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Short Sale for Dummies

noun

pronunciation: ʃɔrt_seɪl

What does Short Sale really mean?

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Hey there! Don't worry, I'm here to explain what "Short Sale" means. So, imagine you have a favorite toy that you want to sell, but you're in a hurry and you really need the money ASAP. Well, a short sale is kind of like that!

In the world of finance, a short sale happens when someone like an investor or a trader borrows something they don't actually own, like a stock or a house, with the intention of selling it right away. They hope that by selling it quickly, they can make some money before the price of that thing goes down.

Let me make it clearer with an example. Imagine you think the price of a particular toy is going to drop soon. You go to your friend and say, "Hey, can I borrow that toy of yours for a little while? I promise I'll give it back!" Your friend trusts you, so they lend you the toy. Immediately, you go out and sell the toy to someone else at the current higher price.

Now, here's where the short part comes in. Eventually, you'll need to buy another toy to give back to your friend, because it's their toy after all. But you're hoping that when that time comes, the price of the toy will have dropped, so you can buy it back for less money than you sold it for. The difference between the price you sold it for and the price you bought it back at is your profit!

So, in summary, a short sale is when someone borrows something they don't own, sells it quickly, and hopes to buy it back for less money later. It's like borrowing a friend's toy, selling it, and then hoping to find a cheaper one to replace it with. Pretty cool, huh?

I hope that explanation helped you understand what a short sale is. Let me know if you have any other questions!

Revised and Fact checked by Nicole Thomas on 2023-10-30 03:02:04

Short Sale In a sentece

Learn how to use Short Sale inside a sentece

  • A short sale is when someone sells a house for less money than they still owe on their mortgage.
  • If a person can't afford to pay for their car anymore, they might do a short sale to sell it for less than they owe.
  • Imagine you borrowed money from a friend, but you can't give it all back. So, you sell your bike to someone for a lower price. That's a short sale!
  • Sometimes, stores have too many clothes and they need to sell them quickly. They might do a short sale where the clothes are sold for a lower price.
  • If a farmer has too many apples and he needs to sell them quickly before they go bad, he might do a short sale and sell them for less money.

Short Sale Synonyms

Words that can be interchanged for the original word in the same context.

Short Sale Hypernyms

Words that are more generic than the original word.