Imagine your home is worth $200,000 but, you owe $220,000 on it. If you were to sell it in the open market, you might net $184,000, or $36,000 less than what you need to pay off the loan. A short sale is where your lender will forgive a portion or all of the short amount and cover the closing costs of the sale including real estate commissions, attorney fees and other seller’s expenses.