Short sales are sometimes an option when the amount owed is greater than the value of the Real Estate.
For Example:
The mortgage on the house is $300,000 however due to value decreases in the area values have dropped, The property may also have deferred maintenance, and may need repairs and is now worth only $225,000, This would be $75,000 less then owed on the property. In some cases when the amount owed is greater than the value the lender in order to prevent a future foreclosure will negotiate to permit the sale of the property for an amount less than is owed on it. This typically does require the lender to be able to appraise the property and one or more approvals in order to be qualify for a short sale. There is no guarantee that just because the amount owed is greater than the value that the lender will permit a short sale. If they do this process can take an extended time in some cases.