Real Estate Short Sale means that owners who can no longer afford to keep mortgage payments current, agree with the lender to sell the property. It is a sale of real estate in which the sale proceeds fall short of the balance owed on the property's loan. The real estate is sold at a loss in this case but this allows one to avoid bankruptcy or foreclosure, which involves high fees for the bank and poorer credit report outcomes for the borrower.
This agreement does not necessarily release the borrower from the obligation to pay the remaining balance of the loan.
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