GLOSSARY — REAL ESTATE TERMS
Short Sale
A short sale occurs when a homeowner sells their property for less than the amount owed on their mortgage, requiring the lender's approval since the lender is accepting less than full repayment of the loan.
Why lender approval is required
Because a short sale means the lender receives less than the full loan balance owed, the lender (not just the seller) must approve the sale price and terms. This approval process is what typically makes short sales take significantly longer than a standard transaction.
What buyers should expect
Short sales are commonly sold as-is, since the seller is already in financial distress and unlikely to fund repairs, and buyers should expect extended timelines -- sometimes several months -- while the lender reviews and approves the transaction, even after the seller has accepted the buyer's offer.
WHAT TO DO WHEN CONSIDERING A SHORT SALE
- Ask your agent how far along the lender approval process already is
- Set expectations for a significantly longer timeline than a standard purchase
- Still complete a full inspection despite the as-is nature of most short sales
- Confirm whether multiple lien holders need to approve, which can add further delay
How much longer does a short sale take compared to a normal sale?
Significantly longer -- lender approval alone can take weeks to several months beyond the seller's initial acceptance, on top of a standard escrow timeline.
Can a short sale fall through even after my offer is accepted?
Yes -- the seller's acceptance isn't final until the lender also approves the sale terms, and lenders sometimes reject or counter the negotiated terms.
Should I still get an inspection on a short sale?
Yes -- as-is doesn't mean skip due diligence. An inspection still tells you what you're taking on, even if the seller won't negotiate repairs.