Kovats Real Estate School Practice Test 2026 - Free Real Estate Practice Questions and Study Guide

Question: 1 / 400

What does a "short sale" refer to?

A sale of a property that is above market value

A sale conducted in less than 30 days

A sale of a property in which the proceeds are less than the amount owed on the mortgage

A "short sale" specifically refers to a transaction where the proceeds from the sale of a property are insufficient to cover the total amount owed on the mortgage. This situation typically arises when the property owner is facing financial difficulties and cannot afford to pay off the mortgage debt. In a short sale, the lender must agree to accept less than the full amount owed in order for the sale to proceed, which often helps the property owner avoid foreclosure.

The process can benefit both parties: the seller may avoid the damaging effects of foreclosure on their credit score, while the lender can recoup some of the lost funds instead of engaging in a more costly and lengthy foreclosure process. This situation is distinct from other types of sales, where the sale price either exceeds what is owed, occurs within a specific time frame, or involves bidding wars among buyers.

Get further explanation with Examzify DeepDiveBeta

A sale involving multiple bidders

Next Question

Report this question

Download Kovats Real Estate School Practice Test PDF Study Guide
Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy