Real Estate Short Sale

AAA

DEFINITION of 'Real Estate Short Sale'

Any sale of real estate that generates proceeds that are less than the amount owed on the property. A real estate short sale occurs when the lender and borrower decide that selling the property and absorbing a moderate loss is preferable to having the borrower default on the loan. It is therefore an alternative to foreclosure.

INVESTOPEDIA EXPLAINS 'Real Estate Short Sale'

Real estate short sales can be done only by mutual consent of borrower and lender. Both parties can benefit greatly from this type of transaction. Borrowers can avoid having a foreclosure appear on their credit report, while lenders can avoid substantial fees associated with foreclosure.

RELATED TERMS
  1. Real Estate

    Land plus anything on it, including buildings and natural resources.
  2. Foreclosure - FCL

    A situation in which a homeowner is unable to make principal ...
  3. Short Sale

    A market transaction in which an investor sells borrowed securities ...
  4. Interest Rate

    The amount charged, expressed as a percentage of principal, by ...
  5. Short Refinance

    The refinancing of a mortgage by a lender for a borrower currently ...
  6. Mortgage Short Sale

    The sale of a property by a financially distressed borrower for ...
RELATED FAQS
  1. No results found.
Related Articles
  1. Home & Auto

    Purchasing A Short-Sale Property

    If you are looking for a good deal and have time to wait, a short-sale house may be for you.
  2. Options & Futures

    Short Sell Your Home To Avoid Foreclosure

    Are you in danger of losing your home? Protect your credit score with a real estate short sale.
  3. Home & Auto

    An Introduction To Real Estate Futures

    These futures are intended for institutional use, but retail investors looking to speculate on prices can benefit as well.
  4. Home & Auto

    Mortgage Options For Underwater Homeowners

    Find out what options are available when your mortgage is greater than the value of your home.
  5. Home & Auto

    Your Mortgage: When It's Time to Walk Away

    Mathematically speaking, walking away can sometimes be the most prudent choice. Find out how to run the numbers.
  6. Active Trading Fundamentals

    Short Sales And Foreclosures: When It's Time To Move On

    Sometimes it's better to cut your losses, but foreclosures and short selling can have devastating impacts on your credit score.
  7. Options & Futures

    Give Yourself More Options With Real Estate Options

    Real estate options have many benefits, including a smaller initial capital requirement.
  8. Taxes

    Getting U.S. Tax Deductions On Foreign Real Estate

    If your home or second home is not in the United States, you can still get U.S. tax deductions. How many and what kind depends on whether you also rent it.
  9. Mutual Funds & ETFs

    Will the Natural Gas ETF KOLD Stay Hot?

    Proshares UltraShort Bloomberg Natural Gas ETF isn't an investment for the faint of heart.
  10. Credit & Loans

    How To Become a Mortgage-Backed Securities Analyst

    Specializing in structured or derivative credit products like mortgage-backed securities requires education and prior experience in the mortgage field.

You May Also Like

Hot Definitions
  1. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  2. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  3. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
  4. Law Of Supply

    A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity ...
  5. Investment Grade

    A rating that indicates that a municipal or corporate bond has a relatively low risk of default. Bond rating firms, such ...
  6. Fringe Benefits

    A collection of various benefits provided by an employer, which are exempt from taxation as long as certain conditions are ...
Trading Center