What is considered a short sale when purchasing a home?

Question

What is considered a short sale when purchasing a home?

Answer 1

The sales price is less than the mortgage amount so the bank agrees to take a loss on the mortgage.  For the bank doing this is still better than having the place foreclosed on and then selling it themselves.

Answer 2

where it's being sold for less than the existing mortgages on it

requires bank approval

means the housing market there is/has declined, and seller has no equity in home

Answer 3

A short sale is really from the seller's perspective - it is when the seller sells the house for less than the mortgage balance with the approval of the mortgage holder.  After the sale, the mortgage holder writes off the difference between the sales price (less costs) and the mortgage balance.  As a buyer, it looks pretty much the same as any other home sale.