The Real Deal New York

From the May issue: Before the subprime debacle hit last summer, the term “short sale” was not in New York City’s real estate vocabulary. Now, while short sales are far more prevalent outside New York, some brokers in Upper Manhattan and in the outer boroughs are not only aware of the term, but can probably provide an extensive definition. A short sale occurs when a homeowner, in order to prevent foreclosure, is allowed by his lender to sell the home for less than the balance owed on the mortgage loan. The homeowner is considered “underwater” or “upside down” on his mortgage, which means the loan balance is higher than what the home is worth.