A pre short sale, or pre foreclosure, is an action that is taken during the process of a foreclosure, normally as a last resort before the issue reaches a "point of no return."In a foreclosure, the purpose is to fulfill a debt that is owed on a mortgage, which at the time, have been revealed as unpayable. When the homeowner shows they cannot pay their mortgage, the lender can order that a notice of default be issued. At this point, the foreclosure can officially begin, meaning that the owner will have to give up the home to pay their debts. A short sale, on the other hand, lessens the impact of the foreclosure in a way that is beneficial to both parties. The short sale consists of a sale of the home at a lower price than that which is owed. If the lender agrees to settle for a lower price, the home will be sold and the owner will be relieved of any remaining debts. Although a foreclosure would be worse, a short sale is also quite negative, having a very negative effect on the homeowner's credit report as well.