A Short Sale, in real estate, is a sale in which the balance owed on a property's loan is more than proceeds of the sale.

A short sale often occurs when a borrower cannot pay the mortgage loan on their property and the lender decides to sell the property at a loss. In a short sale, the mortgage lender agrees to discount a loan balance, the home owner sells the mortgaged property, and proceeds of the sale go to the bank.

A short sale is often the most economical solution to an underwater mortgage. Banks incur a smaller loss than would result from a foreclosure, and borrowers are able to partially control their debt and reduce damage to their credit history. Short sales tend to be faster and less expensive than foreclosures.

Most financial institutions have pre-determined criteria for short sale transactions. A bank will determine the amount of equity, usually from an appraisal, and make an offer. Borrowers with legal representation, however, may be able to negotiate with lenders.

If you have an underwater mortgage and are looking to avoid the negative effects of a foreclosure, please contact the Maryland short sale lawyers of Chaifetz & Coyle, P.C., by calling 443 546-4608.