Short sale, pre foreclosure, and short payoff are all terms that refer to the selling of real estate at a price lower than what is owed, in exchange for avoiding foreclosure. The widely used term to describe this process is short sale. Essentially, a short sale or pre foreclosure is a sale made to provide the lender with payment of a lesser amount, rather than foreclosing. In the United States, the growing number of short sales has resulted from declining home prices, which are continually decreasing with the declining economy. As home value drops, homeowners may be forced to sell themselves "short," so to speak, in an effort to make resolution before issues worsen. Using a short sale will lessen the impact on your credit score compared to what it would be if foreclosure had taken place. However, no profit will be made on the short sale. Sometimes, this can still be an advantageous alternative to foreclosure, but it is also important that homeowners do not rush into a short sale unadvised.