Skip to content
Pass Georgia
Real estate glossaryNational exam concept

Short sale

A short sale is a sale in which the anticipated net proceeds are insufficient to pay the mortgage debt and related claims in full, so the secured creditor's approval is needed for a release on agreed terms.

Exam area: Transfer of Title

Download PDF

What does “short sale” mean in real estate?

A short sale is a sale in which the anticipated net proceeds are insufficient to pay the mortgage debt and related claims in full, so the secured creditor's approval is needed for a release on agreed terms.

How is “short sale” different from the closest wrong answer?

A short sale is an owner sale requiring lender approval. Foreclosure is creditor enforcement after default.

What is the Georgia-specific rule?

A Georgia lender's approval of the sale price does not by itself prove the remaining debt is forgiven. The written approval controls release, deficiency, deadlines, and closing conditions.

Worked exam example

Scenario

The loan payoff is $310,000, but the best supported offer produces only $280,000 before other costs, so the lender evaluates a reduced payoff.

What is the most common exam trap?

Trap correction

Seller acceptance does not create lender approval, and lender approval does not automatically release every borrower obligation.

Original exam check

Apply the definition

A seller owes $310,000, and the best offer nets $280,000 after costs. The seller accepts, and the lender sends a letter approving the reduced payoff that says nothing about the remaining balance. What is true?

Mastery tracker

Do not mark this term complete until you can retrieve it.

0%

Progress is stored only in this browser.

Related terms to learn next

Recommended next complete lesson

Continue with Transfer of Title complete lesson. It places this term inside the full rule, worked examples, exam traps, and mixed practice required for mastery.