Under Texas law, what is a key feature of a short sale?

In the context of a short sale under Texas law, a key feature is that the lender accepts less than the loan balance. This typically occurs when a homeowner is in financial distress and owes more on their mortgage than the current market value of the home. By agreeing to a short sale, the lender allows the property to be sold for less than what is owed on the mortgage, helping the seller avoid foreclosure. This arrangement can benefit both the homeowner and the lender, as it allows the homeowner to sell the property and relocate, while the lender can recover a portion of the loan amount rather than facing the prolonged and costly process of foreclosure.

Other choices do not accurately reflect the realities of a short sale: properties are not consistently sold above market value, nor is it a requirement for a buyer to be involved with a financial institution specifically. Additionally, the seller is not obligated to make improvements to the home for a short sale to occur. These factors clarify that the essence of a short sale revolves around the lender's acceptance of a sale price that is less than the outstanding mortgage balance.