finance
short sale
A short sale is a sale of property in which the lender agrees to accept less than the full loan balance as payoff, because the property is worth less than what is owed. The lender must approve the sale and price. Depending on the agreement and state law, the lender may or may not waive the remaining deficiency. Short sales often take longer to close because of lender review.
- Exam tip
- A short sale is not a foreclosure; the owner sells with lender approval. Exams test that the lender must agree and that a deficiency may still be owed unless waived.
- Example
- An owner owes $280,000 but the home is worth $240,000. The lender approves a $240,000 sale and accepts the net proceeds as payoff.
Related terms & state variants
Sources
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Last verified: 2026-10-23