Short Sale - A short sale occurs when real estate is sold for an amount less than what is owed on the property's loan.  The financial entity holding the loan accepts less so it is referred to as "short" of the amount due.  A short sale requires agreement of both the seller (the person who originally purchased the real estate) and the financial instution holding the note of the short amount.  While these types of sales are currently VERY popular, they are usually anything but short in terms the time required to reach agreement of all parties.

Since there is no standard procedure for a financial institution to settle a short sale, it is often difficult to to determine if the sale will be successful.  While some have completed the transaction is a relatively short period of time, other have dragged on for months, while others have ended in foreclosure even after an extended period of negotiation.