Financial Planning Advices » Financial Terminology » What is Short Sale?
What is Short Sale?
When you sell an asset at a price that is lower than the balance of the loan you have, you are making a short sale. The lender from whom you have borrowed the money should also agree on the short selling. This is needed since there are some legal and tax consequences from the transaction.
To illustrate short selling, you possess a house that can be sold for $200,000. However, the balance on your mortgage is $210,000. This is a case in which short-selling can be considered.
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