Affiliate Broker Tennessee (TN PSI) National Practice Exam 2025 – Comprehensive All-in-One Guide to Exam Success

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What is a "short sale" in real estate?

A sale where the property is sold at a loss and lenders agree to accept less than what is owed.

A "short sale" in real estate refers specifically to a situation where a property is sold for less than the amount owed on the mortgage, and the lender agrees to accept this lower amount as full satisfaction of the debt. This typically occurs when the homeowner is facing financial difficulties and cannot afford to keep the property or make the mortgage payments.

In a short sale, the seller must obtain the lender's approval to proceed, and the lender may require that the sale price reflects the current market value rather than the remaining mortgage balance. The fundamental aspect of a short sale is the lender's acceptance of a lower payout, which helps avoid foreclosure. This is significantly distinct from the other choices, which do not encapsulate the essential characteristics of a short sale in real estate transactions.

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A type of sale that includes a discount for quick completion.

A sale where the buyer negotiates the price after the inspection.

A sale completed in less time than average due to urgency.

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