A short sale is a home that is available at a purchase price that is less than the amount owed by its current owner. The transaction benefits the bank by allowing it to avoid repossessing the home in foreclosure, which is expensive and time-consuming. The seller avoids the credit hit that comes with foreclosure and the bankruptcy that sometimes accompanies it. A short sale happens when a homeowner owes more on the mortgage balance than the market value or sale price of the property at the point the owner wants to sell. For a short sale, the homeowner is essentially asking the mortgage lender (typically a bank) to accept a lesser amount than the total mortgage owed. For example, if the homeowner sells the house for $350,000, but the remaining mortgage loan balance is $400,000, the seller is essentially $50,000 “short” on paying the lender back. That’s a short sale.