what is a short sale in real estate

A short sale in real estate occurs when a homeowner sells their property for less than the amount they owe on the mortgage, and the lender agrees to accept the proceeds as full payment for the loan. This usually happens when the homeowner is in financial distress and needs to sell the property to avoid foreclosure. The lender may forgive the remaining balance or pursue a deficiency judgment to recover the difference. Short sales can benefit both the seller, by avoiding foreclosure and reducing fees, and the buyer, by providing an opportunity to purchase a property at a discounted price