A short sale is a property which is sold for less than what is owed. The word "short" has nothing to do with the process which is usually very, very long. Although rules and regs vary from state to state, a for a home owner or investor, a short sale is a more desirable outcome rather than going to foreclosure. Typically, the homeowner who successfully negotiates and closes a short sale will find credit scores, credit history, and future loan eligibility are impacted to a far lesser degree than if the home went to foreclosure. For the buyer, it is highly recommended that you consult with a Realtor and a real estate attorney who have experience with short sales.

Hello Amy,
In real estate, a short sale is a property sale that is negotiated with the mortgage company where the lender receives less than what is owed. In Colorado, for example, a lender files a NED "Notice of Election and Demand" to the delinquent homeowner - giving notice that in a specific amount of time, the property will be foreclosed unless the delinquent amount plus interest is "cured" (payed). During the cure period, the owner may choose to sell the property to avoid the foreclosure and in many cases, the market value for the property is below the cost to pay off the mortgage plus fees. This is when offers are negotiated with the lender to accept a "short sale". It is highly recommended to seek legal counsel and the advice of a trusted real estate professional.

Hope this helps.

Lori Jarrett, Broker/Owner
Take Me Home Real Estate, LLC
http://www.takemehomerealestate.com/real_estate_blog.html