drops and the property is worth less than what the current mortgage is. Usually facilitated by a loss mitigator who negotiates that debt owed down to level where the property can be sold.