A short sale is simply getting a lender to take less than what is owed on the loan.

The term “short sale” comes from the fact that the seller will be selling you their property for a price which leaves them “short” of the money to pay off their loan. For example, if a seller owes the lender $50,000 on their property, and the seller sells the property to you for $40,000, the seller is going to be roughly $10,000 short of money to pay off the lender. Thus the term “short sale”.