Short Sale


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Short sale

Selling a security that the seller does not own but is committed to repurchasing eventually. It is used to capitalize on an expected decline in the security's price.

Short Sale

The sale of borrowed securities. In a short sale, one borrows securities, usually from a brokerage, and sells them. One then buys the same securities in order to repay the brokerage. Selling short is practiced if one believes that the price of a security will soon fall. That is, one expects to sell the borrowed securities at a higher price than the price at which one will buy in order to return the securities. Selling short is one of the most common practices of hedge funds. This is also called establishing a bear position. See also: Margin account.

short sale

The sale of a security that must be borrowed to make delivery. Short sales usually, but not always, entail the sale of securities that are not owned by the seller in anticipation of profiting from a decline in the price of the securities. A short sale is not permitted when the last preceding different price was higher than the current price. Also called selling short, short. See also fictitious credit, ghost stock, lending at a premium, lending at a rate, odd-lot short sales, Rule 10a-1, short against the box, short cover, synthetic short sale.

short sale

In real estate,the lender's agreement to release its lien upon property so that the property can be sold, even though the sale price will not generate enough money to pay off the loan. Investors who specialize in purchasing preforeclosure properties will often negotiate a short sale price with the lender as part of their strategy.Oftentimes,the lender will agree to forgive the balance of the mortgage debt.

Short Sale

An agreement between a mortgage borrower in distress and the lender that allows the borrower to sell the house and remit the proceeds to the lender.

Ashort sale is an alternative to foreclosure or a deed in lieu of foreclosure. See Payment Problems/Position of the Lender/Permanent Problem.

Short Sale

A sale in which the seller borrows the stock certificates or other property delivered to the buyer. At a later date, the seller either purchases similar stock or property necessary to "cover" the sale, and delivers it to the lender or delivers to the lender stock or property that he or she already held but did not wish to transfer at an earlier date. For income tax purposes, there is no gain or loss on the transaction until the short sale is covered by purchase and transfer. Special rules apply in determining whether the gain or loss on a short sale is a long-term or short-term capital gain or loss.
References in periodicals archive ?
You need to make sure you know all the logistics behind the motivation of the short sale -- such as talking with both the homeowner and the agent to analyze where you'll benefit.
If they are currently involved in assisting sellers in obtaining discharges from mortgage lenders or creditors in short sales and are not licensed under RSA 397-A or 399-D, it is recommended that they consult with counsel and consider whether under the facts and circumstances it is advisable to ask for a no-action letter from the banking department.
The report noted that the percentage of suspicious short sales flipped for more than $50,000 has slightly decreased during the period of 2012 to second-quarter 2013.
The property was recently sold in a short sale and rehabilitated by the two.
The GSE said that additional changes will also make it easier for servicers to process short sales for members of the armed forces receiving Permanent Change of Station orders.
Just because a homeowner has filed for bankruptcy does not mean he or she cannot do a short sale. Bankruptcy can cure a homeowner's debt and liabilities, but it will not save one's credit.
"With the courts at a standstill and banks not foreclosing on properties," Halloran said, "the banks are getting better at doing short sales, so more people are doing them."
"Short sales are always a better alternative than foreclosures for the bank and for the seller," Paddilla says, citing one rare exception she oversaw firsthand.
Of primary interest to real estate agents, lenders, asset managers, and to a lesser extent, appraisers involved with short sale properties, Short Sale Rush provides a practical guide to sales techniques, checklists, forms, and procedures designed to improve the marketability of short sale and REO properties.
In September 2008, ASIC took emergency action to temporarily ban short selling in Australia, including naked short sales and covered short sales.
A short sale is a voluntary process on the part of the lenders and is something the property owner must negotiate.
Sellers also have incentive to accept a short sale, since they walk away from the house without a foreclosure tarnishing their credit even further.