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Real estate values have plummeted in recent years. There are record numbers of foreclosures and short sales in San Diego. A short sale is when the lender forgives a portion of or lowers the loan amount in order for the property to be sold at market value. In a descending real estate market, values decrease to less than the morgage balance owed on the property. Simply stated, lenders make the financial decision to dispose of the property in a regular real estate transaction instead of foreclosing on the property. Lenders have learned through experiences of a down market that the eventual outcome is they will lose more money if they foreclose on the property. This short sale vehicle is also beneficial to owners because it helps preserve their credit. They avoid a foreclosure on their record; therefore their credit scores are better preserved. The short sale transaction can have negative credit and tax implications, but generally, when the seller has excellent representation by a seasoned real estate broker, the positives far outweigh the negatives. Recovery from the impact of a short sale on a credit report takes about half as much time as recovery from a foreclosure. When the short sale is managed and successfully completed, it is a win-win situation for the owner as well as for the lender.