In order to hand over ownership of a property to you, your seller must first clear all debts secured to the property. A short sale is what happens when a seller accepts an offer that isn’t high enough cover all selling costs and pay off the seller’s debts. Assuming they have the money, the seller could write a check for the shortage at closing. But what if they don’t? Then you’re involved in a short sale.

A short sale is a transaction where the seller will not clear enough to pay off the mortgages and other debts secured to the property. The seller can only sell by convincing their lender to accept a short payoff and releasing all liens even though the debts are not fully paid.