A shortsale is when a borrower obtains the approval of a lender to sell the real property to a third party at a price below the actual amount owed.  Following the shortsale transaction, a lender may forgive or waive any potential deficiency.  A lender may give the borrower an incentive to proceed with the shortsale process.  The shortsale process usually begins with the borrower providing a completed shortsale package to the lender.  The lender will need evidence that the real property has been listed with a real estate broker and may require an executed contract for purchase and sale.