• A short sale usually indicates that the homeowner is in financial distress, the real estate market is in decline, or both.
  • A short sale must be approved in advance by the mortgage lender.
  • The former owner may be required to pay the missing amount or the debt may be forgiven.
  • The financial consequences of a short sale may be less severe than foreclosure, for both the seller and the lender.
  • For a home buyer, a short sale can be a good opportunity if approached carefully.