A short-sale is a transaction that allows for the sale of a property for an amount that is less than the amount owed to the lender. The bank in return may accept the proceeds as full settlement of the debt. A lender prefers a short-sale over a foreclosure because it is faster, costs less and they don't want to own a home they can't sell. A short-sale is better for a homeowner because it negotiates a solution with the lender on favorable terms, protects your credit, helps to minimize debt obligations and allows for a fresh start.