A short sale occurs when the bank or lender who holds your mortgage is willing to sell the property for less than what is owed.
It is a transaction between a buyer and a lender (the bank). When someone falls behind on their mortgage payments, and the property’s value is lower than the amount owed on the loan. A short sale is an option to stop foreclosure. The short sale process is the same as a traditional home sale. However, the price of the home has to be negotiated with the lender who must approve the sale price of the house when an offer is submitted.
A short sale is an option to help you to avoid foreclosure and begin rebuilding credit much more quickly.