Q: what is a short sale
A: A ‘short sale’ is when you sell your house (or are trying to) & the market price & offer you get (if you are lucky enough to get one) are less than the mortgage amount you owe. Then, you, as the owner of the property, arrange with the bank (if they are willing) to accept an amount less than the balance – so you can close with the buyer. That difference (what you owe & what the bank accepts) between the balances, is considered ‘short’ – hence – a ‘short sale’. Keep in mind, you could be liable for the difference.
OK, now it’s ‘soapbox time’ ! – I recommend that if you are in this situation & the bank who you owe the money to states that they will facilitate a ‘short sale’ only if you sign a ‘note’ – DON’T !!! Do not agree to sign that note. That will only keep the ‘anchor’ of the short amount on your financial situation – BAD IDEA for consumers.