Short selling or selling short is an investor's technique. Those in the stock market benefit via such transactions with every fall in stock price and urgent sale of the instruments. The share market thrives on such short term sales and purchases of company and government stock. A short sale is risky and needs to be considered with caution. In real estate, most short sales involve real estate deals that come out of the endeavor to sell property for the sake of repaying a loan. Most real estate short sales arise out of economic hardship, to facilitate loss mitigation. The short sale enables the homeowner or debtor to sell the property mortgaged with the bank at a price lesser than the market price and hand over the proceeds to the lender. This helps the individual out of debt.
In finance, a short sale involves the intent repurchase of the instrument or stock at a later stage. The transaction begins with the purchase of a financial instrument at a price lower than that of the market. The idea behind such a deal is to attempt a profit out of an estimated further decline in market price. This kind of 'going short' works for collection of securities that may or may not drop in price any lower and are exposed to the risk of a loss.
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