A short sale is a transaction in which the lender, or lenders agree to accept less than the mortgage amount owed by the current homeowner. With most first mortgages, the shortfall difference is forgiven by the lender. When there is more than one mortgage the homeowner often makes arrangements with the second lender to settle the remainder of the debt. Short sales allow the seller to avoid foreclosure and avoid the potential for a deficiency judgment. For buyers a short sale is a good deal and allows the buyer to pick up a property typically for 10% to 15% under the fair market value. For lenders, short sales allow them to avoid the costly and lengthy process of foreclosure. At the end of the day a short sale can be a win-win situation for all parties involved in the transaction