Last reviewed 08-20-2026Short-Sale.com Editorialglossary

Short Sale

What it means

A short sale is when you sell your home for less than what you owe on your mortgage. This can help you avoid foreclosure, but you will need to move out of your home.

Why it matters

A short sale lets you sell your home for less than what you owe on your mortgage. This can help you avoid foreclosure and manage your debt.

Official sources

CFPB

Updated 08-20-2026

Short Sale

an alternative to foreclosure, but because it is a sale, you will have to leave your home. If your lender or servicer agrees to a short sale, you may be able to sell your home to pay off your mortgage, even if the sale price or proceeds turn out to be less than the balance remaining on your mortgage. A short sale is a type of loss mitigation. If you live in a state in which you are responsible for any deficiency, which is the difference between the value of your property and deficiency. If the lender waives the deficiency, get the waiver in writing and keep it for your records.

CFPB Mortgage Terms

CFPB · pp. 25–28

How it shows up

When you see it

A short sale may happen if you have trouble paying your mortgage. Your lender might suggest it instead of foreclosure. Talk to your lender about this option.

How it differs

A common misconception is that a short sale is the same as foreclosure. In reality, a short sale involves selling the home, while foreclosure means the lender takes ownership of the property.

Example

For instance, if you owe $300,000 on your mortgage but sell your home for $250,000, that's a short sale.

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