Definition: When related to loans, a short sale is the sale of an asset for less than the loan balance. If you owe $250,000 on your mortgage but your home will only sell for $225,000, you may consider a short sale. A short sale as tax and legal consequences that you should be aware of, and your lender has to agree to the transaction.
Examples: I'm unable to pay my mortgage, but my bank agreed to allow a short sale.
