A short sale is a process where a homeowner sells their property for less than what is owed on the mortgage. The proceeds from the sale are used to pay off as much of the mortgage balance as possible. In a short sale, the lender must approve the sale and agree to accept less than the full amount owed on the mortgage.
The main difference between a short sale and foreclosure is that in a short sale, the homeowner is selling the property and attempting to avoid foreclosure, while in foreclosure, the lender is taking possession of the property and selling it to recover their losses. A short sale can be a viable alternative to foreclosure, as it can help the homeowner avoid the negative impact on their credit that a foreclosure can bring. However, it is important to note that a short sale can still have an impact on your credit score and may result in the lender pursuing the deficiency balance.