A real estate short sale is an offer of a property at a sale price lower than the amount owed on the current owner's mortgage. A short sale occurs when a homeowner with serious financial problems sells their home for less than what they owe on the mortgage. The original mortgage lender keeps the entire proceeds of the sale and forgives the difference or receives a deficiency judgment, requiring the original borrower to pay what is left over. A short sale is the sale of real property for which the lender is willing to accept less than the amount owed on the mortgage.
In real estate, a short sale can occur when a homeowner sells a home at a price lower than the outstanding mortgage amount. Selling a home through the short sale process is never ideal; the only reason a homeowner would want to do so is to avoid foreclosure. For a short sale to take place, both the lender and the landlord must be willing to sell the home at a loss. Investors must be able to turn around and sell the house quickly, usually below the market, and a good purchase price makes this possible.
