What is a Short Sale

A short sale is when the seller's bank is owed more money (the note) than what the current market will bear (fair market value). The bank may agree to what is called a short sale, thereby accepting less than what is owed to them. Keep in mind that the seller is sometimes responsible for the difference between what is owed and what the property ultimately sells for. This difference is handled through a 1099 given to the sellers at closing for tax purposes.