What Is a Short Sale?

By Kristi Waterworth – Updated Nov 7, 2025 at 12:06 PM

Key Points

Stock short selling involves borrowing, selling, and repurchasing stocks for profit.
Real estate short sales allow borrowers to sell homes for less than loan value.
A real estate short sale is viewed more favorably than a foreclosure.

Chances are good that no matter what type of investor you are, you've heard the term "short sale." For some, it represents an opportunity to move forward with their lives despite a high mortgage, and for others, an opportunity to make some extra money on their investments.

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About the Author

Kristi Waterworth has been a contributing real estate and financial expert at The Motley Fool, covering real estate, investing, and personal finance topics, since 2020. Kristi has been interviewed by various TV media outlets and podcasts for her real estate investing expertise – from residential real estate to digital real estate and everything in between. Kristi’s journalist career spans over 25 years, and she has written about real estate investing, homeownership, and home construction specifically for the last decade. She was also previously a licensed Realtor and general building contractor before the Great Recession and housing market collapse. She holds a bachelor’s degree in American history from Columbia College in Missouri.

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