mortgage short sale, definition of a short saleIf you are new to the housing market, you've probably heard the term, short sale, and been wondering what the definition of a short sale is. It's a sale of a home that's been arranged between the home owner and the lender. When families bought homes at the top of the market, they sadly watched prices tumble as the market got soft. These owners bought high, and are being forced to sell low. It's a bad situation for home owners and lenders, but not the worst for either one. The worst situation is a foreclosure, but a mortgage short sale saves the home owner from the serious credit damage a foreclosure does, and saves the bank the time and expense of foreclosure proceedings. A mortgage short sale allows a new buyer to acquire the home for its market value or slightly below appraised value, so the bank doesn't have to hold the property in its inventory for month after month, and the home is likely to be in better condition than if the current owners walked simply walked away.