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Short Sale. Used to describe a situation where the current fair market value of the property is less than what is owed to the lender (debt). Seller can't sell the property unless the creditors (third parties) accept a payment that is less than ("short of") the amounts owed to them.
A short sale occurs when you sell stock you do not own. Investors who sell short believe the price of the stock will fall. If the price drops, you can buy the stock at the lower price and make a profit. If the price of the stock rises and you buy it back later at the higher price, you will incur a loss.
A short sale occurs when your lender(s) agrees to the sale of your home for an amount less than the outstanding mortgage balance (the sale is \u201cshort\u201d of the mortgage payoff). Your lender's approval is required because it has a lien on your property that must be released to allow for the transfer to the buyer.
Definition: The cash received from the short sale of a security. The interest return from investment of the short proceeds is usually divided between the short seller, who gets partial \u201cuse of proceeds,\u201d and the securities lender.