If you're in the process of buying or selling a home, you may have come across the term "short sale." But what exactly is a short sale? In the world of real estate, a short sale refers to a type of transaction where the proceeds from the sale of a property fall short of the outstanding mortgage balance, and the seller is unable to cover the difference. In simpler terms, it's a sale of a property where the seller owes more on their mortgage than the sale price of the home.