What is a "short sale" in real estate?

A short sale in real estate occurs when a property is sold for less than the outstanding mortgage balance, requiring approval from the lender. This typically happens when the property owner is facing financial difficulties and is unable to continue making mortgage payments. The lender agrees to this sale as it may be more beneficial than going through a foreclosure process, which can be time-consuming and costly for all parties involved.

In this scenario, the lender assesses the situation, including the property value and the owner’s financial circumstances, to decide whether to allow the sale to proceed. This process often involves negotiations and can take some time, making it distinct from other forms of sales.

Other options describe scenarios that do not accurately capture the nature of a short sale. A regular sale where the seller benefits financially suggests that the seller is profiting from the sale, which is not typically the case for a short sale since the proceeds are insufficient to cover the mortgage debt. A transaction involving properties over a short time frame does not relate to the intrinsic financial details of a short sale. Lastly, a quick sale without the need for property evaluation ignores the requirement that lenders must analyze the property and its value before approving a short sale. Therefore, the correct definition aligns with the specifics of the short sale process