I just received a call from a buyer who was looking at one of my lisitngs. The house is pending, but it is a short sale and many aren't certain what that means. This period of time could be known as pre-foreclosure; the seller can't pay the loan balance in full upon selling it, and the monthly expenses exceed income (due to job loss, medical expenses, or other hardship). To save some damage to ones credit, to prevent the home going to foreclosure ( and becoming inventory for a bank, and a possible unkept property for a neighborhood) a seller will list the home for sale with a realtor, and accept an offer from a buyer that is "subject to lender approval." The offer is submitted to the bank and the lender may or may not accept the offer. If they do accept the offer or successfully negotiate a counter offer with the buyer, the closing proceeds with the lending institution accepting the costs and purchase price as payment in full. There may or may not be obligation from the seller to pay the difference that remains on the loan, or a negotiated (reduced) amount. In a nutshell the bank is selling short of what's owed, the seller is out from under the loan and the foreclosure process, and the buyer, if he/she is patient, can get a good property at a slight discount.