Until recently, many people had never heard of a short sale.  Investors had used pre-foreclosures (homes that are in distress and will likely go into foreclosure) as a means of buying real estate for sale in Old Town, Del Ray, Kingstowne, and other parts of Alexandria before they were auctioned off on the courthouse steps.  For the general public, a short sale, especially when it comes to Alexandria Virginia real estate, was rare and even a bank owned foreclosure or REO property for sale was hard to find outside of trustees sales.  Because Alexandria real estate had a long history of steady appreciation, it was common for a homeowner in distress to simply sell their home, expect a short time on the market, and often sell for a profit.  As a reflection of the current economy, things are now different.

A homeowner is 'short' when:
 

When a borrower owes an amount on his property that when combined with closing costs and commission is higher than current market value.

A short sale occurs when:

A negotiation is entered into with the homeowner's mortgage company or companies to accept less than the full balance of the loan at closing.  A buyer closes on the perty and the property is 'sold short'.

What a Short Sale Is Not

A short sale is a way to avoid foreclosure.  It is not a 'get out of my mortgage free card'.  This means that the seller has to have a valid financial hardship for why they can't pay their mortgage.