In real estate what does the term short sale mean?

Answer 1

A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property's loan. It often occurs when a borrower cannot pay the mortgage loan on their property, but the lender decides that selling the property at a moderate loss is better than pressing the borrower. Both parties consent to the short sale process, because it allows them to avoid foreclosure, which involves hefty fees for the bank and poorer credit report outcomes for the borrowers.

Answer 2

It's used in different contexts. In stock it mean you enter a transaction where you make money if the subject stock goes down in price, not up. In many other things it means the amount you sell the item for is less than the loans secured by (or sometimes just the cost) of the item...hence after the sale the seller may still have an obligation to pay someone more than they received.

Answer 3

In real estate a short sale is a situation where a home owner is selling a home for less money than what is still owed on the mortgage. Often such sales need approval from the bank before than can be completed. In times of falling real estate markets this situation becomes more common and is very unfourtunate for the home owner.